Pantin

PRE CEO Ronald Pantin

Pacific Rubiales Energy Corp. (TSX:PRE), Colombia's largest non-state owned oil producer, are selling the 5% OCENSA pipeline interest they gained by acquiring Petrominerals last month to Darby Private Equity, the private equity arm of Franklin Templeton, for $385-million (U.S.).

Ronald Pantin, the company's chief executive officer, commented: "This transaction represents an attractive deal for both companies. Darby will receive a steady and secure rate of return on its investment. Pacific Rubiales will receive U.S.$385 million in cash, which we will use to pay down the debt incurred by the Company in connection with the Petrominerales acquisition, reducing the acquisition cost to approximately Cdn.$1.2 billion and significantly improving the acquisition metrics.

"In addition we have secured approximately 29 Mbbl/d of long-term transportation capacity in the largest and most secure oil pipeline in Colombia, which is very strategic to the Company's plans to increase its heavy oil production out of the southern Llanos basin. Along with our existing preferential capacity rights in the OCENSA pipeline and our interests in the new Bicentenario oil pipeline, this additional capacity in the OCENSA pipeline will largely eliminate our need for major long-haul trucking and is expected to reduce our overall transportation costs in the future."

Source: Pacific Rubiales Energy Corp.

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