Pacific Rubiales expands in Colombia

Canadian-based Pacific Rubiales Energy has agreed to buy 100% of Colombian explorer Kappa Energy Holdings for a cash payment of about $168 million.

Kappa holds exploration and production licenses in Colombia with gross acreage of 747,000.

The acreage consists of nine leased blocks in the Catatumbo, Lower, Middle and Upper Magdalena, and Llanos basins of Colombia, with the following net working interests: Abanico (22.5% in the production area and in the Santana and Casablanca exploration areas, with 23.8% and 14.8% working interests, respectively, and 30.5% working interests in the remaining exploration areas), Alhucema (50%), Arrendajo (32.5%), Cerrito (average 75%), Chipalo (50%), Cicuco (100% for gas and oil), Guasimo (100%), Buganviles (49%) and Las Quinchas (50%).

The Abanico contract area includes the main oil producing field, Abanico (4100 gross barrels per day) and gas producing field, Ventilador (4.3 gross million cubic feet per day).

Three of the exploration contracts, with the ANH (Guasimo, Alhucema and Arrendajo), are in the drilling phase and the other two, with Ecopetrol (Chipalo and Buganviles), are in the exploration phase. Acacia Este (part of the Las Quinchas block) offers the largest exploration potential.

Pacific Rubiales said the buy will expand the resource base of the company and enhance the future exploration potential by adding new blocks that it believes are highly promising.

GMP Securities will serve as exclusive financial advisor in connection with this transaction.

The purchase is expected to be completed in September.

Pacific Rubiales also owns 100% of Colombian operator Meta Petroleum which operates the Rubiales and Piriri oil fields in the Llanos basin in association with Ecopetrol.

The company is focused on identifying opportunities primarily within the eastern Llanos basin of Colombia as well as in other areas in Colombia and northern Peru.

Pacific Rubiales has working interests in the Rubiales, Piriri and Quifa concessions and the Caguan, Dindal, Rio Seco, Puli B, La Creciente, Moriche, Guama, Arauca, Tacacho and Jagueyes blocks in Colombia and blocks 135, 137 and 138 in Peru.