/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, Nov. 26 /CNW/ - Suroco Energy Inc. (TSX Venture Exchange: SRN)
(the "Corporation") is pleased to announce that it has acquired a 25%
participating interest in the Buganviles Block comprising 150,000 acres in the
Upper Magdalena Basin in Colombia. The Corporation acquired this interest
pursuant to an agreement (the "Agreement") dated effective November 19, 2007
whereby the Corporation was assigned a 25% participating interest in the
Buganviles Association Contract dated September 18, 2000 (the "Association
Contract"). In exchange for that assignment of the interest in the Association
Contract, the Corporation has agreed to pay US$1,500,000 for exclusive use
towards drilling and completing the Delta-1 exploratory well in the Buganviles
Block (as described below in greater detail).
The Buganviles Block comprises 150,000 acres in the Upper Magdalena Basin
in Colombia. Oil was discovered in the Upper Magdalena Basin in the 1950's and
in 1957 a producing well (Gualanday-3) tested 800 boe per day of 36 degrees
The Delta-1 exploratory well is located "up-dip" of the Gualanday-3 well
and is expected to cost US$4,300,000 to drill and complete. Drilling of the
Delta-1 exploratory well is expected to commence the first week of December
2007, targeting primarily the Tetuan-Carballos Formation at a depth of 7,600
The interest in the Association Contract is held in trust for the
Corporation and NCT Corporacion Petrolera Latinoamericana, S.L. ("NCT")
pending the approval by ECOPETROL S.A. and the National Hydrocarbons Agency of
Colombia of the assignment of the interest in the Association Contract. The
Corporation and NCT have also entered into an agreement whereby NCT agrees to
hold any rights it has in the interest in the Association Contract in trust
for the Corporation and further agrees, at the election of the Corporation and
for no additional consideration, to transfer and register into the name of the
Corporation the interest in the Association Contract or any rights it has in
the interest in the Association Contract.
As disclosed, the Corporation has agreed to pay consideration of
US$1,500,000 for the assignment of the interest in the Association Contract.
The Corporation has paid US$1,125,000 towards the drilling and completing of
the Delta-1 exploratory well and will pay US$375,000 when testing of that well
commences. If the Delta-1 exploratory well is unsuccessful, the Corporation
will not be required to pay the US$375,000 installment.
Pursuant to the Association Contract, ECOPETROL S.A. is entitled to
acquire a 30% participation in any producing well by reimbursing 30% of the
total costs for such well. If the Delta-1 well is a producing well and
ECOPETROL S.A. chooses to participate in such well, the Corporation will be
entitled to its portion of the reimbursed costs as they relate to the Delta-1
References herein to "boe" mean barrels of oil equivalent derived by
converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to
one barrel (bbl) of oil. Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy
conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead.
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 Western Canada. The Corporation's common shares trade on the
TSX Venture Exchange under the symbol SRN.
The TSX Venture Exchange has in no way passed on the merits of the
proposed transaction and has neither approved nor disapproved the contents of
the press release. Trading in the securities of the Corporation should be
considered highly speculative.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this press release.
For further information:
For further information: Jeffrey Scott, President and Chief Executive
Officer of the Corporation, Telephone: (403) 232-6252, Facsimile: (403)