Pacific Rubiales announces dividend

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Pacific Rubiales Energy Corp. (TSX: PRE; BVC: PREC) announced today a cash dividend in the aggregate amount of US$25,000,000, which translates to US$0.093 per common share. The dividend is payable on September 30, 2011 to shareholders of record as of September 20, 2011. The ex-dividend date isSeptember 16, 2011. For shareholders trading on the Colombian stock exchange, the peso equivalency shall be calculated based on the exchange rate as certified by the "Superintendencia Financiera de Colombia" (the "SFC") on the date of monetization and will be published on the SIMEV website at the proper time.

Subject to approval from the Board of Directors, the Company expects to continue paying a dividend on a quarterly basis, with such decision being determined based on funds from operations, earnings, financial requirements, commodity price levels, legal requirements and other conditions existing in the future. This policy will continue to be reviewed by the Board of Directors, as needed, from time to time. Future dividends on Pacific Rubiales common shares are not guaranteed.

The Company intends to designate all dividends as "eligible dividends" for purposes of the Income Tax Act (Canada) unless a notification of change is otherwise posted on the Company's website and www.sedar.com. Provided designation is made, the dividend will be considered an "eligible dividend" for tax purposes. An eligible dividend received by a Canadian resident individual shareholder is entitled to the enhanced dividend tax credit.

TAX CONSIDERATIONS

General

The information in this release is not intended to be an exhaustive discussion of all possible income tax consequences and considerations, but a general guideline. It is not intended to be legal or tax advice to any particular investor or potential investor. Investors or potential investors should consult their own tax advisors as to their particular tax consequences and reporting obligations.

The following information is provided for general information only. Investors are encouraged to seek advice from a qualified tax advisor in their country of residence to obtain guidance with respect to appropriate tax treatment of their distributions.

For Canadian Residents

For Canadian income tax purposes, the dividend paid to shareholders of Pacific Rubiales will be a taxable dividend. In the case of a shareholder who is an individual resident in Canada, dividends will be subject to the gross-up and credit rules contained in the Income Tax Act (Canada), and, in the case of a shareholder that is a "private corporation" or a "subject corporation" (both as defined in the Income Tax Act (Canada)), a refundable tax will apply to the amount of the dividend. Shareholders should contact their tax advisor or their local office of the Canada Revenue Agency with respect to any questions regarding the taxation of eligible dividends.

For Colombian Residents

Dividends paid to residents of Colombia will be subject to a Canadian 25% withholding tax on 100% of the gross distribution. Under Colombian tax rules, dividends will be subject to tax. Generally a corporation resident in Colombia is subject to tax at 33% of net income and individuals are subject to tax based on a progressive table as applicable. Amounts paid as foreign taxes may be eligible for a foreign tax credit in Colombia. For a more detailed discussion on the logistics and tax implications, shareholders should contact their tax advisor or their local office of the Colombian tax agency (DIAN), with respect to any questions regarding the taxation of these dividends or the application of foreign tax credits. In addition, they should consult the dividend circular that will be made available on the SIMEV.

For U.S. Residents

Subject to various U.S. statutory holding period requirements, distributions made by the Company out of its current or accumulated "earnings and profits" may be considered "qualified dividend income" as defined under U.S. tax law, and thus may be taxed at the reduced tax rates applicable to long term capital gains, provided that the Company has the status of a "qualified foreign corporation" for the year ended December 31, 2011. These reduced rates may not be available to shareholders of the Company other than U.S. resident individuals. In addition, distributions in excess of the Company's current or accumulated "earnings and profits" may reduce the U.S. tax basis of the shareholder's shares of the Company.

Pursuant to the Canada - U.S. Tax Treaty, dividends paid to residents of the United States may be subject to a 15% withholding tax on 100% of the gross distribution. Amounts paid for foreign taxes may be eligible for either a deduction for foreign taxes or a foreign tax credit in the United States; both the deduction and credit for foreign taxes are subject to numerous limitations imposed by U.S. tax law which are not discussed in this summary.

Shareholders should contact their tax advisor or their local office of the Internal Revenue Service with respect to any questions regarding the taxation of such dividend distributions.