An anonymous director reports

CANACOL ENERGY LTD. REPORTS A 12 per cent INCREASE IN NETBACK AND AN ADJUSTED EBITDAX OF $61 MILLION IN Q1 2023

Canacol Energy Ltd. has released its financial and operating results for the three months ended March 31, 2023. Dollar amounts are expressed in U.S. dollars, with the exception of Canadian-dollar unit prices where indicated and otherwise noted.

Highlights for the three months ended March 31, 2023:

• Adjusted EBITDAX (earnings before interest, depreciation, amortization and exploration) increased 23 per cent to $60.9-million for the three months ended March 31, 2023, compared with $49.6-million for the same period in 2022.
• The corporation's natural gas and liquefied natural gas operating netback increased 12 per cent to $4.01 per thousand cubic feet for the three months ended March 31, 2023, compared with $3.58 per Mcf for the same period in 2022. The increase is mainly due to an increase in average sales prices, net of transportation expenses, and a decrease in operating expenses, partially offset by an increase in royalties.
• Realized contractual natural gas sales volume increased 2 per cent to 185.6 million cubic feet per day for the three months ended March 31, 2023, compared with 181.8 MMcfpd for the same period in 2022. The increase is mainly due to gas sales to Tesorito, partially offset by a decrease in interruptible sales.
• Total revenues, net of royalties and transportation expenses, for the three months ended March 31, 2023, increased 12 per cent to $73.9-million, compared with $65.9-million for the same period in 2022, mainly due to higher natural gas and LNG sales volume, as well as higher average sales price, net of transportation expenses.
• Adjusted funds from operations decreased 3 per cent to $32.7-million for the three months ended March 31, 2023, compared with $33.8-million for the same period in 2022, mainly due to an increase in current income tax expense, offset by an increase in total revenue, net of royalties and transportation expenses, and a decrease in operating expenses.
• The corporation realized net income of $16.9-million for the three months ended March 31, 2023, compared with net income of $24.4-million for the same period in 2022.
• Net cash capital expenditures for the three months ended March 31, 2023, were $47.1-million.
• As at March 31, 2023, the corporation had $72.1-million in cash and cash equivalents and $22.7-million in working capital deficit.

Outlook

For the rest of 2023, the corporation is focused on the following objectives: (1) the drilling of up to 10 exploration and appraisal wells in a continuous program targeting a proven plus probable reserves replacement ratio of more than 200 per cent; (2) the acquisition of 282 square kilometres of 3-D seismic on the VIM-5 block to expand the corporation's exploration prospect inventory; (3) progressing the new gas pipeline project from Jobo to Medellin, which will add 100 MMcfpd of new gas sales to the interior in late 2024, allowing Canacol Energy to increase gas sales to over 300 MMcfpd; (4) continuing to return capital to shareholders; and (5) continuing with its commitment of strengthening its environmental, social and governance strategy and reporting with the objective of improving the corporation's ranking on various sustainability indices.

This press release should be read in conjunction with the corporation's interim condensed consolidated financial statements and related management's discussion and analysis. The corporation has filed its interim condensed consolidated financial statements and related management's discussion and analysis as at and for the three months ended March 31, 2023, with Canadian securities regulatory authorities. These filings are available for review on SEDAR.

Canacol Energy is a natural gas exploration and production company with operations focused on Colombia. The corporation's shares are traded on the Toronto Stock Exchange under the symbol CNE, on the OTCQX in the United States under the symbol CNNEF and on the Bolsa de Valores de Colombia under the symbol CNEC.

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