(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)
Suroco Energy Inc. (TSX VENTURE:SRN) (the "Corporation") is pleased to announce
that it has filed its Audited Consolidated Financial Statements and the related
Management's Discussion and Analysis ("MD&A") for the year ended December 31,
2013 and its Annual Information Form for the year ended December 31, 2013 on the
System for Electronic Document Analysis and Retrieval ("SEDAR").
Copies of these documents can be found on the SEDAR website at www.sedar.com.
Financial & Operating Highlights
(All references to $ are United States dollars unless otherwise noted)
3 months ended December 31 12 months ended December 31
2013 2012 2013 2012
(Restated)(3) (Restated)(3)
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Financial
Oil and gas revenue
($) 14,617,482 9,345,598 50,431,015 35,314,518
Funds flow from
operations (1) ($) 1,805,780 268,469 13,014,383 8,916,025
Per share - basic
($) 0.01 0.00 0.10 0.07
Per share - diluted
($) 0.01 0.00 0.09 0.07
Net income (loss) ($) 101,874 (1,812,790) 1,105,515 1,745,122
Per share - basic
and diluted ($) 0.00 (0.01) 0.01 0.01
Adjusted net income
(1) ($) (472,005) (1,812,790) 2,026,273 1,745,122
Per share - basic
and diluted($) 0.01 (0.01) 0.01 0.01
Total assets ($) 84,018,279 61,006,917 84,018,279 61,006,917
Working capital
surplus (deficit) (1)
($) (893,742) 395,140 (893,742) 395,140
Common shares
outstanding, end of
period
Basic 134,329,734 134,329,734 134,329,734 134,329,734
Fully Diluted 151,809,734 147,839,734 151,809,734 147,839,734
Weighted average
common shares
outstanding
Basic 134,329,734 134,329,734 134,329,734 130,133,459
Diluted (2) 138,770,746 138,897,055 139,145,173 134,816,152
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Operational
Average daily net
after royalty
production (bopd) 1,810 1,101 1,517 991
Average reference
price - WTI ($ per
barrel) 97.50 88.01 97.98 94.05
Operating Netback ($
per barrel)
Average realized
price 83.51 91.39 88.89 100.96
Royalties 6.89 7.31 7.24 8.08
Production and
transportation
expenses 41.29 51.43 32.35 39.21
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Operating Netback 35.33 32.65 49.30 53.67
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Notes:
1. Funds flow from operations is cash flow from operating activities before
changes in other non-cash working capital items. Funds flow from
operations is not a measure recognized by generally accepted accounting
principles ("GAAP"). See "Non-GAAP Measures" in the MD&A.
2. Working capital surplus includes current assets less current
liabilities. Working capital surplus is not a measure recognized by
GAAP. See "Non-GAAP Measures" in the MD&A.
3. In periods where there were losses attributable to shareholders, all
potentially dilutive securities were considered anti- dilutive and were
therefore excluded from the fully diluted number of weighted average
common shares outstanding calculation. All potentially dilutive
securities were considered for the calculation of diluted number of
shares outstanding at the end of period.
Proposed Transaction
On April 26, 2014, the Corporation entered into an arrangement agreement
("Arrangement Agreement") with Petroamerica Oil Corp ("Petroamerica") pursuant
to which Petroamerica has agreed to acquire all the issued and outstanding
common shares of the Corporation on the basis of 1.7627 of Petroamerica common
shares for each outstanding common share of the Corporation (the "Arrangement").
The Arrangement is to be completed by way of a plan of arrangement under the
Business Corporations Act (Alberta), subject to customary conditions for a
transaction of this nature including, but not limited to the requisite approval
of shareholders of the Corporation. A special meeting of the holders of common
shares of the Corporation is scheduled to take place in June 2014. Closing of
the Arrangement is expected to occur shortly thereafter.
Highlights from 2013
-- Increased average production (net to the Corporation after royalty) to
1,517 barrels of oil per day ("bopd"), an increase of 53% from the prior
year and increased average fourth quarter production to 1,810 bopd (net
to the Corporation after royalty), an increase of 64% over the prior
year.
-- Drilled and placed on permanent production 4 new Cohembi wells.
-- Closed on acquisition of a 25% economic interest in the PUT-2 Block in
the Putumayo basin of Colombia.
-- Established $21 MM senior secured bank credit facility with Macquarie
Bank Limited.
-- Decreased production costs on a per barrel basis of approximately 17%
for the year from $39.21/bbl to $32.35/bbl.
-- Announced 32% increase in proved producing reserves for 2013.
-- The Pinuna 7 was drilled in Q3 of 2013 and reached a planned total depth
of 10,200 feet however, the Corporation and its partner in the well were
unable to produce oil due to pump electrical problems and are planning
to go back and retest the well in 2014.
-- Spudded the Canelo Sur-2 well during 2013, however, due to mechanical
difficulties, the Corporation and its partner in the well were not able
to get to total depth prior to year-end.
-- Successfully Drilled Quinde 2 well, which encountered 10 feet of oil-
bearing Upper Villeta Sand.
-- The Quinde 4 was successfully drilled to a total depth of 10,100 feet,
encountering approximately 30 feet of oil- bearing Upper Villeta Sand.
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".
Reserves Information
"Proved" reserves are those reserves that can be estimated with a high degree of
certainty to be recoverable. It is likely that the actual remaining quantities
recovered will exceed the estimated proved reserves.
FORWARD LOOKING STATEMENTS
Certain statements included in this press release constitute forward-looking
statements under applicable securities legislation. These statements relate to
future events or future performance of the Corporation. All statements other
than statements of historical fact are forward-looking statements. In some
cases, forward-looking statements can be identified by terminology such as
"may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate",
"predict", "potential", "continue", or the negative of these terms or other
comparable terminology. Forward-looking statements or information in this press
release include, but are not limited to, the completion of the Arrangement, the
characteristics of the Corporation's oil and natural gas properties, reserve
quantities and the discounted present value of future net cash flows from such
reserves, net revenue, capital expenditures, operating costs, exploration plans
and development plan. In addition, this press release may contain
forward-looking statements attributed to third party industry sources. Undue
reliance should not be placed on these 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; receipt of
securityholder and third party approvals; 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 the Corporation's Canadian
securities filings.
The forward-looking statements contained in this press release are made as of
the date of this press release. Except as required by law, the Corporation
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, the Corporation undertakes no obligation to
comment on the expectations of, or statements made by, third parties in respect
of the matters discussed above. New factors emerge from time to time, and it is
not possible for management of the Corporation to predict all of these factors
and to assess in advance the impact of each such factor on the Corporation's
business or the extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any forward-looking
statement or information. The forward-looking statements contained herein are
expressly qualified by this cautionary statement. Moreover, neither the
Corporation nor any other person assumes responsibility for the accuracy and
completeness of the forward-looking statements.
Statements relating to "reserves" are deemed to be forward-looking statements or
information, as they involve the implied assessment, based on certain estimates
and assumptions, that the reserves described can be profitable in the future.
There are numerous uncertainties inherent in estimating quantities of proved
reserves, including many factors beyond the control of the Corporation. The
reserve data included herein represents estimates only. In general, estimates of
economically recoverable oil and natural gas reserves and the future net cash
flows therefrom are based upon a number of variable factors and assumptions,
such as historical production from the properties, the assumed effects of
regulation by governmental agencies and future operating costs, all of which may
vary considerably from actual results. All such estimates are to some degree
speculative and classifications of reserves are only attempts to define the
degree of speculation involved. For those reasons, estimates of the economically
recoverable oil and natural gas reserves attributable to any particular group of
properties and classification of such reserves based on risk of recovery and
estimates of future net revenues expected therefrom, prepared by different
engineers or by the same engineers at different times, may vary substantially.
The actual production, revenues, taxes and development and operating
expenditures of the Corporation with respect to these reserves will vary from
such estimates, and such variances could be material.
Estimates with respect to proved reserves that may be developed and produced in
the future are often based upon volumetric calculations and upon analogy to
similar types of reserves rather than actual production history. Estimates based
on these methods are generally less reliable than those based on actual
production history. Subsequent evaluation of the same reserves based upon
production history will result in variations, which may be substantial, in the
estimated reserves.
Consistent with the securities disclosure legislation and policies of Canada,
the Corporation has used forecast prices and costs in calculating reserve
quantities included herein. Actual future net cash flows also will be affected
by other factors such as actual production levels, supply and demand for oil and
natural gas, curtailments or increases in consumption by oil and natural gas
purchasers, changes in governmental regulation or taxation and the impact of
inflation on costs.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the
proposed Arrangement and has neither approved nor disapproved the contents of
this press release.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Suroco Energy Inc.
Alastair Hill
President and Chief Executive Officer
(403) 232-6784
(403) 264-7455 (FAX)
Suroco Energy Inc.
Travis Doupe
VP Finance and Chief Financial Officer
(403) 232-6784
(403) 264-7455 (FAX)
www.suroco.com
(TSXV:SRN)
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