Pacific Rubiales announces U.S.$320 million sale of interest in Pacific Midstream to IFC
Pacific Rubiales Energy Corp. (TSX: PRE) (BVC: PREC) (BOVESPA: PREB) announced that it has executed definitive agreements with the International Financial Corporation (“IFC”), a member of the World Bank Group, the IFC Global Infrastructure Fund (“GIF” managed by the IFC Asset Management Company LLC) and a consortium of investors, whereby it has agreed to sell approximately 43% of its interest in Pacific Midstream Ltd. (“Pacific Midstream”), which holds certain of the Company’s pipeline and power transmission assets, for a total consideration of U.S.$320 million.
The agreements will provide the Company with U.S.$240 million in cash, which will be received by year-end. In addition, Pacific Midstream will receive U.S.$80 million in the first quarter of 2015, plus a commitment for an additional U.S.$60 million in cash to develop future infrastructure projects.
Ronald Pantin, Chief Executive Officer of the Company, commented:
“We are pleased to announce this sale, which will significantly improve our cash position and provide additional flexibility as we enter into an uncertain oil price environment in 2015. The participation by IFC underlines the strategic importance and value of our infrastructure assets in Colombia. We will continue to hold a majority interest in Pacific Midstream and capacity rights in its assets, allowing us to maintain the cost advantages that we currently enjoy with respect to crude oil transportation and low cost electricity in our main oil fields in Colombia.
“Our financial and capital strategy is focused on maintaining a healthy balance sheet and ensuring funding for our future growth, while generating strong returns to our shareholders. In light of the current weaker commodity price environment, we continue to evaluate all of our capital expenditure programs and we have additional flexibility to scale back capital spending, as well as opportunities for further cost savings. We will continue to monetize our midstream assets and plan to sell certain non-core E&P assets, the proceeds from which will be used to reduce debt.”
Source: Pacific Rubiales Energy Corp.