Suroco Energy Inc. Recommends Rejection of Most Recent Vetra Offer and Reaffirms Recommendation for Arrangement With Petroame...

(Not for dissemination in the United States of America)

Suroco Energy Inc. (TSX VENTURE:SRN) ("Suroco" or the "Corporation") announces
that its Board of Directors, has unanimously recommended that Suroco
shareholders REJECT the unsolicited cash offer from Vetra Acquisition Ltd., a
wholly owned subsidiary of VETRA Holding S.a.r.l. (collectively "Vetra") to
acquire the issued and outstanding common shares of Suroco ("Suroco Shares") at
$0.75 per share in cash (the "Vetra Offer"). 


As previously announced, Suroco has entered into an agreement with Petroamerica
Oil Corp. ("Petroamerica") under which Petroamerica will acquire all of the
issued and outstanding Suroco Shares pursuant to a plan of arrangement (the
"Petroamerica Arrangement"). Pursuant to recent amendments to the Petroamerica
Arrangement, holders of Suroco Shares can now elect to receive one of the
following for each Suroco Share held: (i) 2.2161 common shares of Petroamerica
(the "Share Option"); (ii) $0.2079 in cash and 1.6401 common shares of
Petroamerica (the "Cash and Share Option"); or (iii) $0.80 in cash (the "All
Cash Option"). The total amount of cash available is capped at $27 million. In
the event that the amount of cash elected to be received by the holders of
Suroco Shares exceeds $27 million (taking into consideration the Cash and Share
Option elections and the All Cash Option elections), the Suroco shareholders
that selected the All Cash Option will receive a pro-rated amount of cash and
the equivalent pro-rated number of Petroamerica shares based on an exchange
ratio of 2.2161 common shares of Petroamerica for each Suroco Share. There is no
limit on the ability of Suroco shareholders to make any of the aforementioned
elections. 


Reasons to Reject the Vetra Offer 

On June 20, 2014, Vetra announced its intention to increase the cash
consideration under the Vetra Offer to $0.75 in cash for each Suroco Share, from
its earlier insufficient offer of $0.72 in cash for each Suroco Share. The Board
of Directors of Suroco and its special committee of independent directors (the
"Special Committee") carefully considered and reviewed the terms and conditions
of the Vetra Offer with the assistance of its financial and legal advisors. Upon
the recommendation of the Special Committee, and based on the verbal advice of
its financial advisor, Peters & Co. Limited, and its legal advisors, the Board
of Directors of Suroco has unanimously reaffirmed its recommendation IN FAVOUR
of the Petroamerica Arrangement and has concluded that the Petroamerica
Arrangement is superior to this most recent Vetra Offer. 


A summary of the reasons for the recommendations of the Board of Directors is as
follows:




a.  The Petroamerica Arrangement provides a premium to shareholders. The
    Vetra Offer constitutes a discount to the consideration being offered
    pursuant to the Petroamerica Offer. 
b.  The Board of Directors continues to believe that the Petroamerica
    Arrangement will provide long term value in excess of the consideration
    being offered under the Vetra Offer and for the benefit of all
    shareholders of the combined company. The Petroamerica Arrangement
    creates a combined company holding interests in eleven exploration and
    production contracts focused on high netback light and medium oil
    exploration and production in the Llanos and Putumayo Basins in
    Colombia, including the recently acquired 50% interest in the Putumayo 7
    Block in Colombia that is immediately adjacent to the Suroriente Block.
    Suroco's management believes that the Putumayo 7 Block may contain an
    extension of the recently discovered Quinde field and when drilled, is
    expected to add significant value to the combined company, under better
    economic terms than the Suroriente Block. By tendering their shares to
    the Vetra Offer, Suroco shareholders will not have the opportunity to
    realize the potential of the opportunities on the Putumayo 7 Block. 
c.  The combined company resulting from the Petroamerica Arrangement will
    have a strong, under-levered balance sheet that is expected to fully
    fund the future development and exploration of its asset base. As of
    June 20, 2014, Petroamerica held approximately US$100 million in cash
    and, upon the completion of the Petroamerica Arrangement and after the
    payment of expenses thereunder, including the payment of the maximum
    amount of the cash component under the Cash and Share Option and the All
    Cash Option and the satisfaction of Suroco's existing credit facilities,
    expects to hold at least US$35 million in cash and only US$31.5 million
    in debt.  
d.  Petroamerica has an established history of deal making and delivering
    reserves and production growth that has resulted in substantial value
    creation for its shareholders. Petroamerica has grown net production
    from an average of 155 barrels of oil equivalent per day in the first
    quarter of 2012 to 6,478 barrels of oil equivalent per day average in
    the first quarter of 2014. Petroamerica has also increased working
    interest proved plus probable reserves from 3.0 million barrels of oil
    as at December 31, 2011 to 4.9 million barrels of oil equivalent as at
    December 31, 2013 and Petroamerica's share price has appreciated more
    than 230% from the beginning of 2012 to the June 19, 2014 close of
    trading of the Petroamerica Shares. 
e.  The Vetra Offer is inherently coercive. The Vetra Offer is structured
    such that Vetra need only acquire 50.1% of the issued and outstanding
    Suroco Shares (on a fully diluted basis) in order to complete the Vetra
    Offer, and thus Vetra may gain effective control of Suroco without any
    obligation to acquire the outstanding Suroco Shares that were not
    tendered to the Vetra Offer. A Suroco shareholder may be left holding a
    minority investment, at a reduced price, reflective of a minority
    discount in a company under the control of Vetra and with reduced
    liquidity in the Suroco Shares. 
f.  Vetra is attempting to extract value that should accrue to existing
    Suroco shareholders. Vetra holds interests in three out of five of
    Suroco's oil and gas exploration and production properties in Colombia.
    As a result, Vetra has a clear understanding of the upside potential of
    a significant portion of Suroco's asset base. To date, Vetra has
    repeatedly attempted to acquire Suroco for cash and often at "low-ball"
    prices. The Vetra Offer is a further attempt to acquire ownership of
    Suroco's assets in a manner whereby existing Suroco shareholders are
    precluded from participating in Suroco's anticipated growth. 



The Vetra Offer is not supported by Suroco's largest shareholder, Alentar
Holdings Inc. ("Alentar") or by Suroco's directors and officers. Such persons
hold approximately 19.18% of the outstanding Suroco Shares (16.86% on a
fully-diluted basis) and are parties to support agreements which require them to
vote in favour of the Petroamerica Arrangement and prevent them from tendering
their Suroco Shares to the Vetra Offer. This makes it much more difficult for
the Vetra Offer to succeed. Alentar has confirmed its preference to receive
stock of the combined company resulting from the Petroamerica Arrangement, in
order to participate in Petroamerica's upside potential, rather than be cashed
out.


Directors' Circular 

Vetra continues to make misleading and inaccurate claims about Suroco,
Petroamerica, Alentar and the Petroamerica Arrangement. Corrections to Vetra's
numerous inaccuracies are out in the Directors' Circular of Suroco dated June
20, 2014 that has been mailed to each of Suroco's shareholders in compliance
with applicable securities laws and filed with Canadian securities regulatory
authorities. The Directors' Circular is available on SEDAR at www.sedar.com.
Suroco shareholders are advised to read the Directors' Circular carefully and in
its entirety, as it will contain important information regarding Suroco,
Petroamerica and the previous Vetra Offer. If shareholders of Suroco have any
questions or require more information, they are encouraged to contact Suroco's
proxy solicitation agent, Georgeson Shareholder Communications Canada, Inc.
("Georgeson"), toll-free at 1-888-605-7641 or outside North America, collect at
781-575-2422 or by email at [e-mail].


How to Vote IN FAVOUR of the Petroamerica Arrangement 

Any Suroco shareholder that has already voted IN FAVOUR of the Petroamerica
Arrangement need not take any action, as their votes will be counted. Any Suroco
shareholder who has voted AGAINST the proposed combination transaction is
encouraged to change its vote and vote IN FAVOUR of the Petroamerica
Arrangement.  


Registered shareholders of Suroco are requested to complete, date, sign and
return the form of proxy that accompanied the Information Circular and Proxy
Statement of the Corporation dated May 27, 2014 (a copy of which can also be
found on Suroco's profile on SEDAR at www.sedar.com and which was filed on May
30, 2014) and the Directors' Circular. To be valid, the form of proxy must be
signed and forwarded so as to reach, or be deposited with, Suroco's transfer
agent, Computershare Trust Company of Canada, 8th Floor, 100 University Avenue,
Toronto, Ontario, M5J 2Y1, Attention: Proxy Department, by fax to (866)
249-7775, by internet at www.investorvote.com or by telephone by calling (866)
732-8683 (toll free) (international direct dial [phone]), so that it is
received not later than 10:00 a.m. (Mountain time) on June 25, 2014. 


Non-registered shareholders who receive voting instructions from their
intermediary should carefully follow the instructions provided by their
intermediary to ensure their vote is counted. 


If you have any questions that are not answered herein, or would like additional
information, you should contact your professional advisors. You can also contact
Georgeson, the proxy solicitation firm engaged by Suroco, toll-free at
1-888-605-7641 or outside North America, collect at 781-575-2422 or by email at
[e-mail] should you have any questions regarding voting of your
Suroco Shares. 


How to REJECT the Vetra Offer and Withdraw Tendered Shares 

To reject the Vetra Offer, you should do nothing. The Vetra Offer is open for
acceptance until July 17, 2014, unless extended. Suroco shareholders who have
already tendered their shares to the Vetra Offer can withdraw them at any time
before they have been taken up and accepted for payment by Vetra. Shareholders
holding shares through a dealer, broker or other nominee should contact such
dealer, broker or nominee to withdraw their Suroco shares. Shareholders may also
contact the proxy solicitation firm retained by Suroco, Georgeson, toll-free at
1-888-605-7641 or outside North America, collect at 781-575-2422 or via email at
[e-mail].


General 

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


Definitions 

For the foregoing discussions in this press release, the following terms have
the following respective meanings:




--  "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. 
    
--  "Probable" reserves are those additional reserves that are less certain
    to be recovered than proved reserves. It is equally likely that the
    actual remaining quantities recovered will be greater or less than the
    sum of the estimated proved plus probable reserves. 



Additionally, "barrels of oil equivalent" ("boe") is at a conversion rate of
6,000 cubic feet ("cf") of natural gas for one barrel of oil and is based on an
energy equivalence conversion method. Boe may be misleading, particularly if
used in isolation. A boe conversion ratio of 6,000 cf: 1 barrel is based on an
energy equivalence conversion method primarily applicable at the burner tip and
does not represent a value equivalence at the wellhead.


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, statements pertaining to Suroco's
future performance, business prospects or opportunities, including information
concerning the Vetra Offer and the completion and effect of the Petroamerica
Arrangement, including without limitation upon completion of the Petroamerica
Arrangement, the resulting combined company's expected drilling and exploration
plans, business strategy, priorities, plans and expected production and the
anticipated timing thereof, the extension of the Quinde West field to the
Putumayo 7 Block and the expected economic terms of such fled, the potential
value of the N sand oil play in the Putumayo Basin in Colombia, production
growth of the combined company, and the economic effects thereof and other
statements. 


Readers are cautioned not to place undue reliance on 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; the
inability to obtain regulatory approval for any operational activities;
inability to get all necessary approvals for the completion of the Petroamerica
Arrangement; the risks of the oil and gas industry in general, such as
operational risks in exploring for, developing and producing crude oil and
natural gas, market demand and unpredictable shortages of equipment and/or
labour; potential delays or changes in plans with respect to exploration or
development projects or capital expenditures; fluctuations in oil and gas
prices, foreign currency exchange rates and interest rates; reliance on industry
partners; and other factors, many of which are beyond the control of Suroco or
Petroamerica.. You can find an additional discussion of those assumptions, risks
and uncertainties in Suroco's and Petroamerica's Canadian securities filings. 


Although Suroco has attempted to identify important factors that could cause
actual actions, events, results, performance or achievements to differ
materially from those described in the forward-looking statements or information
contained in this press release, there may be other factors that cause actions,
events, results, performance or achievements not to be as anticipated, estimated
or intended. There can be no assurance that forward-looking statements or
information will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. Such
forward-looking statements and information are made or given as at the date of
this press release and Suroco disclaims any intention or obligation to update or
revise any forward-looking statements or information, whether as a result of new
information, future events or otherwise, except as required under applicable
securities law. The reader is cautioned not to place undue reliance on
forward-looking statements or information. 


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 Suroco or Petroamerica.
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.


The TSX Venture Exchange Inc. has in no way passed upon the merits of the
Petroamerica Arrangement or the Vetra Offer and has neither approved nor
disapproved the contents of this press release.


Neither TSX Venture Exchange nor its Regulation Services 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
[phone]
[phone] (FAX)


Suroco Energy Inc.
Travis Doupe
VP Finance and Chief Financial Officer
[phone]
[phone] (FAX)
www.suroco.com