CALGARY, ALBERTA--(Marketwire - July 12, 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-4 appraisal well was tested with an initial rate of 1706 barrels of oil per day (249 barrels of oil per day net to the Corporation after royalty). The Corporation also confirms the exercise of 13,285,000 common share purchase warrants (the "Warrants").
The Cohembi-4 well was tested into lease tanks with a variable speed electric submersible pump on July 10, 2012. The well was pumped for 14 hours, then was shut in for a pressure build up test to obtain an accurate initial reservoir pressure. The rate during the final three hours was equivalent to 1706 barrels of oil per day (249 barrels of oil per day net to the Corporation after royalty) with a declining watercut of 5%. The Corporation interprets the initial water production to be recovery of workover fluid or filtrate used during drilling and completion operations. A flowline to the Cohembi producing facility is expected to be in place within the next few weeks to allow continuous production from Cohembi-4. The drilling rig is now being moved to spud the Cohembi-11 well from the same Cohembi-4 surface pad, with a targeted bottomhole location approximately 1.2 kilometers west of Cohembi-4.
Further details explaining the Corporation's activities in the Cohembi field and its 2012 drilling program are contained in a presentation on the Corporation's website at www.suroco.com.
Exercise of Warrants
As announced in Suroco's press release of July 9, 2009, the Corporation had completed a private placement of equity units, which equity units were comprised of common shares and Warrants. The Warrants had an exercise price of $0.35 per share and expired on July 9, 2012. The Corporation is pleased to announce that 13,285,000 Warrants have been exercised for total proceeds of $4,649,750, with 10,260,000 of such Warrants being exercised during 2012.
The Corporation's 2012 capital program is expected to be funded from internally generated cashflow and existing working capital. In addition to the recent exercise of the warrants, the Corporation has an unused bank facility of approximately US$4.7 million with a Colombian bank.
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, 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.