An anonymous director reports

CANACOL ENERGY LTD. PROVIDES GAS SALES AND DRILLING UPDATE

Canacol Energy Ltd. has provided the following gas sales and operations update.

June gas sales of 186 million standard cubic feet per day

Realized contractual natural gas sales (which are gas produced, delivered and paid for) were 186 million standard cubic feet per day for June, 2023.

Lulo 2 -- tests 24 million standard cubic feet per day

As announced on June 6, 2023, the Lulo 2 appraisal well, located on the 100-per-cent-operated VIM21 exploration and production (E&P) contract, encountered 230 feet true vertical depth of net gas pay with average porosity of 20 per cent within the primary Cienega de Oro (CDO) sandstone reservoir. The Lulo 2 well was tied into permanent production and flow tested 24 million standard cubic feet per day.

Chimela 1 -- Basal Lisama tests 353 barrels of oil per day

As announced on Jan. 23, 2023, the Chimela 1 exploration well, located on the 100-per-cent-operated VMM45 E&P contract located in the Middle Magdalena basin, encountered 85 feet of net oil and gas pay within the Tertiary-aged Basal Lisama sandstone reservoir.

The Basal Lisama sandstone reservoir was perforated in various intervals between 13,625 and 13,694 feet measured depth and tested with a jet pump for 62 hours at an average rate of 353 barrels of oil per day of 23.6-degree API oil. The average water cut during this flow period varied between 2 per cent and 3 per cent and constant THP (tubing head pressure) of 40 pounds per square inch was maintained. The well is currently shut in for a buildup period of 20 days.

Once the pressure data have been collected, a development plan will be formulated and executed to rapidly commercialize the Chimela discovery. Chimela is located approximately seven kilometres from the Acordionero field operated by Gran Tierra Energy. The Acordionero field produces approximately 18,600 barrels of oil per day from the same reservoirs that have proved productive at Chimela.

Near-term drilling plans -- Pina Norte, Cereza and Malfadine near-field exploration wells

Canacol's near-field exploration program includes the successful Lulo discovery as well as the Pina Norte, Cereza and Malfadine prospects. The program is targeting exploration prospects located close to the Jobo production facility that can be commercialized very quickly, allowing the corporation to build productive capacity in order to meet the anticipated high demand for gas associated with the coming El Nino phenomenon.

The corporation spudded the Pina Norte 1 exploration well on its 100-per-cent-operated VIM21 E&P contract on June 26, 2023. The well is located approximately 500 metres to the west of the Jobo gas treatment facility and is targeting gas-charged reservoirs in the CDO sandstone identical to those encountered at the nearby Lulo discovery. The corporation anticipates that the well will be drilled, completed and tied into production within the next three weeks. If successful, the corporation will drill the Pina Norte 2 appraisal well immediately upon completion of the Pina Norte 1 well.

The corporation plans to spud the Cereza 1 exploration well, located on its 100-per-cent-operated VIM21 E&P contract, in early August. The well is located approximately 500 metres to the north of the Jobo production facility and is also targeting gas-charged sandstones of the CDO reservoir. The well will take approximately three weeks to drill, complete and tie into production. If successful, the corporation will immediately drill the Cereza 2 appraisal well.

The Malfadine 1 exploration well will be the next well to be drilled in the near-field exploration program, which is located approximately 1.5 kilometres to the northwest of the Jobo production facility. Malfadine 1 is also targeting gas-charged reservoirs within the CDO sandstone and will take three weeks to drill and complete. If successful, the corporation will immediately drill the Malfadine 2 and Malfadine 3 appraisal wells.

About Canacol Energy Ltd.

Canacol is a natural gas exploration and production company with operations focused in Colombia. The corporation's common stock trades on the Toronto Stock Exchange, the OTCQX in the United States and the Colombia Stock Exchange under ticker symbol CNE, CNNEF and CNEC, respectively.

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