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Suroco Energy completes drilling & testing of Poyato-1 in Colombia

Suroco Energy Inc. has reported that the Poyato-1 exploration well in the San Antonio Block in Colombia has completed drilling

Suroco Energy Inc.

Suroco Energy Inc. has reported that the Poyato-1 exploration well in the San Antonio Block in Colombia has completed drilling and testing and has been temporarily suspended pending further evaluation.

The Poyato-1 well spudded on July 21, 2011, targeting a four way structure mapped on 3D seismic with multiple potential hydrocarbon zones in Eocene and Cretaceous aged formations. Total depth was reached in this vertical well bore at 8,550 feet on August 07, 2011. Crude oil and natural gas shows were encountered while drilling in both the Mirador and Une Formations. Log analysis and Side Wall Cores confirmed the presence of oil in the Mirador formation plus additional potential hydrocarbon zones in the Une and Gacheta Formations were identified via log analysis. The Poyato-1 well was cased and tubing conveyed production testing commenced on August 17, 2011. The first two tests in the Une Formation and Gacheta Formation had no natural flow and ultimately swabbed only fresh water. Two intervals were tested in the Mirador Formation, wherein the lowermost interval had no natural flow and swabbed only fresh water and the upper Mirador interval had no natural flow, but recovered 24.4 barrels of crude oil (19 degree API) and water during 7 hours of swabbing operations. The average basic sediment and water for the Mirador test was 91%.

The Poyato-1 well has been temporarily suspended pending further analysis.

The Corporation's share of costs in the drilling stage of the Poyato-1 well were limited to US$0.5 million under a turn-key agreement with Thorneloe Energy Sucursal Colombia. During the testing stage of the operation the Corporation was responsible for its 28% working interest share. The estimated total costs, net to the Corporation, for drilling and testing the Poyato-1 well are estimated to be approximately US$0.9 million.

Operational Update

The drilling unit that was used to drill the Poyato-1 well will remain on location whilst civil operations continue preparing the access road and surface pad for the next well in the program, the Poyato Sur-1 exploration well. This well is targeting a fault defined closure located approximately 3 kilometres from the Poyato-1 well location. Drilling operations at Poyato Sur-1 are expected to commence in late September or early October. In Poyato Sur-1, the Corporation's share of drilling costs will be limited to US$0.5 million pursuant to the aforementioned turn-key agreement.

As previously announced by the Corporation, the Corporation has exercised its option to acquire a 28% working interest in the San Antonio Block in Colombia. The completion of the acquisition is pending approval from the Agencia Nacional de Hidrocarburos of Colombia, which the Corporation expects to receive in September, 2011.

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 and Western Canada. The Corporation's common shares trade on the TSX Venture Exchange under the symbol SRN.

Tags: Suroco Energy