Canacol Energy Provides Production and Drilling Update, Announces Light Oil Discovery in Ecuador
Canacol Energy Ltd. (“Canacol” or the “Corporation”) (TSX:CNE; OTCQX:CNNEF; BVC:CNEC) is pleased to provide the following update concerning its production and drilling operations in Colombia and Ecuador.
Average net production before royalty for the month of July 2015 was 10,973 barrels of oil equivalent per day (“boepd”), which consisted of 7,175 barrels of oil per day (“bopd”) and 22 million cubic standard feet of gas per day (“mmscfpd”) (3,798 boepd) of natural gas. Average net production before royalty for the period August 1, 2015 to August 9, 2015 was 11,492 boepd, which consisted of 7,998 bopd and 20 mmscfpd (3,494 boepd) of natural gas.
Production in July and August 2015 to date represent significant increases over June 2015 despite planned, scheduled maintenance at one of the Corporation’s gas off takers facilities which negatively impacted the amount of gas shipped, however, the scheduled maintenance is now completed. As previously reported, average net production before royalty for the period April 1, 2015 through June 30, 2015 averaged 9,970 boepd which consisted of 5,515 bopd and 25 mmscfpd (4,455 boepd) of natural gas.
Charle Gamba, President and CEO of Canacol, commented
“Canacol remains focused on three objectives for calendar 2015: to ensure that the project to add 65 mmscfpd of new natural gas production remains on track to deliver for December 2015, to continue to invest in and increase tariff oil production in Ecuador where netbacks are not sensitive to global oil prices, and to lower operating cost and execute low cost well workovers to maintain light oil production on the LLA23 block with the highest possible margin.
In this cycle of low global oil prices, the strategy that we embarked on three years ago to diversify our production base to include Colombian natural gas production and Ecuador fixed tariff production, both insensitive to global oil prices, is yielding very obvious benefits. In the meantime, we remain well capitalized with approximately US$ 45 million of current unrestricted cash, and an additional US$ 25 million of undrawn debt.”
The Corporation anticipates achieving the higher end of its calendar 2015 net before royalty production guidance of between 10,000 to 12,000 boepd. The Corporation is also on schedule to add an additional 65 mmscfpd (11,400 boepd) of new natural gas production in December 2015 to its existing production via its new, US dollar denominated, long term take or pay gas sales contracts not tied to global oil price. The Corporation anticipates exiting calendar 2015 with more than 20,000 boepd of net production before royalty. The Corporation anticipates that approximately 75% of calendar exit production will consist of natural gas from Colombia and tariff light oil from Ecuador, both not tied to global oil prices.
Approximately 55% of the Corporation’s current total net production before royalty is not tied to global oil price, this being natural gas production from Colombia and tariff light oil production from Ecuador. The Corporation receives an average blended netback of approximately US$ 23.00 / barrel of oil equivalent for its Colombia natural gas production (average 4,455 boepd for the period April 1, 2015 to June 30, 2015, and 3,798 boepd for the month of July), and a flat tariff netback of US$ 38.56 / barrel for its Ecuadorian production (average 1,757 bopd for the period April 1, 2015 to June 30, 2015, and average production of 2,174 bopd for the month of July 2015).
All of the Corporation’s Colombian oil production is tied to global oil prices. The Corporation received an average sales price of approximately US$ 50.08 / barrel for its Colombian oil production for the period April 1, 2015 to June 30, 2015. The majority of its Colombian oil production came from its operated LLA23 block, which averaged 3,472 bopd net before royalty for the period April 1, 2015 to June 30, 2015, 4,262 bopd net before royalty for the month of July 2015, and 4,888 bopd net before royalty for the period August 1, 2015 to August 9, 2015. The increase in net oil production from the LLA23 block over the past 5 months reflect the positive results of the ongoing workover program in the Labrador and Pantro fields.
Follow us: @OilAndGasPress on Twitter | OilAndGasPress on Facebook