Friday, November 11, 2016

Canacol Energy reports earnings

Canacol Energy:

(snip)

Average production volumes increased 78% and 47% to 18,632 boepd and 15,342 boepd for the three and nine months ended September 30, 2016, respectively, compared to 10,455 boepd and 10,455 boepd for the same periods in 2015, respectively, primarily due to increase in gas production in Esperanza and VIM-5 as a result of the additional sales related to the Promigas pipeline expansion.
Adjusted funds from operations for the three and nine months ended September 30, 2016 increased 102% and 67% to $30.7 million and $71 million compared to the same periods in 2015, respectively.

Adjusted funds from operations are inclusive of results from the Ecuador IPC. The increase in adjusted funds from operations is primarily the result of additional sales related to the Promigas pipeline expansion, reductions in production and transportation expenses and lower general and administrative expenses, offset by a decrease in benchmark crude oil prices.


Total petroleum and natural gas revenues for the three and nine months ended September 30, 2016 increased 102% and 40% to $44.4 million and $106 million compared to $22 million and $75.7 million for same periods in 2015, respectively. Adjusted petroleum and natural gas revenues, inclusive of revenues related to the Ecuador Incremental Production Contract (the “Ecuador IPC”) (see full discussion in MD&A), for the three and nine months ended September 30, 2016 increased 70% and 30% to $50.9 million and $125.2 million compared to $29.9 million and $96.6 million for the same periods in 2015, respectively. The increase in revenues reflects the additional sales related to the Promigas pipeline expansion, offset by a decrease in benchmark crude oil prices.

The company is now maxing out the gas sales in its current pipeline yet continues to find additional large amounts of additional gas. The company just made an agreement to increase its sales via a new pipeline by 100 million cubic feet per day. Unfortunately it will take about 18 months for this project to come to fruition. 

The company will continue to drill additional wells to build up its inventory of  gas in anticipation of the new pipeline discussed above. Overall this is what I expected and I continue to call this a hold. 


No comments:

Related Posts Plugin for WordPress, Blogger...