An anonymous director reports

CANACOL ENERGY LTD. PROVIDES GAS SALES AND DRILLING UPDATE

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

September gas sales of 161 MMscfpd (million standard cubic feet per day)

Realized contractual natural gas sales (which are gas produced, delivered and paid for) were 161 million standard cubic feet per day for September, 2023. Average realized contractual natural gas sales for the month of October, 2023 to date are 162 MMscfpd, with current contractual natural gas sales as of Oct. 9, 2023, being 180 MMscfpd of gas.

Realized contractual natural gas sales for the third quarter of 2023 averaged 178 MMscfpd, down slightly from the 185 MMscfpd and 186 MMscfpd reported in the second and first quarters, respectively. Preliminary adjusted EBITDAX (earnings before interest, taxes, depreciation/depletion, amortization and exploration) for the third quarter is estimated to be $61-million, and in line with the $60.7-million and $60.9-million reported in the second and first quarters, respectively.

Commencing the second week of August, 2023, the corporation experienced unusual and unexpected production capacity restrictions at some of its gas fields, as a result of issues at the Jobo gas treatment facility, as well as certain of its producing wells. As a result of the foregoing, the corporation has had to restrict gas deliveries under certain supply contracts dedicated to supplying non-essential gas demand, all in accordance with applicable Colombian regulations and in consultation with the relevant authorities. The corporation is presently working on remediating this short-term disruption and expects to have production back to normal levels shortly. The corporation anticipates that it will be able to make up lost sales volumes by year-end, and meet its average production and financial targets, and therefore does not expect this situation to have a material impact on its operations and results.

Near-term drilling program

The corporation completed the drilling of the Aguas Vivas 4 development well on Sept. 16, 2023, encountering 357 feet (ft) true vertical depth (TVD) of net gas pay within the main Cienaga de Oro sandstone (CDO) target. The well was tied into permanent production and has been on production since Sept. 26, 2023.

The corporation completed the drilling of the Clarinete 9 development well on Oct. 5, 2023. The well encountered 236 ft TVD of net gas pay within the CDO sandstone reservoir, and is currently being cased and completed prior to tying into the permanent production facility by Oct. 24, 2023.

The corporation completed the drilling of the Fresa 2 appraisal well targeting sandstones of the upper CDO sandstone reservoir that are productive in the offsetting Fresa 1 exploration well drilled in 2021. Fresa 2 encountered 10 ft TVD of net gas pay within the upper CDO target. The corporation is scheduled to complete and tie in the Fresa 2 well in November, 2023.

The corporation is currently drilling the Pandereta 9 and Nelson 15 development wells, both targeting infill drilling locations within the respective producing fields. The corporation plans to have both wells tied in and on production prior to the end of October, 2023.

About Canacol Energy Ltd.

Canacol is a natural gas exploration and production company with operations focused in Colombia.

We seek Safe Harbor.