Suroco Energy Inc.
TSX VENTURE : SRN

Suroco Energy Inc.

April 18, 2011 06:00 ET

Suroco Energy Inc. Announces Commencement of Cohembi-3 Appraisal Well and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - April 18, 2011) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Suroco Energy Inc. (TSX VENTURE:SRN) ("Suroco" or the "Corporation") is pleased to announce that the Cohembi-3 well, which is the second appraisal well in the Cohembi oil field in the Suroriente Block was spudded on April 14, 2011.

Mr. Alastair Hill, the Corporation's President commented, "Following the recent success of the Cohembi-2 well, which confirmed a thicker oil bearing interval than the original discovery well in the field, we now look forward to results from this appraisal well which will add to our knowledge of the reservoir quality and extent and provide an important step towards defining further appraisal and stepout drilling locations as a precursor to the full field development".

Cohembi-3 Well

The Cohembi-3 appraisal well is located approximately 1 km to the northwest of the producing Cohembi 1 well. The Cohembi-3 well is the second well in the appraisal program for this field and will target the Villeta N reservoir. The offsetting Cohembi-1 well has cumulative gross oil production of 2.6 million barrels as at March 31, 2011 with no significant water production and is currently producing approximately 1,950 barrels per day of oil (284 barrels per day net after royalty).

Operations Update

Suroriente Block Production and Well Workover Program

The Corporation holds a 15.8% working interest in the Suroriente Block, where production as of April 13, 2011 is 6,400 barrels of oil per day (932 barrels per day net after royalty). Production from the Suroriente Block for the first quarter of 2011 was 4,768 barrels per day (695 barrels per day net after royalty). The average price per barrel of oil sold for the quarter was $US 92.20 per barrel.

The Cohembi-2 well was put on permanent production on March 22, 2011 and has produced at an average rate of 1,453 barrels per day of oil (212 barrels per day net after royalty) from March 22, 2011 to April 13, 2011. This well demonstrates significantly higher productive capability than the Cohembi-1 well and is currently being produced at a conservative rate while monitoring the stabilization of production characteristics.

The Pinuna-5 well has recently had an electric submersible pump replaced and is back on production at 1,250 barrels of oil per day (182 barrels per day net after royalty). The service rig will stay on the Suroriente Block to complete a number of other workovers, including the Pinuna-2 well where the operator plans to perforate and test the oil-bearing Villeta U sand (which is calculated to have 23 feet of untested net oil pay). The well will then be configured to produce selectively from either the currently producing Villeta T or the Villeta U, depending on test results.

Exploration Activity in Putumayo Basin Blocks

A 3D seismic survey covering part of the Alea 1848A Block (where the Corporation holds a 50% working interest) and a contiguous part of the northern Suroriente Block (where the Corporation holds a 15.8% working interest) has recently been completed. In the Alea 1848A Block this survey will enable the final location selection to be made for an exploration well which is planned for drilling in the second half of 2011. In the Suroriente Block the survey will assist in defining future drilling locations along a prospective structural trend which contains the presently suspended Quinde oil well.

The Corporation is a Calgary-based junior oil and gas company, which explores for, develops, produces and sells crude oil, natural gas liquids and natural gas in Colombia and Western Canada. The Corporation's common shares trade on the TSX Venture Exchange under the symbol SRN.

Forward Looking Statements

This press release contains forward-looking statements relating to the operational and exploration activities for Suroco and other statements. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause actual performance and results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These assumptions, risks and uncertainties include, among other things, the state of the economy in general and capital markets in particular; fluctuations in oil prices; the results of exploration and development drilling, recompletions and related activities; the uncertainty of reserve estimates; changes in environmental and other regulations; risks associated with oil and gas operations and future exploration activities; and other factors, many of which are beyond the control of the Corporation. You can find an additional discussion of those assumptions, risks and uncertainties in Suroco's Canadian securities filings.

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Suroco disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Suroco undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Suroco Energy Inc.
    Alastair Hill
    President and Chief Executive Officer
    (403) 232-6784
    (403) 232-6747

    Suroco Energy Inc.
    Travis Doupe
    VP Finance and Chief Financial Officer
    (403) 232-6784
    (403) 232-6747
    www.suroco.com