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Suroco Energy (V.SRN) to acquire 25% stake in Colombia Block

Stockhouse Editorial
0 Comments| July 22, 2013

Suroco Energy Inc. (TSX: V.SRN, Stock Forum) said that its subsidiary, Suroco Energy SLU, has acquired a 25% interest in the Putumayo 2 Block in Colombia from PetroNova Inc.'s (TSX: V.PNA, Stock Forum) subsidiary, PetroNova Colombia Inc.
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.
According to the Suroco Energy press release, the company believes 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,” said Alastair Hill, President and Chief Executive Officer.
Suroco Energy SLU has acquired the interest in the Block in exchange for a US$3.0 million payment to PetroNova representing 25% of the back costs for 2D and 3D seismic incurred to date on the Block and 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.
As part of the agreement, Suroco Energy SLU will 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.
Suroco 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.

On Monday, Suroco was trading at $0.39 a share. The company had a market cap of $52.4 million, based on 134.3 million shares outstanding.

Tags: OIL & GAS E&P

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