Financial Statements and Related Announcement::Third Quarter Results

Issuer & Securities

Issuer/ Manager: CANACOL ENERGY LTD.
Securities: CANACOLENE US$500M5.75%281124A - US134808AD63 - PNTB
CANACOLENE US$500M5.75%281124R - USU13518AC64 - YW0B
Stapled Security: No

Announcement Details

Announcement Title: Financial Statements and Related Announcement
Date &Time of Broadcast: 17-Nov-2025 18:25:15
Status: New
Announcement Sub Title: Third Quarter Results
Announcement Reference: SG251117OTHR6YI1
Submitted By (Co./ Ind. Name): Canacol Energy Ltd.
Designation: SGX-SE
Description (Please provide a detailed description of the event in the box below - Refer to the Online help for the format): Canacol Energy Ltd. Reports Net lncome of $18.7 Million For The Third Quarter of 2025

CALGARY, Alberta, Nov. 17, 2025 (GLOBE NEWSWIRE) -- Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE; OTCQX:CNNEF; BVC:CNEC) is pleased to report its financial and operating results for the three and nine months ended September 30, 2025. Dollar amounts are expressed in United States dollars, with the exception of Canadian dollar unit prices ("C$") where indicated and otherwise noted.

Highlights for the three and nine months ended September 30, 2025.

The Corporation's natural gas and liquefied natural gas ("LNG") operating netback increased 2% and 3% to $5.34 and $5.30 per Mcf for the three and nine months ended September 30, 2025, respectively, compared to $5.25 and $5.17 per Mcf for the same periods in 2024, respectively. The increase is due to an increase in average sales prices, offset by an increase in operating expenses on a per Mcf basis.
Adjusted EBITDAX decreased 43% and 31% to $49.1 million and $152.7 million for the three and nine months ended September 30, 2025, respectively, compared to $85.8 million and $220.1 million for the same periods in 2024, respectively. The decrease is mainly due to a decrease in realized contractual natural gas and LNG sales volumes.
Adjusted funds from operations decreased 20% and 22% to $46.1 million and $122.2 million for the three and nine months ended September 30, 2025, respectively, compared to $57.9 million and $157.3 million for the same periods in 2024, respectively, mainly due to a decrease in EBITDAX.
Total revenues, net of royalties and transportation expenses for the three and nine months ended September 30, 2025 decreased 21% and 18% to $69.5 million and $207.0 million, respectively, compared to $87.9 million and $253.9 million for the same periods in 2024, respectively, mainly due to a decrease in realized natural gas and LNG sales volumes.
Realized contractual natural gas sales volume decreased 24% and 21% to 121.7 Mcfpd and 123.1 Mcfpd for the three and nine months ended September 30, 2025, respectively, compared to 159.8 Mcfpd and 156.3 Mcfpd for the same periods in 2024, respectively.
The Corporation realized net income of $18.7 million and $64.3 million for the three and nine months ended September 30, 2025, respectively, compared to a net income of $10.3 million and a net loss of $7.3 million for the same periods in 2024, respectively. The increase in net income is the result of recognizing a non-cash deferred income tax recovery of $5.4 million and $39.0 million for the three and nine months ended September 30, 2025, respectively, compared to a non-cash deferred income tax expense of $5.3 million and $48.4 million for the same periods in 2024, respectively.
Net cash capital expenditures for the three and nine months ended September 30, 2025, were $39.1 million and $146.6 million, respectively, compared to $23.9 million and $93.7 million for the same periods in 2024, respectively. The increase is mainly related to drilling activities and the installation of compression facilities.
As at September 30, 2025, the Corporation had $36.5 million in cash and cash equivalents and $29.9 million in working capital deficit.
The unaudited interim consolidated financial statements for the three and nine months ended September 30, 2025 contain an explanatory paragraph related to the Corporation's ability to continue as a going concern. Also see "Liquidity and Capital Resources" section in the MD&A.

Outlook

The Corporation remains focused on completing its exploration and development drilling and workover programs, and the installation of additional compression, for the remainder of 2025. The Corporation abandoned the Corno-1 and Ramsay-1 exploration wells which both encountered non-commercial quantities of gas. The drilling rig is preparing to mobilize to the Kantana-2 development well, which will be followed by the spudding of the Monstera-1 exploration well prior to year end 2025. The Corporation is also planning to continue working over a number existing wells in order to maintain gas production from its producing assets.

The Corporation is in discussion with various existing and new banking groups in order to address ongoing liquidity, and will communicate any material developments in a timely manner.