Suroco Energy Inc.
TSX VENTURE : SRN

Suroco Energy Inc.

May 13, 2014 06:00 ET

Suroco Energy Inc. Concludes Drilling Activities at the Canelo Sur-2 Well, Putumayo 2 Block

CALGARY, ALBERTA--(Marketwired - May 13, 2014) - Suroco Energy Inc. (TSX VENTURE:SRN) ("Suroco" or the "Corporation") wishes to provide an update of drilling and testing operations at the Canelo Sur-2 well in the Putumayo 2 Block.

Conclusion of Drilling Activities - Canelo Sur 2 Exploration Well, Putumayo 2 Block

Further to the Corporation's press release of May 7, 2014, testing operations at the Canelo Sur-2 exploration well have now been concluded. A 7-inch liner was run and cemented in the open-hole section of the well, and based on interpreted potential oil pay indicated by oil shows during drilling and open hole and cased hole well log information, a 44 foot interval in the Villeta Lower 'U' sand was completed and tested. Production testing with a hydraulic pump yielded primarily formation water with some intermittent volumes of oil, (recorded as up to 3% of the total fluid rate) over approximately 48 hours of evaluation. Based on the testing results, the Canelo Sur-2 well will be abandoned and the rig will be released in the near future.

Numerous technical difficulties were encountered during the drilling, completion and testing of the well which have resulted in a number of uncertainties regarding:

  • reliability of open-hole and cased log interpretation;
  • effectiveness of zonal isolation (cement distribution and bonding to casing and formation);
  • possible formation damage due to substantial invasion of overbalanced drilling fluid; and
  • potential for erroneous flow results due to crossflow between zones.

The Canelo Sur-2 well was the first well drilled in the Putumayo 2 Block (the "Block") and, in conjunction with the seismic programs previously acquired, has fulfilled the contractual commitment for Phase I of the exploration and production contract for the Block. The Corporation is undertaking a full evaluation of the data collected during the drilling of the well and will integrate this new information with its ongoing evaluation of the multiple exploration drilling leads remaining in the Block, which includes seismic anomalies observed at the Villeta 'N' sand level, as well as other mapped structural closures along the Canelo-Nogal and Cedrillo trends.

The Corporation holds a 25% economic interest in the Block, which is located in Colombia's Putumayo Basin. Application has been made to the Agencia Nacional de Hidrocarburos of Colombia for its approval of the conversion of Suroco's 25% economic interest to a full 25% undivided working interest in the Block.

General

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.

The Corporation has entered into an agreement with Petroamerica Oil Corp. ("Petroamerica") to sell all of the Corporation's issued and outstanding common shares to Petroamerica (see the Corporation's April 28, 2014 news release).

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

Forward-Looking Statements

Certain statements included in this press release constitute forward-looking statements under applicable securities legislation. These statements relate to future events or future performance of the Corporation. All statements other than statements of historical fact are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. Forward-looking statements or information in this press release include, but are not limited to, the evaluation of certain prospects in which Suroco holds an interest, business strategy, priorities and plans, expected production, estimated number of drilling locations, expected capital program (including its allocation), production growth, reserves growth, the receipt of and the timing of receipt of environmental licenses, the ability to sell crude volume and other statements, expectations, beliefs, goals, objectives assumptions and information about possible future events, conditions, results of operations or performance, expected capital program (including its allocation), 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 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; 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. New factors emerge from time to time, and it is not possible for management of the Corporation to predict all of these factors and to assess in advance the impact of each such factor on the Corporation's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement or information. The forward-looking statements contained herein are expressly qualified by this cautionary statement. Moreover, neither the Corporation nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction with Petroamerica and has neither approved nor disapproved the contents of this press release.

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.

(Not for dissemination in the United States of America)

Contact Information

  • Alastair Hill
    President and Chief Executive Officer
    Telephone: (403) 232-6784
    Facsimile: (403) 232-6747

    Travis Doupe
    VP Finance and Chief Financial Officer
    Telephone: (403) 232-6784
    Facsimile: (403) 232-6747
    www.suroco.com