Sunday, September 25, 2016
Canacol Energy steps up natural gas development program
Canacol Energy Ltd. is pleased to provide a revised capital plan for 2016. The new capital plan accelerates the Corporation’s natural gas opportunities in Colombia with three new gas wells. In addition, one new oil well will be drilled over the remainder of 2016. The revised 2016 capital plan has increased by $34 million, from $58 million to $92 million.
Over the past three years, the Corporation has made four gas discoveries and added 302 BCF in 2P reserves on the Esperanza and VIM 5 E&P blocks located in the Lower Magdalena Basin, Colombia. Canacol recently added a second rig to the two blocks. The objectives of the expanded gas drilling program are to 1) target management’s estimate of more than 100 billion cubic feet (“BCF”) of new potential recoverable resource in 2016 to secure new gas sales contracts, and 2) increase the productive capacity of the Corporation’s gas assets to more than 190 million cubic feet per day (“MMcf/d”) in anticipation of new sales contracts. Canacol has a large inventory of prospects and leads targeting 2.4 – 2.8 trillion cubic feet (“TCF”) of unrisked mean estimate resource potential. The Corporation’s gas resource capture strategy remains balanced for the remainder of 2016 with two gas exploration wells and two gas development wells.
The news keeps getting better out of Canacol. I think the market still perceives the company as a strictly oil producer and is missing the boat on how they have shifted to gas production. the netbacks are tremendous and after a couple of quarters of huge cashflow we should see a revaluation. In addition they just keep finding more gas as they continue to drill. I continue to like long term.