Welcome!

News Feed Item

Canacol Closes Strategic Acquisition of Additional Interest in LLA23 and Tests 2,898 BOPD From Labrador 4 and Leono 3 Wells

CALGARY, ALBERTA -- (Marketwired) -- 06/18/14 -- Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE)(OTCQX:CNNEF)(BVC:CNEC) is pleased to provide the following update concerning the strategic acquisition of an additional 10% working interest from Petromont Colombia S.A. Sucursal Colombia ("Petromont") in its LLA23 Exploration and Production contract located in the Llanos basin and the production test results of the Labrador 4 and Leono 3 wells also located on the LLA23 contract, which tested at a gross combined rate of 2,898 barrels of light oil per day ("bopd") (2,608 bopd net). The Corporation now has a 90% operated working interest in the LLA23 contract, with Petromont holding the remaining 10% interest. Elsewhere on the LLA23 contract the Corporation is currently rigging up on the Maltes 1 exploration well and the Pantro 2 appraisal well, and is about to commence the shooting of 400 square kilometers of 3D seismic data. As a result of the acquisition the Corporation is revising its production guidance from 12,500 to 13,500 boepd net before royalty to 13,000 to 14,000 boepd net before royalty for calendar 2014 with an anticipated exit rate for December 2014 of approximately 18,000 boepd.

Charle Gamba, President and CEO of the Corporation, commented, "This strategic acquisition has consolidated our interest in our main oil producing asset at LLA23, which accounts for approximately half of the Corporation's current 13,800 boepd of net production before royalties. With a 100% drilling success rate for both exploration and production wells to date, including the recently drilled Leono 3 and Labrador 4 wells, this strategic consolidation of interest allows us to capture almost all of the upside associated with this contract over the next several years, all now at a 90% operated working interest. We plan to drill 3 exploration wells and 7 additional development and appraisal wells during the remainder of calendar 2014, and are currently rigging up on the Maltes 1 exploration well and the Pantro 2 appraisal well. The Corporation is also about to commence shooting 400 sq km of 3D seismic data which will set up our exploration drilling programs for 2015 and 2016 on this important block."

Acquisition of 10% interest in the LLA23 contract (90% operated working interest)

Effective as of June 1, 2014, the Corporation has acquired an additional 10% working interest in the LLA 23 contract from Petromont for a purchase price of US$40 million, payable in cash and the assumption of certain liabilities related to the LLA23 contract, subject to certain post-closing adjustments relating to unbilled expenditures attributable to the acquired interest prior to the date of the transaction. Application has been made to the National Agency of Hydrocarbons of Colombia ("ANH") for formal recognition of the transaction and of the Corporation's additional 10% working interest in the LLA 23 contract.

The Acquisition has the following characteristics:


--  Current production: 775 bopd 
--  Proved plus probable reserves: 1.3 mmbo of light and medium crude oil
    (May 31, 2014)(1,2) 
--  Operating netback(3): $60-$65 per barrel 

1.  Reserves are Gross Company Reserves as evaluated by PetroTech
    Engineering Ltd. as of May 31, 2014. Gross Company Reserves are
    Petromonts working interest reserves before the deduction of royalties. 
2.  Canacol intends to release an updated corporate reserve report effective
    June 30, 2014. 
3.  Based on expected average prices for Q3/Q4 2014 and historical Canacol
    operated production, transportation and royalty expenses. 

Labrador 4 production test results

The Labrador 4 well was spud on April 30, 2014 and reached a total depth of 11,939 feet measured depth ("ft md") on May 18, 2014. The well encountered 111 feet ("ft") of net oil pay in the C7, Mirador, Barco, Gacheta and Ubaque reservoirs.

The Gacheta reservoir was perforated from 11,261 - 282 and 11,330 - 352 ft md and for a test period of 24 hours on the 16th of June 2014 flowed at an average gross rate of 1,193 bopd (1,074 bopd net) of 27 degrees API oil with 4% water cut and 7 thousand standard cubic feet per day ("mscfpd") of gas using an electro submersible pump ("ESP") set to a frequency of 55 Hz. The Ubaque reservoir was perforated from 11,390 - 11,394 ft md for a test period of 24 hours on June 2, 2014. The well flowed at an average gross rate of 638 bopd (574 bopd net) of 23 degrees API oil with 20% water cut believed to be related to the drilling and completion of the well, and 1 mscfpd using an ESP set to a frequency of 35 Hz. The well will be placed on permanent production from the Gacheta reservoir subject to the approval of the ANH.

Leono 3 production test results

The Leono 3 well was spud on May 12, 2014 and reached a total depth of 12,590 ft md on May 26, 2014. The well encountered 36 ft of net oil pay within the C7, Mirador, Gacheta, and Ubaque reservoirs. The Mirador reservoir was perforated from 11,158 to 11,165 ft md and for a test period of 7 days ended on the 14th of June 2014 flowed at an average gross rate of 1,067 bopd (960 bopd net) of 36 degrees API oil with 0.6 % water cut and 0.5 mscfpd of gas using a jet pump at 2,000 pounds per square inch. The well will be left on permanent production from the Mirador reservoir subject to the approval of the ANH.

Forward Plans on LLA23

The rig that drilled the Labrador 4 well is about to rig up to drill the Maltes 1 exploration well which is located approximately 2 kilometers north of the Labrador field. It is anticipated that the Maltes 1 exploration well will take approximately 6 weeks to drill and test. The rig that drilled the Leono 3 well is currently rigging up to drill the Pantro 2 appraisal well, which is located approximately 3 km south of Leono. The Pantro 2 well is anticipated to spud in the first week of July 2014, and will take approximately 6 weeks to drill and test.

The Corporation has recently obtained all of the necessary permits required to acquire 400 square kms of 3D seismic data and anticipates commencing acquisition in approximately 2 weeks. The seismic program is anticipated to be completed by the end of July 2014, with the results being used to plan the Corporation's exploration and development drilling programs on the LLA23 contract in calendar 2015 and 2016.

Canacol is an exploration and production company with operations focused in Colombia and Ecuador. The Corporation's common stock trades on the Toronto Stock Exchange, the OTCQX in the United States of America, and the Colombia Stock Exchange under ticker symbol CNE, CNNEF, and CNE.C, respectively.

This press release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur, including without limitation statements relating to estimated production rates from the Corporation's properties and intended work programs and associated timelines. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation cannot assure that actual results will be consistent with these forward looking statements. They are made as of the date hereof and are subject to change and the Corporation assumes no obligation to revise or update them to reflect new circumstances, except as required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include the inherent risks involved in the exploration for and development of crude oil and natural gas properties, the uncertainties involved in interpreting drilling results and other geological and geophysical data, fluctuating energy prices, the possibility of cost overruns or unanticipated costs or delays and other uncertainties associated with the oil and gas industry. Other risk factors could include risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities, and other factors, many of which are beyond the control of the Corporation.

Data obtained from the initial testing results at wells identified in this press release, including barrels of oil produced and levels of water-cut, should be considered to be preliminary until a further and detailed analysis or interpretation has been done on such data. The well test results obtained and disclosed in this press release are not necessarily indicative of long-term performance or of ultimate recovery. The reader is cautioned not to unduly rely on such results as such results may not be indicative of future performance the wells or of expected production results for the Corporation in the future.

The reserves evaluation, effective May 31, 2014, was conducted by Petrotech Engineering Ltd. and is in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. The reserves are provided on a net before royalty basis in units of millions of barrels of oil equivalent using a forecast price deck for oil and gas, adjusted for crude quality, in US dollars.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In IT, we sometimes coin terms for things before we know exactly what they are and how they’ll be used. The resulting terms may capture a common set of aspirations and goals – as “cloud” did broadly for on-demand, self-service, and flexible computing. But such a term can also lump together diverse and even competing practices, technologies, and priorities to the point where important distinctions are glossed over and lost.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of Soli...
"We're a cybersecurity firm that specializes in engineering security solutions both at the software and hardware level. Security cannot be an after-the-fact afterthought, which is what it's become," stated Richard Blech, Chief Executive Officer at Secure Channels, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"IoT is going to be a huge industry with a lot of value for end users, for industries, for consumers, for manufacturers. How can we use cloud to effectively manage IoT applications," stated Ian Khan, Innovation & Marketing Manager at Solgeniakhela, in this SYS-CON.tv interview at @ThingsExpo, held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
Join Impiger for their featured webinar: ‘Cloud Computing: A Roadmap to Modern Software Delivery’ on November 10, 2016, at 12:00 pm CST. Very few companies have not experienced some impact to their IT delivery due to the evolution of cloud computing. This webinar is not about deciding whether you should entertain moving some or all of your IT to the cloud, but rather, a detailed look under the hood to help IT professionals understand how cloud adoption has evolved and what trends will impact th...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, discussed the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
We are always online. We access our data, our finances, work, and various services on the Internet. But we live in a congested world of information in which the roads were built two decades ago. The quest for better, faster Internet routing has been around for a decade, but nobody solved this problem. We’ve seen band-aid approaches like CDNs that attack a niche's slice of static content part of the Internet, but that’s it. It does not address the dynamic services-based Internet of today. It does...
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
What happens when the different parts of a vehicle become smarter than the vehicle itself? As we move toward the era of smart everything, hundreds of entities in a vehicle that communicate with each other, the vehicle and external systems create a need for identity orchestration so that all entities work as a conglomerate. Much like an orchestra without a conductor, without the ability to secure, control, and connect the link between a vehicle’s head unit, devices, and systems and to manage the ...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Everyone knows that truly innovative companies learn as they go along, pushing boundaries in response to market changes and demands. What's more of a mystery is how to balance innovation on a fresh platform built from scratch with the legacy tech stack, product suite and customers that continue to serve as the business' foundation. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, discussed why and how ReadyTalk diverted from healthy revenue and mor...
"Qosmos has launched L7Viewer, a network traffic analysis tool, so it analyzes all the traffic between the virtual machine and the data center and the virtual machine and the external world," stated Sebastien Synold, Product Line Manager at Qosmos, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"We are a modern development application platform and we have a suite of products that allow you to application release automation, we do version control, and we do application life cycle management," explained Flint Brenton, CEO of CollabNet, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...