An anonymous director reports

CANACOL ENERGY LTD. TESTS MONO CAPUCHINO 1ST EXPLORATION WELL AT 1,013 BOPD; SPUDS THE CANAHUATE 1 GAS AND PUMARA 1 OIL EXPLORATION WELLS

Canacol Energy Ltd. has provided an update on the Mono Capuchino first exploration well and the corporation's drilling program.

Mono Capuchino first exploration well, VMM2 exploration and exploitation (E&P) contract, Middle Magdalena Valley basin, Colombia (CNE Oil and Gas SAS, operator with 66.9-per-cent working interest, and Vetra Exploracion y Produccion Colombia SA, partner with 33.1-per-cent WI)

The Mono Capuchino 1 exploration well was spudded on Dec. 17, 2016, reaching a total depth of 10,023 feet measured depth before experiencing mechanical difficulties that required the well to be sidetracked. The Mono Capuchino 1 reached a total depth of 10,245 feet md within the La Luna formation on Feb. 22, 2017. The well encountered approximately 103 feet of net oil pay within the Tertiary Basal Lisama sandstone reservoir, with average porosity of 22 per cent, and approximately 406 feet of net oil pay within the Cretaceous La Luna formation, which consists of shales and limestones with average porosity of 15 per cent and open fractures visible on image logs.

The Lisama sandstone reservoir interval was perforated between 5,691 and 5,884 feet md and flowed at a final stabilized rate at 1,013 barrels of oil per day of 18-degree API oil, 70 barrels of water per day and 300,000 standard cubic feet per day of gas using a jet pump, with an injection pressure of 3,000 pounds per square inch over a 34-hour test period. The composition of the produced water indicates that it is power fluid for the jet pump and trace amounts of filtrate related to the drilling process and not formation water. Approximately 769 feet of open hole section within the La Luna was tested and recovered uncommercial heavy oil.

The Mono Capuchino 1 well will be tied into the permanent production facilities located at Mono Arana and brought on full-time production within the next 60 days.

2017 near-term drilling program, Canahuate 1 exploration well, Esperanza E&P contract, Middle Magdalena Valley basin, Colombia (CNE Oil and Gas SAS, operator, 100-per-cent WI)

The Canahuate 1 exploration well was spudded on March 24, 2017. The Canahuate 1 well is located three kilometres north of the corporation's Jobo gas processing facility and is targeting gas-bearing sandstones within the Cienaga de Oro reservoir. Over the past three years, six of the seven exploration wells drilled by the corporation on its gas blocks, including the Esperanza E&P contract, have resulted in commercial gas discoveries. The Canahuate 1 well will take approximately six weeks to drill and test.

Pumara 1 exploration well, LLA23 E&P contract, Llanos basin, Colombia (CNE Oil and Gas SAS, operator, 91-per-cent WI)

The corporation plans to spud the Pumara 1 exploration on March 31, 2017. The Pumara 1 exploration is located three km north of the Labrador field and is targeting light-oil-bearing reservoirs within the proven and producing C7, Mirador, Gacheta and Ubaque reservoirs. Over the past four years, five of the six exploration wells drilled by the corporation on the LLA23 contract have resulted in commercial producing light oil discoveries. The Pumara 1 well will take approximately five weeks to drill and test, and, if successful, will be placed on permanent production via the corporation's oil processing facilities located at Pointer.

Canacol is an exploration and production company with operations in Colombia, Ecuador and Mexico.

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