TORONTO, Sept. 29, 2013 /PRNewswire/ – Pacific Rubiales Energy Corp. (TSX: PRE;
BVC: PREC; BOVESPA: PREB) is pleased to announce that it has entered
into an agreement with Petrominerales Ltd. (TSX: PMG; BVC: PMGC) to
acquire all of the outstanding common shares of Petrominerales (the “Arrangement Agreement“).

Under the Arrangement Agreement, Petrominerales shareholders will
receive Cdn.$11.00 cash for each Petrominerales common share held, for
a total value of approximately Cdn.$935 million in cash, plus one
common share of a newly formed exploration and production company (“ExploreCo“), and the assumption of net debt estimated at Cdn.$640 million,
including convertible bonds.

ExploreCo’s assets will consist of Petrominerales’ Brazilian exploration
assets and Cdn.$100 million in cash.

The total purchase price on a fully diluted basis, including assumed net
debt, and excluding funding of ExploreCo, will be approximately
Cdn.$1.6 billion. Financing of the acquisition will be accomplished by
cash on hand and bank credit facilities including a committed U.S.$1.3
billion short term bank facility, which the Company expects to
refinance after the acquisition is completed. The cash consideration
per Petrominerales share represents a premium of approximately 56% to
the 20-day volume-weighted trading price on the Toronto Stock Exchange
of Petrominerales as at September 27, 2013.

It is anticipated that the transaction will be effected by way of a
court approved plan of arrangement (the “Arrangement“).

“This acquisition is an excellent fit with our strategy, provides
immediate capture of additional value through asset synergies, and
grows production and cash flow at attractive metrics,” commented Ronald
Pantin, Chief Executive Officer of Pacific Rubiales. “The light oil
production and reserves can be integrated with our growing heavy oil
production, providing a lower cost source of diluent into the future.
Also, this acquisition provides the Company with additional lower cost
and reliable transportation infrastructure by way of Petrominerales’
interests in the OCENSA and OBC oil pipelines in Colombia, which are
highly strategic to the Company’s plans to increase its heavy oil
production in the country.

“This is an all cash deal, which will not result in any dilution to
existing Pacific Rubiales shareholders and will be highly accretive.
Funding of the acquisition will be accomplished via cash on hand and
bank credit facilities, including a committed U.S.$1.3 billion short
term bank facility which will be refinanced after the acquisition is
completed. We expect to pay down a significant portion of the newly
acquired debt, largely through the sale and/or spin-out of all or part
of the acquired equity pipeline interests, as well as other midstream
assets currently owned by the Company, but will retain capacity and
access through long-term contractual arrangements. Following the sale
of such assets, we are targeting a pro-forma Debt/EBITDA ratio of less
than 1x to maintain the strength and integrity of our balance sheet.
Our pro-forma 2014 operations are expected to generate up to U.S.$4
billion EBITDA in the current commodity price environment.

“Overall, the acquisition adds production and reserves at attractive and
accretive metrics, assets whose value can be increased through
accelerated activity, transportation and marketing synergies, and
exploration upside. This not only strengthens our focus in Colombia and
Peru, but also builds on our proven track record of extracting value by
growing production and generating cash flow.”

The Assets

The Arrangement will result in the acquisition of approximately 9.8
million gross (6.8 million net) acres of exploration and development
properties in Colombia and Peru, as well as oil pipeline interests in
Colombia.

In the first six months of 2013, these assets produced approximately 22
Mbbl/d gross (19 Mbbl/d net). Reported 2P reserves at year-end 2012
were 41.3 MMbbl gross (36.5 MMbbl net), with approximately 65% of these
being total proved reserves.

In aggregate, Pacific Rubiales will acquire the following assets from
Petrominerales:

• 18 blocks covering 1.6 million gross/net acres in Colombia;

• 4 blocks covering 8.2 million gross (5.2 million net) acres in Peru;

• 5% equity interest in the Oleoducto Central S.A. (“OCENSA“) oil pipeline in Colombia; and

• 9.65% equity interest in the Oleoducto Bicentenario de Colombia (“OBC“) oil pipeline also in Colombia.

Petrominerales’ Brazil assets will be spun out into the newly formed
ExploreCo prior to the closing of the Arrangement.

Estimated Transaction Value Components

	Estimated Value (Cdn.$billions)
Acquisition Cost (share purchase + assumption of debt)	$1.6
Less value of oil pipeline interests Less operational synergy savings	($0.4)1 ($0.3)2
Value attributed to production and reserves	$0.9

¹Estimated value of 5% OCENSA pipeline and 9.65% OBC pipeline interests
²Estimated discounted value, principally from transportation and
marketing synergies

The acquisition includes both producing as well as significant
infrastructure assets in the form of strategic oil pipeline interests.
The Company estimates the value of the pipeline interests at up to
Cdn.$0.4 billion, and the value of cost saving attributed to various
operational optimizations at Cdn.$0.3 billion, which will be achieved
principally through: 1) a significant reduction in natural gasoline
purchases used for diluent, 2) use of pipeline capacity for oil
transportation, replacing trucking, and 3) optimizations on blending of
crude oil.

After deducting the value of the non-reserve assets from the total
purchase price, the acquisition of Petrominerales implies net metrics
of approximately U.S.$47,000/bbl/d on a net flowing production basis,
and U.S.$25/bbl on 2012 year-end 2P net reserves (additional
discoveries on the Petrominerales blocks in 2013 are expected to result
in reserve additions at year-end 2013). These acquisition metrics are
comparable to those associated with the Company’s C&C Energia Ltd.
acquisition completed in late 2012 and are attractive given the
predominantly light oil and high netback nature of the assets.

Strategic Rationale

Pacific Rubiales believes that this is a highly strategic acquisition
which provides further visibility into its ability and business
leverage to increase production and reserves, both organically and
acquisitively at attractive and competitive metrics.

The key attributes of the acquired Petrominerales assets are:

• the acquired assets are all located in Colombia and Peru in prolific
  basins with which we are familiar and are aligned with our core
  capabilities and expertise;

• the majority of the production is derived from operated and high working
  interest properties in the Llanos basin, Colombia, in close proximity
  to Pacific Rubiales’ existing infrastructure, creating additional
  synergy value;

• current production, reported in the first half of 2013, of approximately
  22 Mbbl/d gross (19 Mbbl/d net), is primarily high quality and high
  netback light oil;

• the light oil production provides a reliable and lower cost supply of
  diluent available to mix with the Company’s growing heavy oil
  production;

• provides additional production and reserves and free cash flow to
  Pacific Rubiales’ portfolio;

• provides the opportunity to access additional reliable transportation
  infrastructure from interests in the OCENSA (5%) and OBC (9.65%) oil
  pipelines, strategic to the Company’s plans to significantly increase
  its heavy oil production from the Llanos basin;

• upside potential to unlock additional value from a substantial
  exploration land and resources base; and

• the acquisition is largely accomplished by short-term debt with the
  Company having a viable plan to pay down some of the additional debt,
  targeting a pro-forma Debt/EBITDA ratio of less than 1x by year-end
  2014, maintaining the strength and integrity of its balance sheet.

Terms of the Arrangement

The Arrangement is subject to approval by the shareholders of
Petrominerales, court approval, regulatory, stock exchange and other
approvals, and satisfaction of all other customary closing conditions.
To proceed, the Arrangement must be approved by at least 66 2/3% of the
votes cast by Petrominerales’ shareholders voting on the resolution to
approve the Arrangement. The Arrangement is expected to close in the
fourth quarter of 2013.

The Arrangement Agreement also provides that, in certain specified
circumstances, Petrominerales will pay Pacific Rubiales a
non-completion fee of U.S.$60 million, and a reciprocal non-completion
fee is payable by Pacific Rubiales to Petrominerales in certain
specified circumstances. In addition, the Arrangement Agreement
provides for an irrevocable offer by Pacific Rubiales to purchase
Petrominerales’ equity interest in the OCENSA pipeline if the
Arrangement is not completed by December 10, 2013 for any reason,
provided that: (i) Petrominerales has not entered into an agreement to
sell its OCENSA equity interest to a third party, and (ii) the
Arrangement Agreement has not terminated due to the fault of
Petrominerales. The Arrangement Agreement includes customary
provisions, including those related to no solicitation of alternative
transactions, right to match superior proposals and fiduciary-out
provisions. A copy of the Arrangement Agreement will be filed by
Petrominerales on SEDAR and will be reviewable under Petrominerales’
profile at www.sedar.com.

Board of Director Recommendation and Financial Advisors

The board of directors of Petrominerales, having received a fairness
opinion in connection with the Arrangement, has unanimously approved
the Arrangement Agreement and recommend that the shareholders of
Petrominerales vote in favour of the Arrangement.

Bank of America Merrill Lynch acted as exclusive financial advisor to
Pacific Rubiales in connection with the transaction. Norton Rose
Fulbright Canada LLP acted as Pacific Rubiales’ exclusive transaction
counsel.

Support Agreements

The Arrangement has the support of executive officers and directors of
Petrominerales who collectively hold approximately 4% of the fully
diluted common shares of Petrominerales. Each of the aforementioned
executive officers and directors has entered into support agreements to
vote in favour of the Arrangement.

Conference Call

Pacific Rubiales has scheduled a telephone conference call for investors
and analysts on Monday September 30, 2013 at 8:00am (Bogotá time),
9:00am (Toronto time) and 10:00am (Rio de Janeiro time) to discuss the
Arrangement. Participants will include Ronald Pantin, Chief Executive
Officer, and selected members of senior management. Additional details
will be published via news release prior to the conference call.

About Pacific Rubiales

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 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.

About Petrominerales

Petrominerales Ltd. is a Latin American focused exploration and
production company with a high-quality land base of exploration and
development opportunities in Colombia, Peru and Brazil.

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, anticipated integration of acquisitions, 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.

This press release also contains forward-looking statements and
information concerning the anticipated completion of the Arrangement
and the anticipated timing for completion thereof. Pacific Rubiales has
provided these anticipated times in reliance on certain assumptions
that they believe are reasonable at this time, including assumptions as
to the timing of receipt of the necessary regulatory and court
approvals and the time necessary to satisfy the conditions to the
closing of the Arrangement. These dates may change for a number of
reasons, including unforeseen delays in preparing meeting materials,
inability to secure necessary regulatory or court approvals in the time
assumed or the need for additional time to satisfy the conditions to
the completion of the Arrangement. There is no guarantee that the
Arrangement will close at the anticipated time or at all. Accordingly,
readers should not place undue reliance on the forward-looking
statements and information contained in this press release concerning
these times and the Arrangement.

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, 2013 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 news release due
to, among other factors, difficulties or interruptions encountered
during the production of hydrocarbons.

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.

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.

SOURCE Pacific Rubiales Energy Corp.