Canacol Energy Ltd. Provides Gas Sales and Drilling Update
Canacol Energy Ltd., a leading natural gas exploration and production company based in Colombia, has recently provided an update on its gas sales and drilling operations. Despite facing some production capacity restrictions in recent months, the company remains optimistic about meeting its production and financial targets.
In September 2023, Canacol achieved contractual natural gas sales of 161 million standard cubic feet per day. So far in October, the company has maintained an average of 162 million standard cubic feet per day, with current contractual sales reaching 180 million standard cubic feet per day. Although these figures represent a slight decrease from previous quarters, Canacol’s performance remains strong.
During the third quarter of 2023, the company’s realized contractual natural gas sales averaged 178 million standard cubic feet per day. This is in line with the figures reported in the second and first quarters, indicating stability and consistency in Canacol’s operations. Preliminary adjusted EBITDAX for the third quarter is estimated to be $61 million, aligning with the results from previous quarters.
Canacol faced unexpected production capacity restrictions at some of its gas fields due to issues at the Jobo gas treatment facility and certain producing wells. However, the company is actively working to resolve these challenges and expects to restore production to normal levels soon. Canacol is confident that it will be able to make up for the lost sales volumes by the end of the year, ensuring minimal impact on its operations and results.
In terms of its drilling program, Canacol has achieved significant milestones. The Aguas Vivas 4 development well, completed on September 16, 2023, encountered 357 feet true vertical depth of net gas pay within the main Cienaga de Oro sandstone target. The well has been successfully tied into permanent production since September 26, 2023. Similarly, the Clarinete 9 development well, drilled on October 5, 2023, encountered 236 feet true vertical depth of net gas pay within the Cienaga de Oro sandstone reservoir. This well is currently being cased and completed, with plans to connect it to the permanent production facility by October 24, 2023.
Canacol also completed the drilling of the Fresa 2 appraisal well, targeting the upper Cienaga de Oro sandstone reservoir. This well encountered 10 feet true vertical depth of net gas pay within the upper Cienaga de Oro target. The company is scheduled to complete and tie in the Fresa 2 well in November 2023. Additionally, Canacol is currently drilling the Pandereta 9 and Nelson 15 development wells, both targeting infill drilling locations within their respective producing fields. The company aims to have both wells tied in and on production before the end of October 2023.
Canacol Energy Ltd. is a prominent player in the natural gas industry, with operations focused in Colombia. The company’s commitment to delivering consistent gas sales and its proactive approach to addressing production challenges demonstrate its resilience and dedication to meeting its targets. Canacol’s common stock trades on the Toronto Stock Exchange, the OTCQX in the United States, and the Colombia Stock Exchange, symbolizing its global presence and investor confidence.
While the company acknowledges the inherent risks and uncertainties associated with the oil and gas industry, Canacol remains focused on maximizing its potential and delivering positive results. With its strong track record and ongoing efforts to overcome challenges, Canacol Energy Ltd. continues to be a key player in Colombia’s natural gas sector.