TORONTO,
April 23, 2014 /PRNewswire/ - Pacific
Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB)
today provided an operational update for its first quarter 2014
operating results, which includes estimates of production and sales
volumes, price realizations, and operating netbacks, summarized as
follows:
|
1Q
2014
(Estimated) |
4Q
2013
(Actual) |
3Q 2013
(Actual) |
2Q
2013
(Actual) |
1Q
2013
(Actual) |
|
|
|
|
|
|
Net Oil Production (Mbbl/d) |
137 - 138 |
123 |
117 |
117 |
117 |
Net Natural Gas Production (Mboe/d) |
10 - 11 |
11 |
11 |
11 |
11 |
Total Net Production (Mboe/d) |
147 - 149 |
134 |
128 |
128 |
128 |
|
|
|
|
|
|
Sales Volumes (Mboe/d) |
151 - 153 |
143.9 |
123.7 |
127.4 |
143.7 |
|
|
|
|
|
|
Oil Price Realization ($/bbl) |
$98 - $100 |
$95.54 |
$103.00 |
$95.84 |
$102.06 |
Natural Gas Price Realization ($/boe) |
$31 - $33 |
$32.69 |
$36.35 |
$39.78 |
$40.26 |
Combined price realization ($/boe) |
$92 - $94 |
$90.66 |
$97.29 |
$90.91 |
$97.14 |
|
|
|
|
|
|
Oil Operating Netback ($/bbl) |
$62 - $64 |
$62.31 |
$65.73 |
$63.31 |
$63.34 |
Combined Operating Netback ($/boe) |
$59 - $61 |
$59.43 |
$62.52 |
$60.54 |
$60.88 |
Note: All values in this release are in U.S.$
unless otherwise stated.
First Quarter 2014 Results
Total net production for the quarter is expected
to be in the range of 147 to 149 Mboe/d, an increase of
approximately 16% from the same period a year ago. Total production
was impacted by lower volumes produced in the Rubiales Field as a
result of two factors:
|
|
1) |
Restrictions in surface water disposal due to
the ongoing drought in Colombia; and |
2) |
Lower than expected capital expenditures on
water treatment facilities pending ongoing negotiations with
Ecopetrol S.A.
("Ecopetrol") related to the division of capital investment
in advance of the 2016 contract expiry. |
|
|
The lower production at the Rubiales Field was
offset by the contribution of volumes from the acquired
Petrominerales Ltd. assets which produced in line with production
reported in the fourth quarter 2013 (approximately 24 to 25 Mbbl/d
net). The Company expects its total production to increase
throughout the year and is on track to achieve its 2014 guidance of
average net production of approximately 148 to 162 Mboe/d, an
increase of between 15 to 25% over 2013 production levels.
The Company reports its sales volumes made up of
produced volumes, plus purchased diluent volumes (mixed with its
heavy oil production to form a sales blend), plus oil for trading
("OFT") volumes, plus/minus sales inventory adjustments.
Sales volumes can vary significantly from quarter to quarter as a
consequence of fluctuating diluent and OFT volumes, and significant
swings in oil inventories which are related to the timing of export
cargo liftings.
Sales volumes in the first quarter are expected
to be in the range of 151 to 153 Mboe/d and do not include
approximately 450 Mbbl (5 Mbbl/d) of oil from prior period
accumulated PAP volumes. As previously announced, these volumes
relate to the agreement the Company reached with Ecopetrol to begin
delivery 'in kind' of prior period PAP volumes associated with the
Quifa SW arbitration decision announced last year. As of the end of
the first quarter 2014, the Company has delivered in full all of
the outstanding PAP volumes to Ecopetrol.
The OFT volumes in the first quarter are
expected to be in the range of 10 to 11 Mbbl/d (3.4 Mbbl/d in the
fourth quarter 2013). The OFT business is opportunistic in nature
and therefore volumes can vary significantly from quarter to
quarter. Diluent volumes in the first quarter are expected to be
similar to the prior quarter (2.3 Mbbl/d in the fourth quarter
2013).
The Company expects oil price realization in the
first quarter to be in the range of $98 to
$100/bbl, approximately 3% higher than the prior quarter
reflecting the increase of WTI from $96.42/bbl in the fourth quarter 2013 to
$97.90/bbl in the first quarter 2014.
Most of the Company's oil production in Colombia and Peru is exported at prices linked to
international oil prices. Combined realized prices are expected to
be in the range of $92 and
$94/boe.
Due to factors outside of the Company's control,
total operating costs increased during the quarter driven by the
following:
|
|
1) |
Production costs - increased by approximately $1.50 to
$2.50/bbl reflecting lower oil volumes produced at the Rubiales
Field. |
2) |
Transportation costs - increased by approximately $2.00 to
$2.50/bbl as a result of the use of additional trucking and
alternate pipeline transportation costs following terrorist attacks
on the Bicentenario pipeline. |
3) |
Bicentenario pipeline tariffs paid during force majeure - the
terrorist attacks on the Bicentenario pipeline resulted in the loss
of approximately 47 Mbbl/d of the Company's pipeline transportation
capacity beginning in mid February. The tariffs paid during force
majeure are expected to cost an additional $2.00 to $2.50/bbl. |
|
|
The increase in operating costs was mitigated by
the 3% increase in realized prices and as a result the Company's
combined operating netbacks for the quarter remained in-line with
the prior quarter, with margins exceeding 60%. Additionally, the
Company did not experience any disruption in production despite the
pipeline attacks, highlighting the flexibility of its business
model and multiple alternative transportation options
available.
The Company calculates its operating netback for
both revenues and costs based on total sales volumes, rather than
produced volumes. Total operating costs are reported as a
combination of: production, transportation, and diluent costs, plus
other costs and overlift/underlift costs. The latter two (other
costs and overlift/underlift) largely relate to movements in
storage and cargo lifting inventory and can consequently
significantly impact total costs either positively or negatively,
in any given quarter.
Pacific Rubiales, a Canadian company and
producer of natural gas and crude oil, owns 100% of Meta Petroleum
Corp., which operates the Rubiales, Piriri and Quifa heavy oil
fields in the Llanos Basin, and 100% of Pacific Stratus Energy
Colombia Corp., which operates the La Creciente natural gas field
in the northwestern area of Colombia. Pacific Rubiales has also
acquired 100% of Petrominerales Ltd, which owns light and heavy oil
assets in Colombia and oil and gas
assets in Peru, 100% of
PetroMagdalena Energy Corp., which owns light oil assets in
Colombia, and 100% of C&C
Energia Ltd., which owns light oil assets in the Llanos
Basin. In addition, the Company has a diversified portfolio
of assets beyond Colombia, which
includes producing and exploration assets in Peru, Guatemala, Brazil, Guyana and Papua New
Guinea.
The Company's common shares trade on the
Toronto Stock Exchange and La Bolsa de Valores de Colombia and as Brazilian Depositary Receipts
on Brazil's Bolsa de Valores
Mercadorias e Futuros under the ticker symbols PRE, PREC, and PREB,
respectively.
Advisories
Cautionary Note Concerning Forward-Looking
Statements
This news release contains forward-looking
statements. All statements, other than statements of historical
fact, that address activities, events or developments that the
Company believes, expects or anticipates will or may occur in the
future (including, without limitation, statements regarding
estimates and/or assumptions in respect of production, revenue,
cash flow and costs, reserve and resource estimates, potential
resources and reserves and the Company's exploration and
development plans and objectives) are forward-looking statements.
These forward-looking statements reflect the current expectations
or beliefs of the Company based on information currently available
to the Company. Forward-looking statements are subject to a number
of risks and uncertainties that may cause the actual results of the
Company to differ materially from those discussed in the
forward-looking statements, and even if such actual results are
realized or substantially realized, there can be no assurance that
they will have the expected consequences to, or effects on, the
Company. Factors that could cause actual results or events to
differ materially from current expectations include, among other
things: uncertainty of estimates of capital and operating costs,
production estimates and estimated economic return; the possibility
that actual circumstances will differ from the estimates and
assumptions; failure to establish estimated resources or reserves;
fluctuations in petroleum prices and currency exchange rates;
inflation; changes in equity markets; political developments in
Colombia, Guatemala, Peru, Brazil,
Papua New Guinea and Guyana; changes to regulations affecting the
Company's activities; uncertainties relating to the availability
and costs of financing needed in the future; the uncertainties
involved in interpreting drilling results and other geological
data; and the other risks disclosed under the heading "Risk
Factors" and elsewhere in the Company's annual information form
dated March 13, 2014 filed on SEDAR
at www.sedar.com. Any forward-looking statement speaks only as of
the date on which it is made and, except as may be required by
applicable securities laws, the Company disclaims any intent or
obligation to update any forward-looking statement, whether as a
result of new information, future events or results or otherwise.
Although the Company believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking
statements are not guarantees of future performance and accordingly
undue reliance should not be put on such statements due to the
inherent uncertainty therein.
Boe Conversion
Boe may be misleading, particularly if used
in isolation. A boe conversion ratio of 5.7 Mcf: 1 bbl is based on
an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. The estimated values disclosed in this news release do
not represent fair market value. The estimates of reserves and
future net revenue for individual properties may not reflect the
same confidence level as estimates of reserves and future net
revenue for all properties, due to the effects of
aggregation.
Definitions
Bcf |
Billion cubic feet. |
Bcfe |
Billion cubic feet of natural gas
equivalent. |
bbl |
Barrel of oil. |
bbl/d |
Barrel of oil per day. |
boe |
Barrel of oil equivalent. Boe's may be
misleading, particularly if used in isolation. The Colombian
standard is a boe conversion ratio of 5.7 Mcf:1 bbl and is based on
an energy equivalency conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. |
boe/d |
Barrel of oil equivalent per day. |
Mbbl |
Thousand barrels. |
Mboe |
Thousand barrels of oil equivalent. |
MMbbl |
Million barrels. |
MMboe |
Million barrels of oil equivalent. |
Mcf |
Thousand cubic feet. |
WTI |
West Texas Intermediate Crude Oil. |
Translation
This news release was prepared in the English
language and subsequently translated into Spanish and Portuguese.
In the case of any differences between the English version and its
translated counterparts, the English document should be treated as
the governing version.
SOURCE Pacific Rubiales Energy Corp.
PDF available at:
http://stream1.newswire.ca/media/2014/04/23/20140423_C4702_DOC_EN_39522.pdf