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 his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
SYS-CON Events announced today that Twistlock, the leading provider of cloud container security solutions, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Twistlock is the industry's first enterprise security suite for container security. Twistlock's technology addresses risks on the host and within the application of the container, enabling enterprises to consistently enforce security policies, monitor...
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound e...
Automation is enabling enterprises to design, deploy, and manage more complex, hybrid cloud environments. Yet the people who manage these environments must be trained in and understanding these environments better than ever before. A new era of analytics and cognitive computing is adding intelligence, but also more complexity, to these cloud environments. How smart is your cloud? How smart should it be? In this power panel at 20th Cloud Expo, moderated by Conference Chair Roger Strukhoff, pane...
The goal of Continuous Testing is to shift testing left to find defects earlier and release software faster. This can be achieved by integrating a set of open source functional and performance testing tools in the early stages of your software delivery lifecycle. There is one process that binds all application delivery stages together into one well-orchestrated machine: Continuous Testing. Continuous Testing is the conveyor belt between the Software Factory and production stages. Artifacts are ...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across supply chain networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost and time for product recall as well as advance trade. Are you curious about Blockchain and how it can provide you with new opportunities for innovation and growth? In her session at 20th Cloud Exp...
@ThingsExpo has been named the Most Influential ‘Smart Cities - IIoT' Account and @BigDataExpo has been named fourteenth by Right Relevance (RR), which provides curated information and intelligence on approximately 50,000 topics. In addition, Right Relevance provides an Insights offering that combines the above Topics and Influencers information with real time conversations to provide actionable intelligence with visualizations to enable decision making. The Insights service is applicable to eve...
SYS-CON Events announced today that Grape Up will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company specializing in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the U.S. and Europe, Grape Up works with a variety of customers from emergi...
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
Developers want to create better apps faster. Static clouds are giving way to scalable systems, with dynamic resource allocation and application monitoring. You won't hear that chant from users on any picket line, but helping developers to create better apps faster is the mission of Lee Atchison, principal cloud architect and advocate at New Relic Inc., based in San Francisco. His singular job is to understand and drive the industry in the areas of cloud architecture, microservices, scalability ...
Back in February of 2017, Andrew Clay Schafer of Pivotal tweeted the following: “seriously tho, the whole software industry is stuck on deployment when we desperately need architecture and telemetry.” Intrigue in a 140 characters. For me, I hear Andrew saying, “we’re jumping to step 5 before we’ve successfully completed steps 1-4.”
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTred processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.