Suroco Energy Inc.
TSX VENTURE : SRN

Suroco Energy Inc.

November 25, 2013 06:00 ET

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

CALGARY, ALBERTA--(Marketwired - Nov. 25, 2013) -

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 Third Quarter Financial Statements and the related Management's Discussion and Analysis ("MD&A") for the period ended September 30, 2013 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 this quarter the Corporation completed a farmin to acquire a 25% interest in the PUT 2 Block in Putumayo where, within a three month timespan from entry, we commenced drilling the first exploration well which is currently operating. Also during the quarter we completed the documentation to formalize our participation in the OCP Pipeline Consortium, which provides us with access to an alternate evacuation route for some of our production via pipeline to Ecuador during periods when the OTA (the Trans-Andean pipeline) is unavailable. The transportation cost for using this route is significantly lower than the trucking and tariff cost for our oil that is evacuated via the Colombian pipelines that run to the Caribbean coast.

Overall production volumes were impacted during the third quarter due to the widespread strikes in Colombia which occurred during August and September, without which we would have recorded our best ever quarterly production. As it was we lost 26 days of production, however we did average 1,921 barrels per day net after royalty for the days that we were actually on production during the quarter."

Financial & Operating Highlights
(All references to $ are United States dollars unless otherwise noted)
3 months ended
September 30
9 months ended
September 30
2013 2012 2013 2012
(Restated)(3) (Restated)(3)

Financial
Oil and gas revenue ($) 12,869,006 10,214,801 35,813,533 25,968,920
Funds flow from operations (1) ($) 3,531,016 3,249,396 11,570,521 8,843,213
Per share - basic ($) 0.03 0.02 0.09 0.07
Per share - diluted ($) 0.03 0.02 0.08 0.07
Net income ($) 7,045 1,298,849 1,003,641 3,557,912
Per share - basic and diluted ($) 0.00 0.01 0.01 0.03
Adjusted net income (1) ($) 940,339 1,298,849 2,498,278 3,557,912
Per share - basic and diluted($) 0.01 0.01 0.02 0.03
Total assets ($) 78,328,811 57,911,630 78,328,811 57,911,630
Working capital surplus (1) ($) 5,943,812 6,766,128 5,943,812 6,766,128
Common shares outstanding, end of period
Basic 134,329,734 134,329,734 134,329,734 134,329,734
Fully Diluted 151,839,734 146,516,805 151,839,734 146,516,805
Weighted average common shares outstanding
Basic 134,329,734 134,090,401 134,329,734 128,771,045
Diluted (2) 138,924,463 138,709,956 139,445,996 133,468,937
Operational
Average daily net after royalty production (bopd) 1,378 1,111 1,419 954
Average reference price - WTI ($ per barrel) 105.84 92.11 98.09 96.14
Operating Netback ($ per barrel)
Average realized price (4) 93.78 105.65 91.29 104.92
Royalties 7.62 8.45 7.40 8.39
Production and transportation expenses (4) 30.51 35.29 28.35 34.16
Operating Netback 55.65 61.91 55.54 62.37
Notes:
  1. Non-GAAP financial measure; see discussion in "Reconciliation of Non-GAAP Items" section of the MD&A.
  2. 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.
  3. Refer to Note 2 in the September 30, 2013 Interim Consolidated Condensed Financial Statements and to "Accounting Policies and Estimates" in the MD&A for an explanation of the restatement.
  4. Refer to explanation under "Selling Prices in the Financial Review" portion of the MD&A for an explanation of average realized selling prices and production and transportation expense.

Highlights for Q3, 2013

  • The Corporation acquired a 25% economic interest in the Putumayo 2 Block which will convert to an undivided 25% working interest upon acceptance of the transaction by the ANH in Colombia. Drilling of the first exploration well on the block commenced in October.
  • Achieved field operating netbacks of $55.65 per barrel for the quarter.
  • Placed Cohembi-15 on production on July 9, 2013, which was drilled in June 2013 and averaged 1,200 barrels of oil per day (175 barrels of oil per day net to the Corporation after royalties).
  • Drilled Pinuna-7 well which encountered ten feet of net oil pay and which will be tested when a service rig is available and mobilized.
  • Cash flow from operations of $3.5 million ($0.03 per share on a basic and fully diluted basis).

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; changes in environmental and other regulations; risks associated with oil and gas operations and future exploration activities; the availability of service rigs and related equipment, the need to obtain required approvals from regulatory authorities; product supply and demand; market competition; political and economic conditions in the country in which the Corporation operates; the risk that the conversion of the Corporation's 25% economic interest in the Putumayo-2 Block into a full 25% undivided working interest in the Putumayo-2 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.

For further information please visit our website at www.suroco.com.

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 (FAX)

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