/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/
CALGARY, Aug. 29 /CNW/ -
Second Quarter Results
Suroco Energy Inc. (TSX Venture Exchange: SRN) ("Suroco" or the
"Corporation") is pleased to announce that it has filed with Canadian
securities regulatory authorities its unaudited financial statements for the
period ended June 30, 2007 and the accompanying Management's Discussion and
Analysis. Copies of these documents can be found on the SEDAR website at
For the three and six months ended June 30, 2007, Suroco had the
following operating results:
Three months ended Six months ended
June 30, 2007 June 30, 2007
Production 862 barrels of oil from 1,685 barrels of oil from
its 30% working interest its 30% working interest in
in Flat Lake properties Flat Lake properties in
in Saskatchewan Saskatchewan
Gross revenue $55,531 $106,779
Royalties $6,980 (14% of revenue) $14,141 (15% of revenue)
Production costs $20,786 (43% of revenue) $42,900 (46% of revenue)
administrative $16,546 (being $37,816 (being accounting,
accounting, legal, audit legal, audit and
and transfer/exchange transfer/exchange fees)
(loss) $13,563 $78,560
Cash flow from
operations ($6,602) ($3,629)
The Corporation has no employees at this time.
At June 30, 2007 the Corporation was debt free and had positive working
capital of $8,673,613. The Corporation had cash resources of $8,451,620 at
June 30, 2007.
The Corporation had 27,366,606 common shares outstanding at June 30, 2007
and 1,675,000 options. The options entitle the holder to acquire one common
share upon exercise. The options of the Corporation have a weighted average
exercise price of $0.75 and expire in 2011.
Update on Proposed Transaction to Acquire NCT Corporacisn Petrolera
Latinoamericana S.L. with Operations in Colombia, Mexico and Texas, USA
The Corporation is pleased to provide an update on its proposed arm's
length acquisition of NCT Corporacisn Petrolera Latinoamericana S.L. ("NCT"),
as previously announced in the Corporation's press release dated June 5, 2007
and updated in its press release dated July 10, 2007.
The Corporation has entered into a letter agreement (the "Letter
Agreement") dated effective May 31, 2007 whereby the Corporation intends to
acquire all of the issued and outstanding securities of NCT in exchange for
11,625,000 common shares in the capital of the Corporation at a deemed price
of US$0.80 per share and the issuance of 4,375,000 special warrants of the
Corporation. NCT is formed under the laws of Spain with offices in Caracas,
Venezuela and Bogota, Colombia and operations in Colombia, Mexico and Texas,
USA. NCT has existing oil production of approximately 172 barrels per day and
gas production of approximately 176 boe per day (including interests to be
acquired by NCT pursuant to ongoing transactions).
The Corporation continues to conduct its due diligence investigation and
work with NCT in negotiating a mutually accepted definitive agreement
incorporating the terms in the Letter Agreement and other terms customary of a
transaction of this nature. The Corporation and NCT have executed and
fulfilled their obligations pursuant to loan documentation dated July 26, 2007
relating to the term in the Letter Agreement whereby the Corporation agreed to
lend to NCT, on a secured basis, up to US$3,000,000 to fund cash calls and
operating costs associated with NCT's oil and gas production.
Update on Offer to Shareholders of Lagoon Resources Ltd.
The Corporation also announces an update on its offer to the shareholders
of Lagoon Resources Ltd. ("Lagoon") to acquire all of the issued and
outstanding common shares of Lagoon (the "Lagoon Transaction"), as previously
announced in the Corporation's press release dated November 9, 2005.
Suroco has made an offer to the shareholders of Lagoon by a letter
agreement dated effective November 7, 2005, transmitted to each shareholder of
Lagoon, for the arm's length acquisition of Lagoon. Lagoon is a privately held
company based in Belize. Lagoon's sole asset was a permission (the
"Permission") to conduct geological and geophysical investigations on
petroleum resources in an area of Belize of approximately 1,123,094 acres,
granted to Lagoon pursuant to Section 8(2) of the Petroleum Act, Chapter 225
of the Substantive Laws of Belize, Revised Edition 2000-2003.
The closing of the Lagoon Transaction was subject to a number of
conditions including: the approval of the Lagoon Transaction by the board of
directors of both the Corporation and Lagoon; a sufficient percentage of the
shareholders of Lagoon having accepted the offer by the Corporation for their
shares of Lagoon and having agreed to exchange their shares of Lagoon for
common shares of Suroco and the grant of the 5% gross overriding royalty;
obtaining all necessary regulatory approvals, including, without limitation,
any necessary approvals of the Government of Belize; the Corporation being
satisfied with the results of its due diligence with respect to the Permission
and Lagoon; and approval of the Lagoon Transaction by the TSX Venture
The Corporation has now learned that the Permission has expired prior to
Lagoon obtaining the necessary Production Sharing Agreement with the
Government of Belize. As a result, the Corporation has determined that the
conditions to closing of the Lagoon Transaction have not been fulfilled, the
Corporation no longer has an obligation to complete the Lagoon Transaction and
the Corporation is not pursuing completion of the Lagoon Transaction.
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
Corporation's proposed transactions and has neither approved nor disapproved
the contents of the press release. There can be no assurance that the
Corporation's proposed transactions will be completed as proposed or at all.
Trading in the securities of the Corporation should be considered highly
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)