CALGARY, ALBERTA--(Marketwire - Sept. 10, 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-8 appraisal well in the Suroriente Block has been placed on production. The Corporation also announces an average monthly production rate of 1,117 barrels of oil per day net after royalty in August.
Mr. Alastair Hill, the Corporation's President and Chief Executive Officer commented, "Cohembi-8 is the fifth successful well we have brought on stream this year, maintaining a 100% success rate. Through this drilling we have extended the proven oil-bearing area and have confirmed a vertical oil column in excess of 150 feet, with no oil-water contact encountered.
Prior to Cohembi-8 coming on stream, crude oil production has averaged 1,117 barrels of oil per day net to the Corporation after royalty in August and 987 barrels per day in July. Importantly we have been able to add several new sales points in the Upper Magdalena area, which reduces our reliance on the Trans-Andean ("OTA") pipeline, which has seen numerous disruptions this year. At the present time we have the ability to sell approximately half of the crude volume from the Suroriente Block on pipelines outside of the Putumayo Basin."
The Cohembi-8 well is the third successful well drilled from this surface pad and drilling will now focus on the central and southern areas of the Cohembi accumulation where at least five wells are planned. The Cohembi-8 well was spudded on August 12, 2012 and drilled directionally to the southeast from the Cohembi-4 surface pad. The Cohembi-8 well reached a total depth of 9,390 feet (8,696 feet true vertical depth), and encountered 13 feet of oil pay with no indication of an oil-water contact. The well has recently been completed and has commenced production at lower than expected rates, fluctuating around an average of approximately 150 barrels of oil per day (22 barrels of oil per day net to the Corporation after royalty). Further testing and analysis is underway to determine whether the well productivity can be improved through a workover or well stimulation treatment.
The drilling rig will now move to the Cohembi-2 multi-well pad, where two wells will be drilled in order to fully develop the area around the Cohembi-1 well, which is scheduled for conversion to water injection in October of 2012, thereby commencing the first stage of what will ultimately become a field-wide pressure maintenance scheme. This scheme is intended to increase and optimize the amount of oil which can be recovered from the original oil in place. Modeling and simulation results indicate that a recovery factor of 25-40% can be expected with a successful pressure maintenance scheme. Later this year the rig will commence drilling southern area delineation wells from the planned multi-well pad at Cohembi-6.
For the month of August production from the Suroriente Block has averaged 1,117 barrels per day net to the Corporation after royalty and 987 barrels per day net to the Corporation after royalty for the month of July. The Corporation has not been affected by production disruptions since mid-August, due to the arrangement of alternative shipping routes to the OTA pipeline and a reduction in OTA pipeline disruptions. For the ten days of production prior to the start-up of the Cohembi-8 well, Suroriente Block production averaged 1,243 barrels of oil per day net to the Corporation after royalty.
Further details explaining the Corporation's activities and 2012 drilling program are contained in an updated 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.
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 growth, the ability of the Corporation to sell its crude volume 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 transportation 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.