CALGARY, Alberta, March 21, 2023 (GLOBE NEWSWIRE) -- Canacol Energy Ltd. (“Canacol” or the “Corporation”) (TSX:CNE; OTCQX:CNNEF; BVC:CNEC) is pleased to report its conventional natural gas and light/medium crude oil reserves for the fiscal year end December 31, 2022. The Corporation’s conventional natural gas reserves are located in the Lower Magdalena Valley basin, Colombia. Newly discovered light/medium crude oil reserves are located in the Middle Magdalena Valley basin, Colombia.

Canacol Energy Ltd Gross Conventional Natural Gas and Light/Medium Crude Oil Reserves Summary⁽¹⁾⁽⁵⁾

Highlights

Conventional Natural Gas and Light/Medium Crude Oil Proved + Probable Reserves (“2P”):

• Increased by 7.5% since December 31, 2021, totaling 652 billion standard cubic feet equivalent (“Bcfe”) at December 31, 2022, with a before tax value discounted at 10% of US$1.9 billion, representing both CAD$76.67 per share of reserve value, and CAD$53.79 per share of 2P net asset value (net of US$578.2 million of net debt)
• Reserve replacement of 169% based on calendar 2022 conventional natural gas and light/medium crude oil reserve additions of 79.5 Bcf and 5.7 MMBbls, respectively, totaling 112 Bcfe
• 2P Finding and Development Cost (“F&D”) of US$1.87 / Mcfe for the three-year period ending December 31, 2022
• Recycle ratio of 1.7x for the year ended December 31, 2022 (calculated based on the natural gas netback of US$3.68 / Mcf for the year ended December 31, 2022)
• Recycle ratio of 1.9x for the three-year period ending December 31, 2022 (calculated based on the weighted average natural gas netback of US$3.55 / Mcf for the years ended December 31, 2022, 2021 and 2020)
• Reserves life index (“RLI”) of 10.0 years based on annualized fourth quarter 2022 conventional natural gas production of 177,985 thousand standard cubic feet per day (“Mscfpd”) or 31,225 barrels of oil equivalent per day (“BOEPD”)
• RLI of 8.7 years based on conventional natural gas production guidance of 206,000 Mcfpd for calendar 2023 (high end 2023 production guidance as announced December 20, 2022)

Conventional Natural Gas and Light/Medium Crude Oil Total Proved Reserves (“1P”):

• Decreased by 7.9% since December 31, 2021, totaling 339 Bcfe at December 31, 2022, with a before tax value discounted at 10% of US$1.0 billion, representing both CAD$39.32 per share of reserve value, and CAD$16.43 per share of 1P net asset value (net of US$578.2 million of net debt)
• Reserve replacement of 56% based on calendar 2022 conventional natural gas and light/medium crude oil reserve additions of 31.5 Bcf and 1.0 MMBbls, respectively, totaling 37 Bcfe
• Concurrent drilling operations through to year end resulted in discoveries at Chimela on the VMM45 block, Saxofon on the VIM5 block, and Dividivi on the VIM33 block. However, by the December 31, 2022 effective date of the report, limited production testing could occur impacting 1P reserve bookings.
• 1P F&D of US$2.60 / Mcfe for the three-year period ending December 31, 2022
• RLI of 5.2 years based on annualized fourth quarter 2022 conventional natural gas production of 177,985 Mcfpd or 31,225 BOEPD
• RLI of 4.5 years based on conventional natural gas production guidance of 206,000 Mcfpd for calendar 2023 (high end 2023 production guidance as announced December 20, 2022)

Conventional Natural Gas and Light/Medium Crude Oil Total Proved + Probable + Possible Reserves (“3P”):

• Increased by 14.3% since December 31, 2021, totaling 1,088 Bcfe at December 31, 2022, with a before tax value discounted at 10% of US$3.1 billion, representing both CAD$124.36 per share of reserve value, and CAD$101.48 per share of 3P net asset value (net of US$578.2 million of net debt)
• Reserve replacement of 304% based on calendar 2022 conventional natural gas and light/medium crude oil reserve additions of 124.8 Bcf and 13.6 MMBbls, respectively, totaling 202 Bcfe.
• 3P F&D of US$1.05 / Mcf for the three-year period ending December 31, 2022
• RLI of 16.8 years based on annualized fourth quarter 2022 conventional natural gas production of 177,985 Mcfpd or 31,225 BOEPD
• RLI of 14.5 years based on conventional natural gas production guidance of 206,000 Mcfpd for calendar 2023 (high end 2023 production guidance as announced December 20, 2022)
  

Ravi Sharma, COO said “We are pleased to report our 2022 year-end reserves. We achieved a 2P Reserve Replacement Ratio of 169%, demonstrating organic growth in both our traditional core area in the Lower Magdalena Valley Basin and a new area of focus in the Middle Magdalena Valley Basin. Over the past decade, we have added more than 880 BCF of 2P conventional natural gas reserves from success in 35 out of 41 drilled exploration wells resulting in a 22% Compound Annual Growth Rate (“CAGR”) in 2P conventional natural gas reserves. With our exploration focused drilling campaign in 2023 and a portfolio of 178 identified prospects and leads containing mean unrisked prospective conventional natural gas resources of 20.5 trillion cubic feet, according to our 2021 third party resource report, we anticipate many more years of successful exploration drilling. Our 2023 work program will also test, appraise and tie in recent discoveries, and bring multiple currently non-producing wells back into production.”

Discussion of Year Ended December 31, 2022 Reserves Report

During the year ended December 31, 2022, the Corporation recorded increases in certain reserve categories due to discoveries at Alboka, Claxon, Saxofon, and Manchego on the VIM5 block, Canaflecha-2 on the Esperanza block, Carambolo and Cornamusa on the VIM21 block, Chimela (oil) on the VMM45 block, Dividivi on the VIM33 block, and Chinu on the SSJN7 block. All aforementioned additions are in the Lower Magdalena Valley basin except Chimela, which is in the Middle Magdalena Valley basin. Positive technical revisions were associated primarily with Clarinete, Pandereta, and Siku on the VIM5 block, San Marcos on the Esperanza block, and Aguas Vivas on the VIM21 block. Negative technical revisions were associated primarily with Chirimia on the VIM5 block and Toronja on the VIM21 block.

The following tables summarize information from the independent reserves report prepared by Boury Global Energy Consultants Ltd. (“BGEC”) effective December 31, 2022 (the “BGEC 2022 report”). The BGEC 2022 report covers 100% of the Corporation’s conventional natural gas and light/medium oil reserves.

The BGEC 2022 report was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and National Instrument NI 51-101, Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Additional reserve information as required under NI 51-101 is included in the Corporation’s Annual Information Form, which will be filed on SEDAR by March 31, 2023.

Canacol Gross Natural Gas and Light/Medium Crude Oil Reserves for the Year Ended December 31, 2022⁽¹⁾

5-Year Gas and Oil Price Forecasts – BGEC Report December 31, 2022⁽¹⁾

Conventional Natural Gas and Light/Medium Crude Oil Reserves Net Present Value Before & After Tax Summary⁽¹⁾

Reserve Life Index (“RLI”)⁽¹⁾⁽²⁾

Year Ended December 31, 2022 Canacol Gross Reserves Reconciliation ⁽¹⁾

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