TORONTO, Oct. 2 /CNW/ -- Pacific Rubiales Energy Corp. (TSX: PRE) announced today that Oleoducto de los Llanos Orientales (ODL), the company that built and operates the oil pipeline that joins the Rubiales Field with the Ocensa Pipeline, completed a successful issue of debt securities on October 1, 2009 on the Colombian capital market. ODL is a special purpose vehicle in which Ecopetrol and Pacific Rubiales hold an equity participation of 65% and 35%, respectively. The pipeline runs 235 km from the Rubiales Field to the Monterrey Station. Total investment for the project is US$560 million, including financial costs.

The total amount issued to institutional investors was COP500 billion (equivalent to US$260 million). The securities have a maturity of 7 years with a coupon equivalent to the domestic Consumers Price Index plus 4.88%. The issue has been rated AAA by Fitch.

The investment bank Corficolombiana led the issue, and structured the electronic Dutch auction by which the bonds were allocated under the supervision of the Colombian stock exchange, Bolsa de Valores de Colombia. The issue was over-subscribed to Colombian institutional investors and includes a COP50 billion overallotment option.

Funds will be used to conclude the second phase of the pipeline project, enabling transport capacity to reach 160,000 barrels of oil per day starting January 2010. Funds will also be used to return capital to the partners in ODL, Ecopetrol and Pacific Rubiales Energy, which were advanced for the timely execution of the project. In addition, some of the funds will be used to expand the transport capacity of the pipeline to allow for the transportation of additional volumes from fields neighboring Rubiales: Quifa and Ocelote, as well as from other areas now under exploration.

On September 14, 2009, the President of Colombia Alvaro Uribe formally inaugurated the pipeline by starting the filling process which successfully ended on September 30, 2009, when the first barrel of oil from the Rubiales field arrived at Monterrey and then subsequently transferred into the OCENSA pipeline, marking the direct connection of the Rubiales Field with the Caribbean export port of Covenas.

The first phase of the project was financed with US$260 million of equity contributed by the partners (Ecopetrol and Pacific Rubiales) ending on December 2008; the second phase of the construction was financed by Grupo Aval, a syndicate of local banks formed in March 2009 with a contribution of US$200 million; and the third phase culminates with the issue announced today.

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 Quifa block in the Llanos Basin in association with Ecopetrol S.A., the Colombian national oil company.