Mackie Research Updates Coverage and Buy Recommendation for Suroco Energy - Video Research Alert posted on InvestmentPitch.com
Vancouver, British Columbia--(Newsfile Corp. - November 1, 2013) - Investment firm Mackie Research has updated coverage on Suroco Energy (TSXV: SRN). Following the announcement that the company had commenced drilling the Canelo Sur 2 exploration well, analyst Bill Newman reiterated his buy recommendation and 12-month target of $0.95, a premium of 164% to the price the day the report was issued.
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Suroco is a Colombia focused international oil & gas company, with its principal assets in the Putumayo Basin. The Canelo Sur 2 exploration well is expected to reach total depth of 10,300 feet in approximately 45 days. It is a large 4-way dip closed structure targeting multiple potential reservoir zones of the Villeta Formation.
This is the first well to be drilled on the Putumayo 2 Block and if successful, additional wells are likely to be drilled from the same drilling pad. Management estimates the prospect has a gross unrisked potential resource of 10 million barrels, or 2.5 million barrels net. In July 2013, Suroco acquired a 25% interest in the PUT-2 block from PetroNova who hold the remaining 75% interest.
Alastair Hill, the company's President and CEO commented, "We are very excited to have commenced drilling this large and well defined exploration prospect which is located in the vicinity of several producing oilfields. We expect the Villeta reservoirs to be well developed at this location and in the event of success there are other similar-looking features, at least one of which could be tested from the same pad."
The PUT-2 block is located directly adjacent to the company's Alea 1947-C block, where the company has a 50% working interest and to the north of Alea 1848 block, where the company has a 49.5% working interest.
The company is currently drilling on the Suroriente block where the company has a 15.8% working interest. This exploration well commenced drilling on October 14th, and is expected to reach a total depth of 10,200 feet around the 13th of November.
As announced on October 2nd, average production for Q3 was 1,378 barrels of oil per day, net after royalty, with production for the first 27 days of October averaging 1,985 barrels of oil per day net.
Analyst Bill Newman stated, "With production near record levels, Suroco is starting to shift its focus towards higher-impact, exploration plays. We expect substantial stock appreciation if the Canelo Sur 2 exploration well is successful."
The shares are currently trading at $0.35 well below Mackie Research's target price of $0.95, and with 134 million shares outstanding, the company is capitalized at $47 million.
For more information about Mackie Research or to obtain the report on Suroco Energy contact your nearest Mackie Research office. Their branches are listed on their website at www.mackieresearch.com.
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Barry Morgan, CFO