CALGARY, ALBERTA--(Marketwired - Jul 22, 2013) -
NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Suroco Energy Inc. (TSX VENTURE:SRN) ("Suroco" or the "Corporation") is pleased to announce the continuation of growth in production volumes from the Suroriente Block leading to record quarterly production for the Corporation of 1,819 barrels of oil per day net to the Corporation before royalty (1,670 barrels of oil per day net to the Corporation after royalty), representing approximately a 38% increase in net after royalty production versus the Corporations' production in the first quarter of 2013.
Suroriente Block Operational Update
The Corporation achieved record production from the Suroriente Block for the second quarter of 2013, at 1,819 barrels of oil per day net to the Corporation before royalty (1,670 barrels of oil per day net to the Corporation after royalty). The increase was primarily due to the ramping up of production from four wells producing from the Cohembi-6 multi-well pad in the southern area of the field.
Drilling operations for the Cohembi-14 well were completed in early June, and the well was placed on permanent production into the Cohembi central production facility on June 6, 2013. Gross oil production from Cohembi-14 averaged 1,142 barrels of oil per day (166 barrels of oil per day net to the Corporation after royalty) with zero percent watercut for the remainder of the month. The successful drilling of Cohembi-14 marked a significant technical achievement for deviated drilling capability within the field. The well was deviated a lateral distance of 2,077 meters from the Cohembi-6 surface pad, which is 65% further than any previously drilled Cohembi wells.
The Cohembi-15 well was spudded on June 8, and was directionally drilled 1,356 meters north-west from the Cohembi-6 surface pad in late June. The well encountered the second highest amount of Villeta N net pay in the Cohembi field to date at 28 feet of high quality net pay. The Cohembi-15 well was placed on production on July 9, and was gradually ramped up to a gross stabilized oil rate of approximately 1,200 barrels of oil per day (175 barrels of oil per day net to the Corporation after royalty) with zero percent watercut.
2013 Drilling Program Update
The drilling rig is now moving to the Pinuna-7 stepout location, which will be directionally drilled approximately 1500 meters south-west from the existing Pinuna-4 multi-well surface pad. This well will evaluate Villeta sand oil potential on the western flank of the Pinuna-Quillacinga oilfield.
Following Pinuna-7, the rig will drill the Quinde-2 stepout location in the west central area of the Suroriente Block. This well will be directionally drilled approximately 340 meters north from the Quinde-1 multi-well pad, with multiple reservoir targets in the Villeta formation.
Success with either of these locations could result in a follow-up drilling location, or the rig may return to Cohembi to continue drilling development locations late in 2013.
Cohembi Water Injection & Pressure Maintenance Program
Water injection for pressure maintenance at the Cohembi-1 well has been continuous since December 2012, averaging approximately 3,900 barrels of water per day for the first half of 2013. The high volume of oil production from the area of the Cohembi-6 pad has resulted in a requirement for more water injection in that area to maintain reservoir pressure and oil production rates into 2014. Regulatory approval has been obtained to convert the Cohembi-6 well to water injection, with a target date for commencement of water injection of October 1, 2013. The injection facility will be designed to inject 7,000 barrels of water per day into the Cohembi-6 well and balance reservoir withdrawals in the southern half of the Cohembi field. The Corporation is continuing to evaluate alternate full-development scenarios with updated reservoir simulation studies and an ongoing polymer core flood study. Approval of an application to amend the Suroriente Environmental License is expected late in 2013, which will allow additional drilling and facility construction that will move Cohembi towards full field development during 2014.
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. Further details of the Corporation's activities are contained in an updated presentation to be available shortly on the Corporation's website. 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, estimated timing of drilling of wells, expected capital program (including its allocation), production growth, reserves 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 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 2013 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.
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President and Chief Executive Officer
Suroco Energy Inc.
VP Finance and Chief Financial Officer