Suroco Energy Inc.

Suroco Energy Inc.

May 29, 2012 19:49 ET

Suroco Energy Inc. Announces Filing of First Quarter Financial Statements and MD&A

CALGARY, ALBERTA--(Marketwire - May 29, 2012) -


Suroco Energy Inc. (TSX VENTURE:SRN) (the "Corporation") is pleased to announce that it has filed its Unaudited Condensed Consolidated Financial Statements and the related Management's Discussion and Analysis ("MD&A") for the quarter ended March 31, 2012 on the System for Electronic Document Analysis and Retrieval ("SEDAR").

Copies of these documents can be found on the SEDAR website at

Alastair Hill, the Corporation's President and CEO commented, "After commencing the Cohembi oilfield drilling program in mid March, we have been very encouraged by the results of the Cohembi-5 and Cohembi-7 wells which have provided strong support for the feasibility of our planned water injection project to significantly increase the amount of oil that can be recovered from this large accumulation, whilst continuing to grow the Corporation's oil production. The 2012 capital program for Cohembi and other projects is expected to be funded internally from working capital and cashflow generated from production."

Financial & Operating Highlights
(All references to $are United States dollars unless otherwise noted)
3 months ended March 31
2012 2011
Oil and gas revenue ($) 12,251,892 9,384,624
Funds flow from operations (1) ($) 5,141,183 2,600,058
Per share - basic and diluted ($) 0.04 0.02
Net income ($) 2,031,458 (125,530 )
Net income (loss) attributable to shareholders ($) 712,762 (957,404 )
Per share - basic and diluted ($) (0.01 )
Total assets ($) 65,257,174 55,449,175
Working capital surplus (2) ($) 13,490,356 15,840,969
Common shares outstanding, end of period
Basic 124,469,734 121,353,176
Diluted (3) 162,397,469 159,240,729
Weighted average common shares outstanding
Basic 124,120,618 120,978,065
Diluted (3) 129,853,800 120,978,065
Average daily net after royalty production (barrels of oil per day) 876 702
Average reference price - WTI ($ per barrel) 102.88 94.25
Operating Netback ($ per barrel)
Average realized price 103.81 82.01
Royalties 8.30 6.09
Production and transportation expenses 32.82 18.39
Operating Netback 62.69 57.53
(1) Funds flow from operations is cash flow from operating activities before changes in other non-cash working capital items. Funds flow from operations is not a measure recognized by GAAP. See "Non-GAAP Measures" in the MD&A.
(2) Working capital surplus includes current assets less current liabilities. Working capital surplus is not a measure recognized by GAAP. See "Non-GAAP Measures" in the MD&A.
(3) In periods where there were losses attributable to shareholders, all potentially dilutive securities were considered anti- dilutive and were therefore excluded from the fully diluted number of weighted average common shares outstanding calculation. All potentially dilutive securities were considered for the calculation of diluted number of shares outstanding at the end of period.
  • Increased average production (net after royalty) to 876 barrels of oil per day ("bopd"), an increase of 25% from the same period in 2011.

  • Operating netbacks were $62.69 for the quarter compared to $57.53 for the first quarter of 2011.

  • Began a six well appraisal and development program in the Cohembi field with the drilling of Cohembi 5 well which was completed and placed on production subsequent to quarter end with average production of 1,295 bopd day (189 bopd net to the Corporation) for the first 16 days of production prior to being shut-in for a pressure test.

  • Continued with the Cohembi appraisal program subsequent to quarter end by drilling the Cohembi 7 well which commenced drilling on April 28, 2012 and reached total depth of 9,543 feet (8,652 feet true vertical depth) on May 15, 2012. Cohembi 7 wells resulted in another successful well with 19 feet of very high quality oil pay in the Villeta N sand.

  • Began to move the drilling rig to the Cohembi 4 well pad, a newly constructed multi-well surface pad from which the Corporation intends to test the western extent of the pool.

  • Increased the Corporation's bank facility from $2.6 million to $6.7 million, with approximately $4.9 million of the total amount undrawn.

This press release contains forward-looking statements relating to the operational and exploration activities for the Corporation, evaluation of certain prospects in which the Corporation holds an interest and other statements that are not historical facts. 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, estimates, 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 and resource estimates; changes in environmental and other regulations; risks associated with oil and gas operations and future exploration activities; the risk that the conversion of the Corporation's 25% economic interest in the Alea 1947C Block into a full 25% undivided working interest in the Alea 1947C Block will not occur if the necessary approvals are not obtained; the risk that the conversion of the Corporation's 28% economic interest in the San Antonio Block into a full 28% undivided working interest in the San Antonio Block will not occur if the necessary approvals are not obtained; 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 the Corporation'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, the Corporation 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, the Corporation undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

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. The Corporation's common shares trade on the TSX Venture Exchange under the symbol "SRN".

Neither the TSX Venture Exchange nor its Regulation Service 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) 264-7455 (FAX)

    Suroco Energy Inc.
    Travis Doupe
    VP Finance and Chief Financial Officer
    (403) 232-6784
    (403) 264-7455 (FAX)