General Announcement::Canacol Energy Ltd. Provides Gas Sales and Drilling Update

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
General Announcement
Date &Time of Broadcast
10-Oct-2023 20:01:15
Status
New
Announcement Sub Title
Canacol Energy Ltd. Provides Gas Sales and Drilling Update
Announcement Reference
SG231010OTHRT9NL
Submitted By (Co./ Ind. Name)
Canacol Energy Ltd.
Designation
SGX-SE
Description (Please provide a detailed description of the event in the box below)
Canacol Energy Ltd. Provides Gas Sales and Drilling Update


CALGARY, ALBERTA (October 10, 2023) - Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE; OTCQX:CNNEF; BVC:CNEC) provides the following gas sales and drilling operations update.

September Gas Sales of 161 MMscfpd

Realized contractual natural gas sales (which are gas produced, delivered, and paid for) were 161 million standard cubic feet per day for September 2023. Average realized contractual natural gas sales for the month of October 2023 to date are 162 MMscfpd, with current contractual natural gas sales as of October 9, 2023 being 180 MMscfpd of gas.

Realized contractual natural gas sales for the third quarter of 2023 averaged 178 MMscfpd, down slightly from the 185 MMscfpd and 186 MMscfpd reported in the second and first quarters respectively. Preliminary adjusted EBITDAX for the third quarter is estimated to be $61 million and in line with the $60.7 million and $60.9 million reported in the second and first quarters respectively.

Commencing the second week of August 2023 the Corporation experienced unusual and unexpected production capacity restrictions at some of its gas fields as a result of issues at the Jobo gas treatment facility as well as certain of its producing wells. As a result of the foregoing the Corporation has had to restrict gas deliveries under certain supply contracts dedicated to supplying non-essential gas demand, all in accordance with applicable Colombian regulations and in consultation with the relevant authorities. The Corporation is presently working on remediating this short-term disruption and expects to have production back to normal levels shortly. The Corporation anticipates that it will be able to make up lost sales volumes by year end and meet its average production and financial targets and therefore does not expect this situation to have a material impact on its operations and results.

Near Term Drilling Program

The Corporation completed the drilling of the Aguas Vivas 4 development well on September 16, 2023, encountering 357 feet true vertical depth ( ft TVD ) of net gas pay within the main Cienaga de Oro sandstone ( CDO ) target. The well was tied into permanent production and has been on production since September 26, 2023.

The Corporation completed the drilling of the Clarinete 9 development well on October 5, 2023. The well encountered 236 ft TVD of net gas pay within the CDO sandstone reservoir and is currently being cased and completed prior to tying into the permanent production facility by October 24, 2023.

The Corporation completed the drilling of the Fresa 2 appraisal well targeting sandstones of the upper CDO sandstone reservoir that are productive in the offsetting Fresa 1 exploration well drilled in 2021. Fresa 2 encountered 10 ft TVD of net gas pay within the upper CDO target. The Corporation is scheduling to complete and tie in the Fresa 2 well in November 2023.

The Corporation is currently drilling the Pandereta 9 and Nelson 15 development wells, both targeting infill drilling locations within the respective producing fields. The Corporation plans to have both wells tied in and on production prior to the end of October 2023.






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