TORONTO, July 27, 2012 /PRNewswire/ – Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC; BOVESPA: PREB) today announced that it has completed its
acquisition of PetroMagdalena Energy Corp. (TSX-V: PMD).

PetroMagdalena has working interests in 19 properties in five onshore
basins in Colombia producing approximately 3.6 Mboe/d (approximately
95% light/medium crude oil and natural gas liquids) net after royalty
in the first quarter of 2012 and with 2011 year-end net proved plus
probable reserves of 22.9 MMboe (64% light/medium crude oil and natural
gas liquids).¹

Ronald Pantin, Chief Executive Officer of the Company, commented: “We
know the PetroMagdalena assets well. The Company can apply its
financial resources and technical expertise to unlock and accelerate
exploration and development, growing production and also achieving a
reduction in consolidated G&A costs. The acquired production provides
the Company with a reliable and growing supply of diluent, which is
required for its heavy oil production in Colombia and adds bolt-on
exploration acreage.”

The acquisition was completed today pursuant to a plan of arrangement
under the British Columbia Business Corporations Act. Under the arrangement, a wholly-owned subsidiary of Pacific Rubiales,
0942183 B.C. Ltd (the “Purchaser”), acquired all of the outstanding
PetroMagdalena common shares not already owned by it or its affiliates
for $1.60 per share (approximately $225 million in the aggregate). The
Purchaser acquired 140,738,004 common shares of PetroMagdalena pursuant
to the arrangement which, when added to the shares of PetroMagdalena
already owned by the Purchaser (being 8,653,516), results in the
Purchaser owning 149,391,520 common shares, representing 100% of the
outstanding PetroMagdalena shares. In addition, PetroMagdalena’s share
purchase warrants (TSX-V: PMD.WT) were cancelled under the terms of the
Arrangement for $0.25 in cash for each unexercised warrant held.

The Purchaser is a wholly-owned subsidiary of Pacific Rubiales. The
Purchaser’s address is: 333 Bay Street, Suite 1100, Toronto, Ontario,
M5H 2R2. To obtain a copy of the report filed with the Canadian
securities regulatory authorities relating to the acquisition of the
shares of PetroMagdalena, please contact the Company’s Secretary,
Michael Galego at (416) 362-7735 x234.

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.

Cautionary Statement on Forward-looking Information

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.

Statements concerning oil and gas reserve estimates may also be deemed
to constitute forward-looking statements to the extent they involve
estimates of the oil and gas that will be encountered if the property
is developed. Barrels of oil equivalent may be misleading, particularly
if used in isolation. A barrel of oil equivalent conversion ratio of 6
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.

Production and reserves information in this news release is based on the
public disclosure of PetroMagdalena.

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.
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.

¹ Effective date of the reserves information is December 31, 2011. Gas
volumes when expressed in BOE’s were converted using 6,000 cubic feet
of gas equivalent to one barrel of oil.

SOURCE Pacific Rubiales Energy Corp.