Canacol Energy - 2020 set to be Canacol’s largest drilling campaign

Canacol Energy has provided updated production for 2019–20, capex guidance for 2020 and its natural gas reserves at year-end 2019. Management expects production for 2020 to be relatively in line with realised average sales for December 2019 at c 205mmscfd and capex for the year at c US$114m. Capex will cover 12 wells across exploration, appraisal and development activities. The investment will contribute to Canacol’s reserve replacement and growth strategy and aims to expand its capacity to serve Colombia’s increasing gas needs. Natural gas 2P reserves increased by 12% and now stand at c 624bcf. Management is also currently working on the execution of a gas sales agreement (GSA) for an additional gas export route towards Medellin to add 100mmscfd of sales capacity by the end of 2023. Our 2P + risked exploration NAV has increased by 13% to C$7.16/share, reflecting the updated 2P reserve book.