Suroco Energy Inc.

TSX VENTURE : SRN


Suroco Energy Inc.

November 27, 2012 19:30 ET

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

CALGARY, ALBERTA--(Marketwire - Nov. 27, 2012) -

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

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 September 30, 2012 on the System for Electronic Document Analysis and Retrieval ("SEDAR").

Copies of these documents can be found on the SEDAR website at www.sedar.com.

Alastair Hill, the Corporation's President and CEO commented, "During the third quarter we achieved a record average production rate of 1,111 barrels per day net to the Corporation after royalties and in September we experienced our best single monthly average with 1,232 barrels per day net to the Corporation after royalties. The three Cohembi wells drilled during the quarter helped us to delineate the north-western area of the field and extend the proven oil-bearing area."

Financial & Operating Highlights

(All references to $ are United States dollars unless otherwise noted)

3 months ended
September 30
9 months ended
September 30
2012 2011 2012 2011

Financial
Oil and gas revenue ($) 14,933,324 9,122,604 37,890,730 27,814,676
Funds flow from operations (1) ($) 5,482,962 2,569,672 14,874,826 8,781,239
Per share - basic ($) 0.04 0.02 0.12 0.07
Per share -diluted ($) 0.04 0.02 0.11 0.07
Net income (loss) ($) 2,774,577 (1,105,709 ) 7,756,243 (162,067 )
Net income (loss) attributable to shareholders ($) 1,298,849 (1,553,695 ) 3,557,912 (2,342,025 )
Per share - basic and diluted ($) 0.01 (0.01 ) 0.03 (0.02 )
Total assets ($) 73,761,702 53,713,914 73,761,702 53,713,914
Working capital surplus (2) ($) 7,671,110 7,115,051 7,671,110 7,115,051
Common shares outstanding, end of period
Basic 134,329,734 121,815,176 134,329,734 121,815,176
Diluted (3) 146,516,805 160,105,729 146,516,805 160,105,729
Weighted average common shares outstanding
Basic 134,090,401 121,931,743 128,771,045 121,404,295
Diluted (3) 138,709,956 121,931,743 133,468,937 121,404,295
Operational
Average daily net after royalty production (barrels of oil per day) 1,111 956 954 889
Average reference price - WTI ($ per barrel) 92.11 89.76 96.14 95.48
Operating Netback ($ per barrel)
Average realized price 104.52 90.07 103.59 89.65
Royalties 8.36 7.21 8.29 7.00
Production and transportation expenses 34.25 24.63 32.94 23.87
Operating Netback 61.91 58.23 62.37 58.78

Notes:

(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.

Highlights

  • Record quarterly production of 1,111 barrels of oil per day net to the Corporation after royalties compared to 873 barrels of oil per day for the second quarter of 2012 and 956 barrels of oil per day during the same quarter of 2011.

  • Placed Cohembi 4 well on permanent production on July 29, 2012 with average production of 761 barrels of oil per day (111 barrels of oil per day net to the Corporation after royalties) to the end of the quarter.

  • Placed Cohembi 8 well on permanent production on September 7, 2012 with average production of 92 barrels of oil per day (13 barrels of oil per day net to the Corporation after royalties) to the end of the quarter.

  • Placed Cohembi 11 well on production on August 9, 2012 with average production of 188 barrels of oil per day (27 barrels of oil per day net to the Corporation after royalties) to the end of the quarter.

  • Operating netbacks were $61.91 for the quarter compared to $58.23 for the third quarter of 2011.

  • Continued with the Cohembi appraisal program by beginning construction of the Cohembi 6 well pad on September 7, 2012.

Forward Looking Statements

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, including disruptions in production and transportation; 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)
    www.suroco.com