Suroco Acquires 25% in Putumayo 2 Block in Colombia

Source: www.gulfoilandgas.com 7/22/2013, Location: South America

Suroco Energy Inc is pleased to announce that its wholly owned subsidiary, Suroco Energy SLU, has acquired a 25% interest in the Putumayo 2 Block in Colombia (the “Block”) from PetroNova Inc.’s wholly owned subsidiary, PetroNova Colombia Inc. (“PetroNova”). Upon approval by the Agencia Nacional de Hidrocarburos of Colombia, the 25% economic interest in the Block acquired from PetroNova will convert into a full 25% undivided working interest in the Block.

Mr. Alastair Hill, the Corporation’s President and Chief Executive Officer commented, “We are very excited to have come to this agreement with PetroNova because we believe that the Putumayo 2 Block is located in a prospective area of the basin for hydrocarbon charge. Within this undrilled Block there is an excellent quality 3D seismic grid which was acquired by PetroNova in 2011 and which confirmed the presence of several features, including a large four-way dip closed structural feature in the northern area of the Block which will be drilled with the first well. An added benefit to Suroco is that the southern area of the Block contains a large structural lead, previously recognized by both Suroco and PetroNova, which extends across the Block boundary into Suroco’s Alea 1947C Block and therefore allows us to consolidate our ownership in this lead. In addition to pure structural plays, we believe the Block contains potential for combined structural-stratigraphic plays similar to the Cohembi oilfield which we are actively developing at this time. Completing this acquisition shortly before drilling operations has allowed us to minimize the cycle time from first investment to exploration drilling”.

Suroco Energy SLU has acquired the 25% interest in the Block in exchange for: (a) the payment to PetroNova of US$3 million, representing 25% of the back costs for 2D and 3D seismic incurred to date on the Block, (b) the payment of US$199,165 representing 25% of the incurred costs in preparation for the first exploration well to be drilled on the Block, and (c) the agreement by Suroco Energy SLU to fund the first US$6 million in costs for the first exploration well drilled on the Block, after which PetroNova will pay the next US$3 million in such costs, and thereafter, if applicable, the parties will pay costs on the basis of their respective interests in the Block.

Civil construction activities are underway and it is anticipated that the first exploration well at the Canelo Sur 2 location will commence drilling in the third quarter of 2013. The well is targeting multiple reservoir objectives in the Villeta Formation and is expected to take approximately 45 days to drill, excluding any testing and completion activity that may be required.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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