Suroco Energy Inc.
TSX VENTURE : SRN

Suroco Energy Inc.

September 22, 2011 18:07 ET

Suroco Energy Inc. Increases Its Interest in the Alea 1947C Exploration Block in Colombia to 49.5%

CALGARY, ALBERTA--(Marketwire - Sept. 22, 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 it has entered into an agreement to acquire an additional 25% interest in the Alea 1947C Block (the "Block") in Colombia from Vetra Exploracion & Produccion Colombia SA ("Vetra"). Upon approval by the Agencia Nacional de Hidrocarburos of Colombia, the 25% economic interest in the Block acquired from Vetra will convert into a full 25% undivided working interest in the Block.

Mr. Alastair Hill, the Corporation's President and Chief Executive Officer commented, "Increasing our interest in the Alea 1947C Block to 49.5% is important as this Block contains the largest exploration prospect in our portfolio. The Block itself straddles an important structural trend along which several producing oilfields are located. There is only one well in the Block, which was drilled as a stratigraphic test in 1968 prior to any seismic; however, the well is important because it proves the existence of migrated hydrocarbons and the presence of multiple reservoirs. At this time we are anticipating that the first exploration well will be drilled in the Block in mid 2012."

The Corporation has acquired the 25% interest in the Block in exchange for: (a) the payment to Vetra of approximately US$1.04 million, representing 25% of the back costs incurred to date on the Block; (b) the agreement by Suroco to fund the equivalent of 33.33% of the dry-hole costs of Vetra for the first exploration well drilled on the Block, and (c) the waiver by Suroco of certain rights of first refusal it has with Vetra to acquire additional interests in the Alea 1947C Block and Alea 1848A Block.

Through its subsidiaries, the Corporation also holds an indirect participation of approximately 24.5% in the Block, which combined with the interest in the Block acquired by the Corporation as announced herein, will total a 49.5% interest in the Block for the Corporation. The Block has a total area of approximately 23,500 hectares and is located northeast of the Suroriente Block in Colombia. Further information on the Block may be found on the Corporation's website at: www.suroco.com.

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.

Forward-Looking Statements

This press release contains forward-looking statements relating to 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 risk that the conversion of the Corporation's 25% economic interest in the Block into a full 25% undivided working interest in the Block will not occur if the necessary approvals are not obtained; the state of the economy in general and capital markets in particular; and the assumptions, risks and uncertainties related to operational and future exploration activities.

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.

The TSX Venture Exchange has in no way passed on the merits of the acquisition of the interest in the Block by the Corporation and has neither approved nor disapproved the contents of the 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.

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