An anonymous director reports
CANACOL ENERGY LTD. PROVIDES COLOMBIA DRILLING AND ECUADOR UPDATE
Canacol Energy Ltd. has provided the following updates for the Toronja 1 and Pumara 1 exploration wells, the 40-million-standard-cubic-foot-per-day gas pipeline project and an update concerning its Ecuadorian operation.
Toronja 1 gas exploration well
VIM 21 exploration and production contract, Lower Magdalena basin
CNE Oil and Gas SAS, 100-per-cent operated working interest
The Toronja 1 exploration well was spudded on May 28, 2017, and reached a total depth of 7,200 feet measured depth in six days, representing a new gas well drilling record for the corporation. Excellent gas shows were encountered while drilling though the primary Porquero sandstone reservoir target, as well within the secondary Cienega de Oro sandstone reservoir target. The corporation is currently in the process of casing the well in preparation of flow testing the gas-bearing reservoirs, and will provide an update when test results become available.
Pumara 1 oil exploration well
LLA 23 exploration and production contract, Llanos basin
CNE Oil and Gas SAS, 100-per-cent operated working interest
The Pumara 1 exploration well was spudded on March 31, 2017, and reached a total depth of 10,713 feet md in 20 days. Two potential oil-bearing zones in the Gacheta A and Gacheta D were tested using an electrosubmersible pump, with both zones producing uneconomic quantities of oil. The well will be plugged and abandoned, fulfilling the corporation's exploration drilling commitment on the LLA23 block for 2017.
Pandereta 1 gas exploration well
VIM 5 exploration and production contract
CNE Oil and Gas SAS, 100-per-cent operated working interest
The Pandereta prospect is located approximately 11 kilometres to the northeast of the Clarinete and Oboe fields on the VIM 5 contract. The objectives of the Pandereta 1 exploration well are proven gas-filled sandstones of the CDO reservoir. The well will spud in early October, 2017, and is expected to be drilled and tested within five weeks of spud.
Gas pipeline project
In May, 2017, the SPV placed the orders for 82 km of tubulars and two compression stations, all of which will be delivered to Colombia in early August, 2017. The SPV has negotiated approximately 40 per cent of the right-of-way and anticipates that physical construction of the pipeline will commence in late August, 2017, with pressure testing of the pipeline and acceptance of the compression stations anticipated in mid-November, 2017. Full production of 40 million standard cubic feet per day through the pipeline is anticipated to commence on Dec. 1, 2017, lifting corporate gas production to approximately 130 million standard cubic feet per day.
Ecuador corporate update
Canacol is pleased to announce that its Ecuador consortium, operating as Pardaliservices SA, 25 per cent owned by Canacol Energy, has recently sold part of its previously disclosed government of Ecuador bonds for proceeds of $53-million (U.S.) ($13.5-million (U.S.) net to Canacol). The bonds sold represent approximately half of the bonds owned by the consortium, and of the $13.5-million (U.S.) of proceeds received by Canacol, approximately $8.3-million (U.S.) will go into treasury with the remainder used to finance continuing Ecuadorian production operations which are currently netting Canacol 1,700 barrels of oil per day. Continuing cash flow from operations, combined with the possibility of further bond sales, will allow for periodic cash distributions to Canacol as well as financing continuing Ecuadorean operations.
The corporation shall provide updates on the exploration drilling program as information becomes available.
Canacol is an exploration and production company with operations focused in Colombia, Ecuador and Mexico.
We seek Safe Harbor.
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