/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, June 10 /CNW/ - Suroco Energy Inc. (TSX Venture Exchange: SRN)
(the "Corporation") is pleased to announce that the National Agency of
Hydrocarbons of Colombia (ANH) has awarded the Alea 1848 A Block, in the
Putumayo Province to a consortium (the "Consortium") in which the Corporation,
indirectly through its wholly owned subsidiary NCT Corporacisn Petrolera
Latinoamericana S.L. ("NCT"), participates with a 35.1% working interest.
The Alea 1848 A Block has a total area of approximately 306 km(2) and it
is located northwest of the Suroriente Block (see "Suroriente Block" below for
further information about the Suroriente Block).
The commitment in the Alea 1848 A Block is to acquire 110 km of new 2D
seismic in 18 months at an estimated cost of US$3.3 million. The Consortium
have funded the total committed minimum work program (phase 1) for the Alea
1848 A Block through an administration trust and stand-by letters of credit,
for a total US$1.16 million net to NCT.
As a result of the acquisition of NCT, the Corporation now holds,
indirectly through NCT, interests in: (a) four blocks in Colombia: Suroriente
Block, Arjona Field, the Hato Nuevo Field and the Alea 1848 A Block, (b) the
Pirineo and Nejo Blocks in Mexico, (c) and the Hardin Field in Texas.
NCT indirectly holds a 19.8% working interest in Consorcio Colombia
Energy ("CCE") which has a 52% participating interest in a "Crude Incremental
Production Contract" with ECOPETROL S.A. for the operation of the Suroriente
Block. 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. The Suroriente Block is currently
producing over 2,200 barrels per day of oil (224 barrels per day net to the
Corporation). The Corporation and its partners have identified several
drilling prospects in this field.
NCT, through its Colombian branch, holds a 25% interest in Consorcio
Vetra-NCT. Consorcio Vetra-NCT participates with ECOPETROL S.A. in an
"Operational Contract for Risk Production of Discovered, Undeveloped and
Inactive Fields" for the Arjona Field, through which Consorcio Vetra-NCT holds
a 65% interest. The Arjona Field (11,891 hectares) is part of the Chimichagua
block, in the midst of the Central and the Eastern Mountain Ranges in the
Valle Inferior del Magdalena basin in Colombia. The contract with ECOPETROL
S.A. is suspended until the end of June while they evaluate the development
plan submitted by the Consortium which includes the drilling of a new well.
Hato Nuevo Field
NCT, through its Colombian branch, holds a 16.67% interest in Consorcio
Empesa-NCT. Consorcio Empesa-NCT participates with ECOPETROL S.A. in an
"Operational Contract for Risk Production of Discovered, Undeveloped and
Inactive Fields" for the Hato Nuevo Field, through which Consorcio Empesa-NCT
holds a 59% interest. The Hato Nuevo Field (525 hectares) is an inactive field
located 20 kilometres north of the city of Neiva, Colombia, on the eastern
bank of the Magdalena River within the sub-basin of Neiva. The plan for the
Hato Nuevo Field in 2008 is to test an existing well HN-2 in various intervals
and possibly drill a new well.
In November 2007, the Corporation announced that it acquired a 25%
participating interest in the Buganviles Block located in the Upper Magdalena
Basin in Colombia in exchange for paying US$1,500,000 towards drilling and
completing the Delta-1 exploratory well. After encountering significant
operational difficulties in drilling the well, the Corporation's management
made the decision to withdraw from ongoing operations for this project.
United States Properties
The Hardin Field, in Liberty County, Texas, where the Corporation,
indirectly through NCT, holds interests varying from 4.5% to 15%, has
concluded a detailed integrated Full Field Development Study. That Study has
identified seventy (70) new development locations. In 2008 a high volume lift
project will be executed for the main reservoir. Currently the Hardin Field is
producing 13 boepd net to the Corporation.
Pirineo Block and Nejo Block
As previously disclosed by the Corporation, NCT has entered into an
agreement (the "Trevino Transaction") whereby it will acquire from a company
owned by Manuel Trevino, a director and senior officer of NCT, 6% of the
shares of Monclova Pirineo Gas, S.A. de CV ("MPG"), a Mexican company, in
exchange for 704,653 units of NCT to be registered in the name of Mr. Trevino
(the "Trevino Units").
MPG has entered into an agreement with Pemex Exploracion y Produccion
("PEMEX") for the development, operation and maintenance of the Pirineo Block
(3,840 km(2)), a non-associated gas field located in the State of Coahuila,
Mexico. MPG also holds an interest in the Nejo Block (1,165 km(2)), a
non-associated gas field located in Northeast Mexico, through its 40% stake in
Iberoamericana de Hidrocarburos S.A. de CV. ("Iberoamericana"). Iberoamericana
has entered into an agreement with PEMEX for the development, operation and
maintenance of the Nejo Block.
The gas production from the interest in the Pirineo and the Nejo Blocks
to be acquired pursuant to the Trevino Transaction is approximately 30 boe per
day and 175 boe per day, respectively. Currently MPG has contracted ICA/Fluor
to construct a 50 MM SCF/D gas processing plant in the Pirineo Block, expected
to be operational by the third quarter of 2008. Currently MPG has three
drilling rigs operating and expected to incorporate a forth during the next
The Corporation has received conditional approval from PEMEX for the
Trevino Transaction and it is expected to close in June 2008.
The Corporation has current production of approximately 448 barrels per
day (including the interests to be acquired pursuant to the Trevino
Transaction), 442 of which is from the interests held by NCT with the
remaining from the Corporation's interests in the Flat Lake area of
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 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 regarding the Corporation and NCT 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
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) 232-6252, Facsimile: (403)