CALGARY, ALBERTA--(Marketwired - May 8, 2013) -
NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
Suroco Energy Inc. (TSX VENTURE:SRN) ("Suroco" or the "Corporation") is pleased to announce commencement of production from recently drilled wells at the Cohembi-6 multi-well pad and the spudding of the Cohembi-14 well.
Mr. Alastair Hill, the Corporation's President and Chief Executive Officer commented, "The results of the first three wells drilled from the Cohembi-6 pad have exceeded our expectations for reserve potential in the southern sector of the Cohembi field. The commencement of production from this pad will provide a major enhancement to oil productivity and sales for the second quarter of 2013 and beyond. We plan two additional locations from this pad, the first of which is positioned to further delineate the thickest sand encountered to date in the Cohembi field".
Cohembi Drilling Update
The Cohembi-9 well was spudded on February 20, 2013 and directionally drilled to a total measured depth of 9,720 feet, approximately 1.2 kilometers south of the Cohembi-6 well (see the Corporation's February 25, 2013 press release). It encountered 35 feet of high quality net oil pay, the thickest net pay encountered in the Cohembi field to date. After completing and equipping Cohembi-9 for production with an electric submersible pump, the rig then spud the Cohembi-10 well from the same Cohembi-6 surface pad on April 1, 2013. The Cohembi-10 well was directionally drilled approximately 950 meters west of the Cohembi-6 well to a total measured depth of 9343 feet and encountered 14 feet of high quality oil pay. The Cohembi-10 well was completed and equipped to pump, and the rig then spud the Cohembi-14 well from the same surface pad on May 4, 2013. This well will be directionally drilled to a location approximately 2 kilometers south-west of the Cohembi-6 well, and based on seismic mapping, is expected to further delineate the thick sand trend encountered at the Cohembi-9 well. Following the Cohembi-14 well, it is expected that the Cohembi-15 well will be directionally drilled from the same pad, to a location approximately 1200 meters north-west of the Cohembi-6 well. No indication of an oil-water contact was observed in either the Cohembi-9 or Cohembi-10 wells, and initial reservoir pressures measured in each well demonstrate good connectivity with the main Cohembi oil pool. Due to the ongoing drilling operations at the Cohembi-6 pad, stabilized testing of the wells was deferred until the completion of flowlines connecting the pad with the Cohembi central production facility.
Suroriente Block Production Update
Since April 23rd, when the Cohembi-6 and Cohembi-9 wells commenced production, record oil production rates have been achieved. Average production from Suroriente for the full month of April was 10,643 bopd (1,550 bopd net to the corporation after royalty) with production in the last 7 of days of April averaging 12,089 bopd (1,761 bopd net to the corporation after royalty). During the last seven days of April, Cohembi-6 produced at an average rate of 1,096 bopd at zero percent watercut (160 bopd net to the Corporation after royalty) and Cohembi 9 produced at an average rate of 1,164 bopd at zero percent watercut (170 bopd net to the Corporation after royalty). As of May 7, the Cohembi-10 well has not commenced continuous production due to Trans-Andean Pipeline (OTA) disruptions that are considered by the Corporation to be temporary. Despite these disruptions, production from the Suroriente Block has averaged 11,136 bopd (1,622 bopd net to the Corporation after royalty) over the first six days of May through the use of alternate transportation arrangements. The Cohembi-10 well was produced by electric submersible pump to the drilling rig tank for a 12-hour period on April 27, 2013 to validate inflow, and based on that test, the Corporation expects the well to produce at approximately 800 to 1000 bopd under unrestricted oil evacuation conditions. The Cohembi-6 pad wells are currently being operated at relatively low pump frequency and will be gradually ramped up as operational and transportation conditions permit.
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, 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.