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Energy Summary for Dec. 19, 2014

2014-12-19 20:12 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for January delivery added $2.41 to $56.52 on the New York Merc, while Brent for February added $2.11 to $61.38 (all figures in this para U.S.). Western Canadian Select traded at a discount of $16.25 to WTI ($40.27), down from a discount of $16. Natural gas for January lost 17.8 cents to $3.46. The TSX energy index added 7.63 points to close at 226.30.

Canacol Energy Ltd. (CNE) had a great day, adding 83 cents to $2.79 on 6.29 million shares. It is expanding its gas position in the Lower Magdalena basin of Colombia. For $29.5-million (U.S.) and a royalty, it will acquire the VIM 5 and VIM 19 projects, which are right next to its "money printer" Esperanza gas project. Canacol is one of few companies actively looking for gas in Colombia. It is mainly oily at the moment, but it plans to quadruple its gas business over the next year, with the goal of selling over 14,500 barrels of oil equivalent a day (83 million cubic feet of gas a day) from Esperanza by next December, compared with about 3,300 barrels a day now. Canacol hopes that VIM 5 and 19 will prove as successful as Esperanza based on the results of the Clarinete 1 exploration well, which recently hit 149 feet of potential gas pay from the same producing reservoir as at Esperanza. The company plans to test Clarinete 1 in January. Around the same time, it plans to start developing the Palmer discovery at Esperanza, which it made through the Palmer 1 exploration well in August. The Palmer 1 well, which hit 87 feet of gas pay and tested at 2,730 barrels a day, was the first of three planned exploration wells at Esperanza this year. The second one (Corozo 1) was spudded in early October and was supposed to have results in early November, and the third (Canandonga 1) was scheduled for spudding in early December. Canacol has not provided any updates on either of those. That is not a good sign. If indeed those wells are failures, the VIM 5 and 19 acquisition is a good distraction.

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