Pacific Rubiales reports solid financial quarter and resumption of growth in the company's major oil fields
Thursday, Nov 08, 2012
TORONTO, Nov. 7, 2012 /CNW/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) announced today the release of its unaudited consolidated financial results for the quarter ended September 30, 2012, together with its Management Discussion and Analysis ("MD&A") for the corresponding period. These documents will be available on the Company's website at www.pacificrubiales.com, on SEDAR at www.sedar.com, on the SIMEV website at www.superfinanciera.gov.co/
The Company has scheduled a teleconference call for investors and analysts on Thursday November 8 2012 at 8:00 a.m. (Toronto and Bogotá time) 11:00 a.m. (Rio de Janeiro time), to discuss the Company's third quarter results. Analysts and interested investors are invited to participate using the dial-in instructions available at the end of this news release.
"The Company's third quarter results were solid from both a financial and
operational viewpoint, contributing to strong gains year-to-date that put us on track for a record year measured across all our financial and operational metrics.
This was the quarter where production growth resumed in our two major oil fields (Rubiales and Quifa fields) after production in the first half was constrained by delays in the environmental permit approval process for increased water injection. Growth in our average net production in the fourth quarter is accelerating and is within striking distance of our year-end exit targets.
Since receiving the environmental license approval, the Company has been able to increase its total gross field production from approximately 243 Mboe/d to 270 Mboe/d (net after royalty 97 Mboe/d to 109 Mboe/d). Current gross total field production is approximately 188 Mbbl/d at Rubiales, 49 Mbbl/d at Quifa SW and 3 Mbbl/d at the new commercial development in Quifa North (Cajúa field). These gains are driven by the receipt of the environmental permit for an incremental 400 Mbbl/d water injection at Rubiales and the commerciality approval for the Cajúa field, received August 8 and 15, 2012 respectively.
Sales volumes in the third quarter were down from the record set in the prior quarter, but up slightly from the first quarter 2012. Our sales volumes fluctuate depending on volumes of diluent, oil for trading and net inventory adjustments. In the third quarter compared to the previous quarter, our diluent volumes remained flat due to more purchases of natural gasoline rather than light oil product. We had no oil for trading volumes in the quarter, and we had a net inventory build rather than the large draw we saw in the prior quarter. These swings are a natural characteristic of our business, but what is more important was that our operating netbacks remained strong (with crude oil netbacks close to $65/bbl and natural gas over $34/boe), and the EBITDA ratio EBITDA/Revenue) increased to 56% in the quarter from 54% in the prior quarter despite a 2% drop in realized sales price. This illustrates the strength of the business and its cash generating capacity.
The Company has experienced delays related to the regulatory permitting process affecting its Colombia operations, but we are actively working with government agencies to expedite the process and have seen improvements which are encouraging. In the case of Pacific Rubiales it is important to recognize that this year's delay in the licensing only represents a delay in development, rather than a loss of production.
In addition, despite pipeline transportation disruptions affecting the O&G
Industry in Colombia, resulting in a drop in the country's total oil production during the third quarter, Pacific Rubiales was able to both grow and deliver all of its oil production without any disruptions. This illustrates the strategic importance and value of the proactive investments the Company has made in midstream infrastructure.
Due to the permit delays, we now expect to be +/- at the bottom end of the annual production guidance range that was reset at our second quarter release to include production volumes coming from the PetroMagdalena acquisition and from our 49% deemed participating share attributed from block Z-1 in Peru.
SOURCE Pacific Rubiales Energy Corp.
To access over 3,000 of the latest oil projects from across the world visit Projects OGP for free trial today