Suroco Energy Inc. Announces Filing of First Quarter Financial Statements and MD&A

Marketwired

CALGARY, ALBERTA--(Marketwired - May 27, 2013) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Suroco Energy Inc. (TSX VENTURE:SRN) (the "Corporation") is pleased to announce that it has filed its First Quarter Financial Statements and the related Management's Discussion and Analysis ("MD&A") for the period ended March 31, 2013 on the System for Electronic Document Analysis and Retrieval ("SEDAR").

Copies of these documents can be found on the SEDAR website at www.sedar.com.

Alastair Hill, the Corporation's President and CEO commented, "Suroco has started the year in excellent fashion by reporting record results for the first quarter, with increased oil production, record funds flow and high quality netback metrics above $60 per barrel. This is also the first quarter in which we are reporting our results based upon net working interest ownership. During the quarter we drilled two successful Cohembi wells, one of which encountered the thickest oil pay interval found to date in the entire field, with both these wells being placed on production in late April. Aside from these high quality operating results, we also closed a $21 million credit facility, which will allow us to pursue targeted new business opportunities in our focus area in the Putumayo Basin.

Since the end of the quarter, production has continued to grow progressively, to an average of 1,637 barrels of oil per day net to the Corporation after royalty for the month of April and the first 22 days of May, supporting our expectations for continuing high quality results in the second quarter."

Financial & Operating Highlights
(All references to $are United States dollars unless otherwise noted)
 
  3 months ended March 31  
  2013   2012  
      (Restated) (3 )
   
Financial        
Oil and gas revenue ($) 9,986,286   8,400,277  
Funds flow from operations (1) ($) 4,090,548   3,106,765  
  Per share - Basic ($) 0.03   0.03  
  Per share - Diluted ($) 0.03   0.02  
Net (loss) income ($) (510,167 ) 712,762  
  Per share - basic and diluted ($) (0.00 ) 0.01  
Adjusted net income ($) (1) 1,283,850   712,762  
  Per share - basic ($) 0.01   0.01  
Total assets ($) 76,083,855   52,068,901  
Working capital surplus (1) ($) 16,536,983   6,898,624  
Common shares outstanding, end of period        
  Basic 134,329,734   124,469,734  
  Fully Diluted 152,976,190   162,397,469  
Weighted average common shares outstanding        
  Basic 134,329,734   124,120,618  
  Diluted (2) 134,329,734   129,853,800  
   
Operational        
Average daily net after royalty production (bopd) 1,207   876  
Average reference price - WTI ($ per barrel) 94.33   102.88  
Operating Netback ($ per barrel)        
  Average realized price 97.00   105.18  
  Royalties 7.76   8.41  
  Production and transportation expenses 28.07   34.08  
  Operating Netback 61.17   62.68  
 
Notes:
  1. Non-GAAP financial measure; see discussion in Reconciliation of Non-GAAP Items section of the Q1 2013 MD&A.
  2. In periods where there were losses attributable to shareholders, all potentially dilutive securities were considered anti- dilutive and were therefore excluded from the fully diluted number of weighted average common shares outstanding calculation. All potentially dilutive securities were considered for the calculation of diluted number of shares outstanding at the end of period.
  3. Prior amounts have been restated due to the adoption of IFRS 10 and IFRS 11. See Note 2 of the Corporation's First Quarter Financial Statements for details.
Highlights for the period
  • Financial results are, for the first time, reported on a net working interest basis.
  • Achieved record quarterly production of 1,207 barrels of oil per day net to the Corporation after royalties compared to 876 barrels of oil per day for the same quarter of 2012 and 1,101 barrels of oil per day for the fourth quarter of 2012.
  • Achieved field operating netbacks of $61.17 per barrel for the quarter.
  • Closed a three year, $21 million senior secured credit facility with Macquarie Bank Limited.
  • Drilled the Cohembi-6 and Cohembi-9 wells during the quarter and placed both wells on production subsequent to the quarter end.
  • Adjusted net income of $1,283,850 for the quarter, compared to $712,762 in the first quarter of 2012.
  • Announced increased reserves in all categories for the year ended December 31, 2012.

Forward-Looking Statements

This press release contains forward-looking statements relating to the operational and exploration activities for the Corporation, evaluation of certain prospects in which the Corporation holds an interest 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 the Corporation'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, the Corporation 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, the Corporation undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

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.

Contact:
Suroco Energy Inc.
Alastair Hill
President and Chief Executive Officer
(403) 232-6747
(403) 232-6784

Suroco Energy Inc.
Travis Doupe
VP Finance and Chief Financial Officer
(403) 232-6747
(403) 232-6784
www.suroco.com

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