In TO454 transmitted yeasterday March 13 at 22:55e, an error occurred in the first sentence of the second paragraph, "60% after royalties" should have read "60% before royalties". Corrected copy follows: transmitted yeasterday March 13 at 22:55e, an error occurred in the first sentence of the second paragraph, "60% after royalties" should have read "60% before royalties". Corrected copy follows:
Pacific Rubiales Announces Arbitration Decision Regarding High-Price Provisions in its Quifa Association Contract and Evaluates Next Course of Action
TORONTO, March 13, 2013 /PRNewswire/ - Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC; BOVESPA: PREB) announced today that a commercial arbitration decision in Colombia has been rendered in connection with its dispute with Ecopetrol, S.A. ("Ecopetrol") regarding the interpretation of the high-prices clause ("PAP") of its Quifa Association Contract. The Company is evaluating the decision as it leaves open several unresolved issues. The Company is also evaluating all of its alternative remedies under Colombian laws and applicable international treaties.
The Company's share of production in the Quifa SW field is 60% before royalties. This participation may decrease when the application of the PAP is triggered.On September 27, 2011, Ecopetrol and the Company agreed on an arbitration process to settle differences in the interpretation of the PAP clause in the Quifa Association Contract and its effect on their share of production. On March 13, 2013, the arbitration panel delivered its decision interpreting that the PAP formula should be calculated on 100% of the production of the Quifa SW field, instead of simply the Company's 60%. However, the arbitration panel expressly denied Ecopetrol's demand for an order for Pacific Rubiales to deliver the associated volumes of hydrocarbons as a result of its interpretation of the PAP formula. The arbitration decision is not yet firm nor does it provide enforceable remedies against the Company.