Pacific Rubiales to buy Kappa of Colombia

Pacific Rubiales Energy Corp., Toronto, will buy Kappa Energy Holdings Ltd. of Colombia for $168 million.

July 8, 2008

By OGJ editors
HOUSTON, July 8 -- Pacific Rubiales Energy Corp., Toronto, will buy Kappa Energy Holdings Ltd. of Colombia for $168 million.

Kappa Energy, operating since 1997, holds 747,000 gross acres in nine operating blocks in the Catatumbo, Llanos, and Lower, Middle, and Upper Magdalena basins.

Kappa Energy holds the following net working interests: Abanico block, 22.5% in the production area, 23.8% and 14.8%, respectively, in the Santana and Casablanca exploration areas, and 30.5% 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, making 4,100 b/d, and Ventilador gas field making 4.3 MMcfd. Guasimo, Alhucema, and Arrendajo are in the drilling phase.

Kappa Energy had 9.3 million boe of proved and probable reserves as of May 31.

Pacific Rubiales operates numerous blocks in Colombia and three blocks in Peru.