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

Marketwired

CALGARY, ALBERTA--(Marketwired - Aug. 22, 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 Second Quarter Financial Statements and the related Management's Discussion and Analysis ("MD&A") for the period ended June 30, 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, "We continued to grow our daily production through the second quarter with an average of 1,670 barrels per day net to the Corporation after royalty as four Cohembi wells were brought on production. The last well in this current program is the Cohembi-15 well, which commenced production in early July. Subsequent to the quarter end the drilling rig was moved to the Pinuna-7 location to drill an outpost well and drilling operations are expected to be completed there at the end of August. Due to pipeline maintenance in the Middle Magdalena valley during the second quarter we have used a temporary alternative sales point which, due to the nature of the sales contract, has had the effect of reducing our average sales prices whilst also lowering our average operating cost on a per barrel basis."

Financial & Operating Highlights

(All references to $ are United States dollars unless otherwise noted)

  3 months ended June 30 6 months ended June 30
  2013 2012 2013 2012
    (Restated)(3)   (Restated)(3)
         
Financial        
Oil and gas revenue ($) 12,958,241 7,353,842 22,944,527 15,754,119
Funds flow from operations (1) ($) 3,948,957 2,487,052 8,039,505 5,593,817
  Per share - basic and diluted ($) 0.03 0.02 0.06 0.04
Net income ($) 1,506,763 1,546,301 996,596 2,259,063
  Per share - basic and diluted ($) 0.01 0.01 0.01 0.02
Adjusted net income (1) ($) 274,089 1,546,301 1,557,939 2,259,063
  Per share - basic and diluted($) - 0.01 0.01 0.02
Total assets ($) 77,631,019 51,788,184 77,631,019 51,788,184
Working capital surplus (1) ($) 16,824,940 7,564,404 16,824,940 7,564,404
Common shares outstanding, end of period        
  Basic 134,329,734 130,109,734 134,329,734 130,109,734
  Fully Diluted 152,656,190 162,276,805 152,656,190 162,276,805
Weighted average common shares outstanding        
  Basic 134,329,734 127,963,290 134,329,734 126,044,203
  Diluted (2) 139,845,879 136,113,390 139,740,644 132,830,319
         
Operational        
Average daily net after royalty production (bopd) 1,670 873 1,439 875
Average reference price - WTI ($ per barrel) 94.10 93.43 94.22 98.16
Operating Netback ($ per barrel)        
  Average realized price (4) 85.20 103.62 89.96 104.45
  Royalties 6.96 8.29 7.28 8.36
  Production and transportation expenses (4) 26.60 32.69 27.19 33.43
  Operating Netback 51.64 62.64 55.49 62.66

Notes:

  1. Non-GAAP financial measure; see discussion in Reconciliation of Non-GAAP Items section Q2 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. Refer to Note 2 in the June 30, 2013 Interim Consolidated Condensed Financial Statements and to "Accounting Policies and Estimates" in the MD&A for an explanation of the restatement.
  4. Refer to explanation under "Selling Prices in the Financial Review portion of the MD&A for an explanation of average realized selling prices and production and transportation expense.

Highlights for the period

  • Achieved record quarterly production of 1,670 barrels of oil per day net to the Corporation after royalties compared to 873 barrels of oil per day for the same quarter of 2012 and 1,207 barrels of oil per day for the first quarter of 2013.
  • Achieved realized selling prices for the quarter of $85.20 which was lower than in previous quarters since a significant portion of the sales for the quarter were at prices which were net of trucking, pipeline and handling costs.
  • Achieved field operating netbacks of $51.64 per barrel for the quarter.
  • Placed Cohembi-6 and Cohembi-9 on production on April 23, 2013, both of which were drilled in the first quarter of 2013 and averaged 1,373 barrels of oil per day (200 barrels of oil per day net to the Corporation after royalties) and 1,116 barrels of oil per day (163 barrels of oil per day net to the Corporation after royalties), respectively for the remainder of the quarter.
  • Drilled the Cohembi-10 and Cohembi-14 wells during the quarter and placed both production on May 16, 2013 and June 6, 2013, respectively, after which they had average production of 717 barrels of oil per day (104 barrels of oil per day net to the Corporation after royalties) and 1,142 barrels of oil per day (166 barrels of oil per day net to the Corporation after royalties), respectively for the remainder of the quarter.
  • Cash flow from operations of $3.9 million ($0.03 per share on a basic and fully diluted basis).

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.

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:
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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