TORONTO, July 24, 2012 /PRNewswire/ – Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC; BOVESPA: PREB) is pleased to announce that it has signed
binding letters of agreement with Petrolera Monterrico S.A. Sucursal
Colombia (“Petromont”) to acquire a 40% participating interest and with
Canacol Energy Ltd. (TSX: CNE) to acquire operatorship, of the onshore
Portofino exploration block in Colombia.

The Portofino block has an area of approximately 1,047 km², and is located at the north-eastern corner of the Caguan-Putumayo
basin in southern Colombia. The block is located within the heavy oil
trend that hosts the giant producing fields of Rubiales/Quifa and
Castilla/Chichemene, and on trend and adjacent to the developing
Capella heavy oil field. The block contains one prospect with a
management estimated P50 resource potential of 140 MMbbl and up to four
additional leads with approximately 160 MMbbl.

Ronald Pantin, Chief Executive Officer of the Company, commented: “This
is an exciting opportunity and an excellent fit with the Company’s
expertise in heavy oil development. Pacific Rubiales is already the
largest operator and producer of heavy oil in Colombia and has one of
the largest net land positions along the heavy oil resource trend. This
acquisition adds to the existing portfolio, providing future growth
potential to the Company.”

The transaction consists of a US$23.5 million cash payment to Petromont
which includes payment for past exploration costs, plus a US$2.2
million carry of their obligations related to an approved exploration
work program. As part of the agreement, there is an additional carry
obligation to finance certain production facilities and other
activities required for the development of the block of up to US$45
million. This carry obligation will be recovered from the proceeds of
production.

In a separate agreement, the Company will pay Canacol a cash
consideration of US$3.7 million to assume operatorship of the block.
Pacific Rubiales will be transferred operatorship of the block
following the drilling of the next four wells.

The transaction is subject to government and regulatory approvals.

Pacific Rubiales, a Canadian-based company and producer of natural gas
and heavy crude oil, owns 100 percent of Meta Petroleum Corp., a
Colombian oil operator which operates the Rubiales, Piriri and Quifa
oil fields in the Llanos Basin in association with Ecopetrol, S.A., the
Colombian national oil company, and 100 percent of Pacific Stratus
Energy Corp. which operates the La Creciente natural gas field. 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 43 blocks
in Colombia, Peru and Guatemala.

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 press 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 or Peru; 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 14, 2012 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.

In addition, reported production levels may not be reflective of
sustainable production rates and future production rates may differ
materially from the production rates reflected in this press release
due to, among other factors, difficulties or interruptions encountered
during the production of hydrocarbons.

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.
MMcf	Million cubic feet.
MMcf/d	Million cubic feet per day.
Tcf	Trillion cubic feet.
WTI	West Texas Intermediate Crude Oil.

SOURCE Pacific Rubiales Energy Corp.