Pacific Rubiales to acquire Petrominerales for $907m

Pacific Rubiales Energy has signed an agreement to acquire all of the outstanding common shares of exploration and production company Petrominerales in a transaction worth C$935m ($907m).

The total purchase price on a fully diluted basis, including assumed net debt, and excluding funding of ExploreCo, will be approximately C$1.6bn ($1.5m).

According to Pacific Rubiales, ExploreCo’s assets will comprise Brazilian exploration assets and C$100m ($97m) in cash.

The arrangement results in the acquisition of around 9.8 million gross acres of exploration and development properties in Colombia and Peru, as well as oil pipeline interests in Colombia. The assets produced around 22 million barrels a day gross in the first six months of 2013.

Pacific Rubiales chief executive officer Ronald Pantin said that the light oil production and reserves can be integrated with the company’s growing heavy oil production.

"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," Pantin added.

Under the agreement, Pacific Rubiales will acquire 18 blocks covering 1.6 million gross/net acres in Colombia; four blocks covering 8.2 million gross acres in Peru; 5% equity interest in the Oleoducto Central oil pipeline; and 9.65% equity interest in the Oleoducto Bicentenario de Colombia oil pipeline in Colombia from Petrominerales.

The acquisition includes both producing and infrastructure assets in the form of strategic oil pipeline interests.