Location and Background

Located in the Llanos Basin, 465 km from Bogota, the Rubiales field is the company's key asset. The Rubiales field is the name given to the Rubiales and Piriri producing concessions. The blocks have a combined area of 569 .

Rubiales consists of mostly basal sands, which produce heavy oil of 12.5° API. We currently have 79 producing wells on the property, of which 25 are vertical and 54 horizontal. The strategic partner for this asset is Ecopetrol, which is the Colombian state-owned oil company. We have a 50% working interest with Ecopetrol in the Piriri Block and a 40% interest with Ecopetrol in the Rubiales Block.

Geology

Oil is produced from the basal sands of the Carbonera Formation. Throughout the Colombian plains, fluvial depositional systems contain prolific hydrocarbon reservoirs. The Tertiary deposits of the Llanos Basin in Colombia correspond to this specific depositional system, which form where braided-meander rivers prograde into lacustrine or marine basins.

History

The Rubiales field was discovered in 1982, but was abandoned because the economics of producing heavy oil at that time could not justify the cost of extraction. In July 2002, Meta Petroleum became the field operator of the Rubiales and Piriri concessions and in that same year, drilled six wells, achieving production of 940 bbl/d. In 2003 Meta invested in field development and drilled 14 new vertical wells, allowing it to reach an average production of 3,817 bbl/d.

When Meta Petroleum was acquired by Petro Rubiales Energy in mid-2007, the goal for the year was to increase production to 17,000 bbl/d. The new management team believed greater production was possible and new growth objectives were set. Management's belief and our employees' skill were rewarded when gross production levels rose to an average of 24,529 bbl/d for the month of December 2007. By March 2009, gross production levels were at 58,000 bbl/d.

Production Milestones

Since the acquisition of Meta Petroleum in July 2007, the company invested $35.5 million, and made operational expenditures of $33.0 million, which included drilling 15 new horizontal producing wells and one new horizontal water disposal well. At the same time, facilities were expanded to deal with the expanded production, consisting mainly of building new well clusters facilities, one new 32,000 bbl storage tank, two Dissolved Air Flotation ('DAF') units with capacities of 40,000 and 60,000 bbl, respectively, improvements to our truck loading capacity and a reengineering of the water treatment system.

Reserves

In 2008, we increased our net heavy oil reserves at the Rubiales-Piriri Blocks almost 85%, going from 62.7 million barrels ('mmbbl') at the end of 2007 to 114.3 mmbbl at the end of 2008. This increase in reserves marks a huge improvement to our resource base. The potential exists to grow our resource base even further, as the Rubiales Reservoir becomes better known. The Rubiales Reservoir is approximately 73,557.6 acres, and has an independently certified Stock Tank Oil Initially In Place ('STOIIP') value of 4.17 billion barrels of oil. Increased exploration on the Rubiales Reservoir has resulted in a one billion barrel, or 30%, increase in STOIIP over 2007. The company believes that it has the potential to grow its STOIIP value even further with more exploration of the Rubiales Reservoir. The table below summarizes our growth in reserves:

Heavy Oil Reserves

Heavy Oil Reserves	2007 Year End	2008 Year End
Proved Reserves (P1) Rubiales-Piriri Blocks
Net (before royalties)(I)	62.7 mmbbl	114.3 mmbbl
Net (after royalties)(I)	50.2 mmbbl	91.4 mmbbl

(I) Net refers to equity production after deduction of royalty

Rubiales Expansion

Master Plan:

We are continuing to expand Rubiales' production facilities to greatly increase our capacity and production potential. Our plan involves two phases: expansion of CPF-1 and construction of CPF-2.

The expansion of CPF-1 will increase our capacity from 50,000 bbl/d to 100,000 bbl/d by the end of 2009, while CPF-2 will provide an additional 50,000 bbl/d capacity for 2010, bringing the processing capacity to a total of 150,000 bbl/d by the end of 2010. The expansion will provide new facilities such as 200,000 barrels of water per day water treatment units, cooling towers, and 65,000 bbl/d electrostatic dehydrators. As of January 31, 2009, Phase I of this project was 56% completed.

ODL Pipeline:

The key to expanding production at Rubiales is to transport the crude oil to market effectively and at low cost. In order to do that, the company, together with Ecopetrol, formed a special purpose vehicle, Oleoducto de Los Llanos (ODL), to build and operate an oil pipeline. We have a 35% equity interest with Ecopetrol which has a 65% equity interest in ODL, a 235 kilometre, 24-inch pipeline which will connect the Rubiales field to the Monterrey station, and from there to the Coveñas export terminal on the Colombian-Caribbean coast.

We are currently in Phase I of construction, which is expected to be completed in the third quarter of 2009. At year end the pipeline was approximately 45% complete. Phase I is expected to cost ODL US$370 million, while Phase II will cost US$160 million.

Phase I will see the Rubiales field connected to the main Colombian oil transportation network, significantly reducing the cost of transportation and allowing early pumping of Rubiales' production, even before the main pumping facilities of Phase II are completed. ODL has been able to create this two-phased approach to utilizing the pipeline through the use of early pumping capacity that ODL has already located and is putting in place. This early utilization of the pipeline, in conjunction with the rescaling of the trucking fleet currently used by the company to transport its crude, will set the foundation for ramping up the field to a production of up to 100,000 bbl/d in the last quarter of 2009 at a significantly lower cost. Current heavy oil production on a gross basis is approximately 58,000 bbl/d. Phase II of the construction of the ODL pipeline will see the pipeline reaching full capacity (170,000 bbl/d) by 2010.

In February 2009, ODL received credit approval for a US$200 million debt facility, in Colombian Pesos equivalent, to be provided by Grupo Aval, a Colombian banking group led by Banco de Bogota, which enables the funding for the completion of the pipeline project.