Suroco Energy Inc. announces amended agreement to acquire interests in oil and gas properties in Colombia



    /NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/

    CALGARY, July 21 /CNW/ - Suroco Energy Inc. (TSX Venture Exchange: SRN)
("Suroco" or the "Corporation") is pleased to announce that it has entered
into a letter agreement (the "Letter Agreement") dated effective July 17,
2008, for the arm's length acquisition (the "Proposed Transaction") of
interest in the Suroriente Block, Arjona Field, Alea 1947 C Block and Alea
1848 A Block in Colombia (the "Acquired Interests") currently held by Alentar
Holdings Inc. ("Alentar"), in exchange for 8,700,000 common shares in the
capital of the Corporation at a deemed price of US$1.00 per share and
4,000,000 Contingent Value Rights. Upon completion of the Proposed
Transaction, the Acquired Interests will be held by the Corporation's wholly
owned subsidiary, NCT Corporacion Petrolera Latinoamericana S.L. ("NCT"). The
Letter Agreement effectively amends and replaces the December 28, 2007
agreement entered into between the Corporation and Alentar for the acquisition
by the Corporation of Alentar's interests in the Suroriente Block and Arjona
Field in Colombia.
    The Contingent Value Rights to be issued to Alentar upon completion of
the Proposed Transaction will entitle Alentar to acquire one common share of
Suroco for each Contingent Value Right deemed exercised. The Contingent Value
Rights will contain terms such that 1,000,000 Contingent Value Rights will be
deemed exercised upon the occurrence of a "Declaration of Commerciality" in
either the Alea 1848 A Block or the Alea 1947 C Block, subject to a maximum of
two Declarations of Commerciality per the Alea 1848 A Block and two
Declarations of Commerciality per the Alea 1947 C Block. The Contingent Value
Rights will expire within ten (10) years of the date of issuance.
    The Board of Directors and management of the Corporation feel strongly
that the Proposed Transaction will result in a number of benefits and
opportunities to the Corporation. The Proposed Transaction will result in
greater participating interests for the Corporation in the Acquired Interests
and synergies that may not have been available in respect of those
participating interests, solely upon the Corporation's existing interests in
the Acquired Interests.
    As described in greater detail below, upon completion of the Proposed
Transaction, the Corporation will hold:

    
    (a) an indirect participation of approximately 30.4% in Consorcio
        Colombia Energy ("CCE") (the Corporation currently holds, indirectly
        a 19.8% interest in CCE). CCE has a 52% participating interest in the
        Suroriente Block pursuant to the "Crude Oil Incremental Production
        Contract" it has entered into with Empresa Colombiana de Petroleos
        ("ECOPETROL"). The Suroriente Block (36,528 hectares) is located in
        the southeast sector of the Putumayo River and south by the San
        Miguel river on the Colombian side of the border with Ecuador. At
        current production rates, a 30.4% participation in CCE would entitle
        the Corporation to approximately 333 barrels of oil per day of
        production;

    (b) an indirect participation of approximately 54% in the NCT P&G
        Petrotesting Consortium (the Corporation currently holds, indirectly
        a 35.1% interest in the NCT P&G Petrotesting Consortium). The NCT P&G
        Petrotesting Consortium has entered into an agreement for the
        exploration and production of hydrocarbons in the Alea 1848 A Block
        with the National Agency of Hydrocarbons of Colombia. The Alea 1848 A
        Block (30,660 hectares) is located northwest of the Suroriente Block
        in the Putumayo River Basin;

    (c) an indirect participation of approximately 24.5% in the Petrotesting
        Southeast Consortium (the Corporation currently holds, indirectly a
        15.9% interest in the Petrotesting Southeast Consortium). The
        Petrotesting Southeast Consortium has entered into an agreement for
        the exploration and production of hydrocarbons in the Alea 1947 C
        Block with the National Agency of Hydrocarbons of Colombia. The Alea
        1957 C Block (23,499 hectares) is located northeast of the Suroriente
        Block in the Putumayo River Basin; and

    (d) an indirect participation of 50% in the VETRA-NCT Consortium (the
        Corporation currently holds, indirectly a 25% interest in the
        VETRA-NCT Consortium). The VETRA-NCT Consortium has a 65%
        participating interest in the Arjona Field pursuant to the
        "Operational Contract for Risk Production of Discovered, Undeveloped
        and Inactive Fields" it has entered into with ECOPETROL. The Arjona
        Field (11,891 hectares) is part of the Chimichagua Block, located in
        the department of Cesar, in the midst of the Central and the Eastern
        Mountain Ranges in the Valle Inferior del Magdalena basin in
        Colombia. Currently, the Arjona Field is being evaluated in order to
        conclude a seismic campaign and determine a comprehensive development
        program.
    

    Pursuant to the terms of the Letter Agreement and subject to receipt of
applicable regulatory approval, the Corporation intends to acquire Alentar's
interest in the Suroriente Block, the Alea 1848 A Block and the Alea 1947 C
Block by acquiring the 35% of the outstanding securities of NCT P&G
Corporation held by Alentar, a company incorporated under the laws of
Barbados. NCT holds the remaining 65% of outstanding securities of NCT P&G
Corporation.
    Pursuant to the terms of the Letter Agreement and subject to receipt of
applicable regulatory approval, the Corporation intends to acquire Alentar's
interest in the Arjona Field by: (a) assignment of Alentar's interest in an
agreement between Alentar and NCT Estudios y Proyectos, C.A., whereby Alentar
holds absolute rights to the profits or losses resulting from NCT Estudios y
Proyectos, C.A.'s entire 25% participation in the VETRA-NCT Consortium; and
(b) the novation of NCT into the place of NCT Estudios y Proyectos, C.A. in
the agreement creating the VETRA-NCT Consortium.
    Upon completion of the Proposed Transaction, one nominee of Alentar,
Mr. Juan Szabo, will be added to board of directors of the Corporation.
    Mr. Szabo is currently a consultant to Alentar. Mr. Szabo is a Mechanical
Engineer with a Master of Science degree from the University of Houston. He
has 38 years of experience in the international hydrocarbon business.
Mr. Szabo has been a member of the Board of Directors of PDVSA Petroleo & Gas,
Pequiven S.A. and Citgo Petroleum and has held the following executive
positions: Chief Financial Officer of Petroleos de Venezuela S.A., President
of Corporacion Venezolana del Petroleo and Executive Vice-President of
Exploration and Production of Petroleos de Venezuela S.A. After retiring from
Petroleos de Venezuela S.A., Mr. Szabo has acted as advisor to several
national and international corporations.
    The closing of the Proposed Transaction is subject to a number of
conditions including, but not limited to:

    
    (a) execution of any other documentation reasonably required to close the
        Proposed Transaction, in a form and substance acceptable to the
        Corporation and Alentar, including, but not limited to, a mutually
        accepted definitive agreement (the "Definitive Agreement")
        incorporating the terms set forth in the Letter Agreement and other
        terms customary of a transaction of this nature by July 31, 2008,
        unless extended by mutual written agreement;

    (b) the completion of the Proposed Transaction within 160 days from the
        date of the Definitive Agreement, to be extended upon written
        agreement by the Corporation and Alentar;

    (c) receipt of all necessary consents, approvals, exemptions and
        authorizations of governmental bodies and other interest third
        parties, including, but not limited to, approval of the Proposed
        Transaction by the TSX Venture Exchange;

    (d) the approval of the Corporation's and Alentar's board of directors;

    (e) all necessary securityholder approvals being received; and

    (f) each issue raised by any due diligence investigation which materially
        affects the interests of Alentar in the Suroriente Block, the Arjona
        Field, the Alea 1848 A Block and the Alea 1947 C Block or the
        business and financial condition of the Corporation being remedied or
        addressed to the other party's satisfaction, acting reasonably.
    

    The Definitive Agreement will contain terms and clauses setting forth the
grant by the Corporation to Alentar of rights of first refusal in respect of
any sale or disposition of all or part of the Alea 1848 A Block or the Alea
1947 C Block by the Corporation.
    There are currently 38,986,312 common shares of the Corporation
outstanding. Upon closing of the Proposed Transaction, the Corporation will
have 47,686,312 common shares outstanding.

    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 United States of America and Central and
South America. The Corporation's common shares trade on the TSX Venture
Exchange under the symbol SRN.

    Forward Looking Statements

    Certain information contained herein may constitute forward looking
statements within the meaning of applicable securities laws. Forward looking
statements may include estimates, plans, expectations, opinions, forecasts,
projections, guidance or other statements that are not statements of facts.
Although the Corporation believes that the expectations reflected in such
forward looking statements are reasonable, it can give no assurance that such
expectations will be realized. These statements are subject to certain risks
and uncertainties and may be based on assumptions that could cause actual
results to differ materially from those anticipated or implied in the forward
looking statements. The Corporation's forward looking statements are expressly
qualified in their entirety by this cautionary statement.

    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. There can be no assurance that the Proposed Transaction
will be completed as proposed or at all. 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: Travis Doupe, VP Finance and Chief Financial
Officer of the Corporation, Telephone: (403) 232-6784, Facsimile: (403)
264-7455

Organization Profile

SUROCO ENERGY INC.

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