An anonymous director reports

CANACOL ENERGY LTD. REPORTS AN 8% INCREASE IN NETBACK AND AN ADJUSTED EBITDAX OF $61 MILLION IN Q2 2023

Canacol Energy Ltd. has released its financial and operating results for the three and six months ended June 30, 2023. Dollar amounts are expressed in United States dollars, with the exception of Canadian dollar unit prices where indicated and otherwise noted.

Highlights for the three and six months ended June 30, 2023

• Adjusted EBITDAX increased 10 per cent and 16 per cent to $60.7-million and $121.6-million for the three and six months ended June 30, 2023, respectively, compared with $55.2-million and $104.8-million for the same periods in 2022, respectively.
• The corporation's natural gas and LNG operating netback increased 8 per cent and 9 per cent to $3.94 per Mcf (thousand cubic feet) and $3.97 per Mcf, for the three and six months ended June 30, 2023, respectively, compared with $3.66 per Mcf and $3.63 per Mcf for the same periods in 2022, respectively. The increase is mainly due to an increase in average sales prices, net of royalties and transportation expenses.
• Total revenues, net of royalties and transportation expenses, increased 6 per cent and 9 per cent to $74.6-million and $148.5-million for the three and six months ended June 30, 2023, respectively, compared with $70.3-million and $136.1-million for the same periods in 2022, respectively, mainly due to higher average sales price, net of transportation expenses.
• Realized contractual natural gas sales volume decreased 2 per cent to 184.8 MMcfpd (million cubic feet per day) for the three months ended June 30, 2023, compared with 188.0 MMcfpd for the same period in 2022. The decrease is mainly due to a decrease in spot sales, offset by gas sales to Tesorito. For the six months ended June 30, 2023, realized contractual natural gas sales volume increased slightly to 185.2 MMcfpd, compared with 184.9 MMcfpd for the same period in 2022.
• Adjusted funds from operations decreased 14 per cent and 9 per cent to $33.7-million and $66.4-million for the three and six months ended June 30, 2023, respectively, compared with $39.1-million and $72.9-million for the same periods in 2022, respectively, mainly due to an increase in current tax expense, offset by an increase in total revenue, net of royalties and transportation expenses.
• The corporation realized net income of $40-million and $56.9-million for the three and six months ended June 30, 2023, respectively, compared with a net loss of $6.4-million and net income of $18-million for the same periods in 2022, respectively.
• Net cash capital expenditures for the three and six months ended June 30, 2023, was $52-million and $99.1-million, respectively.
• As at June 30, 2023, the corporation had $38.9-million in cash and cash equivalents and $8.7-million in working capital surplus.

Outlook

For the remainder 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 2P 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, allowing Canacol to increase gas sales to over 300 MMcfpd; 4) continuing to return capital to shareholders; and 5) continuing with the company's commitment of strengthening its environmental, social and governance strategy.

This press release should be read in conjunction with the corporation's interim condensed consolidated financial statements and related management's discussion and analysis (MD&A). The corporation has filed its interim condensed consolidated financial statements and related MD&A as at and for the three and six months ended June 30, 2023, with Canadian securities regulatory authorities. These filings are available for review on SEDAR.

About Canacol Energy Ltd.

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

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