Financial Statements and Related Announcement::Second Quarter and/ or Half Yearly 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
09-Aug-2024 06:08:12
Status
New
Announcement Sub Title
Second Quarter and/ or Half Yearly Results
Announcement Reference
SG240809OTHR2WBF
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 Record Natural Gas Netback and Adjusted EBITDAX for the Second Quarter of 2024

CALGARY, ALBERTA - (August 8, 2024) - 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 six months ended June 30, 2024. 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 six months ended June 30, 2024
Adjusted funds from operations increased 70% and 50% to $57.1 million and $99.3 million for the three and six months ended June 30, 2024, respectively, compared to $33.7 million and $66.4 million for the same periods in 2023, respectively, mainly due to an increase in EBITDAX combined with a decrease in current income tax expense.
Adjusted EBITDAX increased 21% and 10% to $73.2 and $134.2 million for the three and six months ended June 30, 2024, respectively, compared to $60.7 million and $121.6 million for the same periods in 2023, respectively. The increase is mainly due to an increase in the realized sales price of natural gas and liquefied natural gas ( LNG ), which averaged a record quarterly price of $6.84 per Mcf, net of transportation, representing a 33% increase from the same quarter in 2023.
The Corporation s natural gas and LNG operating netback increased 36% and 29% to $5.34 per Mcf and $5.12 per Mcf for the three and six months ended June 30, 2024, respectively, compared to $3.94 per Mcf and $3.97 per Mcf for the same periods in 2023, respectively. The increase is due to a 19% increase in average sales prices of firm long-term fixed-priced contracts to $6.04 per Mcf for the six months ended June 30, 2024, compared to $5.09 per Mcf for the same period in 2023, and the increase in interruptible prices.
Total revenues, net of royalties and transportation expenses for the three and six months ended June 30, 2024 increased 18% and 12% to $88.3 and $166.0 million, respectively, compared to $74.6 million and $148.5 million for the same periods in 2023, respectively, mainly due to higher average sales price, net of transportation expenses, offset by a decrease in realized natural gas and LNG sales volume.
Realized contractual natural gas sales volume decreased 14% and 17% to 158.5 MMcfpd and 154.5 MMcfpd for the three and six months ended June 30, 2024, respectively, compared to 184.8 MMcfpd and 185.2 MMcfpd for the same periods in 2023, respectively.
The Corporation realized a net loss of $21.3 million and $17.6 million for the three and six months ended June 30, 2024, respectively, compared to a net income of $40.0 and $56.9 million for the same periods in 2023, respectively. The decrease in net income is driven by a non-cash deferred income tax expense of $42.6 million in the three months ended June 30, 2024 as compared to a deferred income tax recovery of $38.9 million for the same period in 2023. The $42.6 million non-cash deferred income tax expense is driven by an 8% Colombian peso devaluation.
Net cash capital expenditures for the three and six months ended June 30, 2024 was $33.9 million and $69.7 million, respectively.
As at June 30, 2024, the Corporation had $42.6 million in cash and cash equivalents and $0.5 million in working capital surplus.

Outlook
For 2024, the Corporation remains focused on the following objectives:
1) In line with maintaining and growing Canacol s reserves and production in its core gas assets in the Lower Magdalena Valley Basin, the Corporation is executing comprehensive development and exploration programs. The Corporation aims to optimize its production and increase reserves by drilling up to five development wells, installing new compression and processing facilities, and through workover operations on producing wells in the Corporation s key gas fields. To date in 2024, the Corporation has completed the drilling of two successful exploration wells, Pomelo-1 and Chondaturo-1, and three successful development wells, Clarinete-10, Chontaduro-2, and Chontaduro-3. Through these above mentioned activities, the Corporation has managed to stabilize its gas sales at an average rate of 159 MMcfpd during Q2 of 2024. The high-impact Cardamomo-1 exploration well, was spud on August 8, 2024. These development and exploration activities are planned to support Canacol s robust EBITDA and allow the Corporation to capitalize on strong market dynamics in 2024.
2) Maintaining a low cost of capital, cash liquidity and balance sheet flexibility to invest for the long term. As of June 30, 2024, the Corporation had a cash balance of approximately $43 million.
3) To secure government approval of a fourth E&P contract in Bolivia that covers an existing gas field reactivation, to begin development operations with a view to adding reserves and production and commencing gas sales in 2025.
4) Continue with the Corporation s commitment to its environmental, social and governance strategy.

Additional Details

For Financial Period Ended
30/06/2024

Attachments

TRR NG CNEFS Jun 30 2024 SGX.pdf
TRR NG CNEMDA Jun 30 2024 SGX.pdf
TRR NG CNEPR Jun 30 2024 SGX.pdf
Total size =1020K