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Pacific Rubiales Agrees To Acquire C&C Energia And Create A New Exploration Company

Stocks in this article: PRE

TORONTO, Nov. 19, 2012 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) is pleased to announce it has entered into an arrangement agreement with C&C Energia Ltd. (TSX: CZE) whereby Pacific Rubiales will acquire all of the common shares of C&C Energia (the " Arrangement Agreement").

Pursuant to the Arrangement Agreement, on closing of the acquisition each common share of C&C Energia will be exchanged for 0.3528 common shares of Pacific Rubiales and one common share of a new exploration company (" Newco").  The offer values C&C Energia at approximately Cdn. $7.81 per share, representing a premium of approximately 21% to the 20-day volume-weighted price on the Toronto Stock Exchange of C&C Energia as at November 16, 2012.  In addition, C&C Energia's management estimates Newco's value to be approximately Cdn. $2.00 per share, representing a combined value of approximately Cdn. $9.81 and a premium of approximately 52% over the same period.

Pacific Rubiales is expected to retain a 5% equity interest in Newco.  It is anticipated that the transaction will be effected by way of a court approved plan of arrangement (" Arrangement").

Ronald Pantin, Chief Executive Officer of Pacific Rubiales, commented:  "We consider this to be a win-win for the shareholders of both companies. For Pacific Rubiales shareholders, it adds production and reserves at attractive and accretive metrics and assets whose value can be increased through accelerated activity and transportation and marketing synergies.  For C&C Energia shareholders, it provides an immediate premium valuation, enhanced liquidity and participation in the growth of Colombia's largest independent oil company with a history of generating consistent shareholder returns.  C&C Energia shareholders will also have continued exposure to the producing assets through the new ownership in Pacific Rubiales common shares as well as the exploration upside provided by a well-funded Newco."

Strategic Rationale

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

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