Suroco Energy Inc.
TSX VENTURE : SRN

Suroco Energy Inc.

November 26, 2012 06:00 ET

Suroco Provides Update of Cohembi Development Operations

CALGARY, ALBERTA--(Marketwire - Nov. 26, 2012) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Suroco Energy Inc. (TSX VENTURE:SRN) ("Suroco" or the "Corporation") is pleased to announce that the Cohembi-12 appraisal well has been successfully drilled and placed on production and drilling has now commenced from the same multi-well pad for the Cohembi-13 development location.

Mr. Alastair Hill, the Corporation's President and Chief Executive Officer commented, "We are very pleased to have the Cohembi-12 well on production. Based upon the short duration test, we expect the well to produce at rates in excess of 1,200 barrels of oil per day (175 barrels per day net to the Corporation after royalty). The other major advance with the Cohembi field development is the progress of the water injection facility where construction is nearing completion and we expect to commence water injection and pressure maintenance at the Cohembi-1 well in early December. This is a key step for the recognition of reserves under enhanced recovery in the proven category."

Cohembi-12 Well

The Cohembi-12 well was spudded on September 22, 2012 and drilled directionally to the west from the Cohembi-2 surface pad, approximately 940 meters from the nearest well location. Drilling operations were completed on November 9, 2012 and took longer than planned due to the failure of a major rig component that required operations to be temporarily suspended. Costs associated with this delay are being principally borne by the drilling contractor. Following the suspension, the well was successfully drilled to a total depth of 9,279 feet (8,647 feet true vertical depth), and encountered 12 feet of uniformly high quality net oil pay with approximately 27% porosity and no indication of an oil-water contact. The reservoir pressure confirmed continuity with the main Cohembi oil pool. Cohembi-12 has subsequently been cased and completed, and was tested briefly at a rate of approximately 1,200 barrels of oil per day (175 barrels per day net to the Corporation after royalty) prior to being put on permanent production through a 4-inch group production line with the existing Cohembi-2 oil well. Given the production capability of the Cohembi-12 well and the existing production from the Cohembi-2 well, which has averaged 1,248 barrels of oil per day (182 barrels per day net to the Corporation after royalty) in November, a larger capacity group pipeline will now be installed to facilitate high rates of production from the Cohembi-2 multi-well surface pad.

Operations Update

Service rig operations are underway for conversion of the Cohembi-1 oil well to water injection for pressure maintenance. Injectivity testing conducted on November 20 confirmed that the target injection rate of 4,000 barrels of water per day will be achievable. Construction of injection facilities including six 500-barrel water storage tanks and dual injection pumps is underway, and injection is expected to commence at Cohembi-1 in early December of 2012.

The drilling rig spudded the Cohembi-13 well on November 22 from the same Cohembi-2 surface pad. The well will be drilled directionally, approximately 1 kilometer south of the Cohembi-2 bottomhole location. Subsequent to the completion of Cohembi-13, the rig will move to the Cohembi-6 pad to delineate the southern area of the Cohembi field with three wells.

Further details explaining the Corporation's activities and 2012 drilling program are contained in a presentation 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 the operational and exploration activities for Suroco, the evaluation of certain prospects in which the Corporation holds an interest, estimated number of drilling locations, expected capital program (including its allocation), production rates, production growth, facility construction and completion times 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.

Readers should also note that even if the 2012 drilling program as proposed by Suroco is successful, there are many factors that could result in production levels being less than anticipated or targeted, including without limitation, greater than anticipated declines in existing production due to poor reservoir performance, mechanical failures or inability to access production facilities, among other factors.

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.

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