An anonymous director reports

CANACOL ENERGY LTD. REPORTS AN 11% INCREASE IN NETBACK AND AN ADJUSTED EBITDAX OF $62 MILLION IN Q3 2023

Canacol Energy Ltd. has released its financial and operating results for the three and nine months ended Sept. 30, 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 and nine months ended Sept. 30, 2023:

• Adjusted EBITDAX (consolidated net income adjusted for interest, income taxes, depreciation, depletion, amortization, exploration expenses, and other similar non-recurring or non-cash charges) increased 11 per cent and 14 per cent to $62.1-million and $183.7-million for the three and nine months ended Sept. 30, 2023, respectively, compared with $56-million and $160.8-million for the same periods in 2022, respectively.
• The corporation's natural gas and liquefied natural gas operating netback increased 11 per cent and 10 per cent to $4.14 per thousand cubic feet and $4.03 per Mcf for the three and nine months ended Sept. 30, 2023, respectively, compared with $3.73 per Mcf and $3.66 per Mcf for the same periods in 2022, respectively. The increase is mainly due to an increase in average sales prices, net of transportation expenses, offset by an increase in operating expenses and royalties.
• Total revenues, net of royalties and transportation expenses, for the three and nine months ended Sept. 30, 2023, both increased 9 per cent to $76.6-million and $225.1-million, respectively, compared with $70.1-million and $206.3-million for the same periods in 2022, respectively, mainly due to higher average sales price, net of transportation expenses.
• Adjusted funds from operations increased 26 per cent and 3 per cent to $49-million and $115.3-million for the three and nine months ended Sept. 30, 2023, respectively, compared with $38.7-million and $111.6-million for the same periods in 2022, respectively, mainly due to an increase in EBITDAX.
• Realized contractual natural gas sales volume decreased 3 per cent and 1 per cent to 178.2 million cubic feet per day and 182.8 MMcf/d for the three and nine months ended Sept. 30, 2023, respectively, compared with 184.2 MMcf/d and 184.7 MMcf/d for the same periods in 2022, respectively. The decrease is due to the unusual and unexpected temporary decrease in the corporation's production capacity.
• The corporation realized a net loss of $500,000 and net income of $56.3-million for the three and nine months ended Sept. 30, 2023, respectively, compared with a net loss of $4.5-million and net income of $13.6-million for the same periods in 2022, respectively.
• Net cash capital expenditures for the three and nine months ended Sept. 30, 2023, were $43.8-million and $142.9-million, respectively.
• As at Sept. 30, 2023, the corporation had $48.3-million in cash and cash equivalents and $4.4-million in working capital deficit.

Outlook

For the rest of 2023, the corporation is focused on: (1) completing its development drilling program with the Nelson-16 and Pandereta-10 wells targeting productive sandstones of the CDO reservoir, which it expects will restore productive capacity beyond the approximately 185 MMcf/d that exists today; (2) advancing the Macao 3-D seismic program on the VIM-5 block, which is targeted for completion in January of 2024; (3) contracting a 3,000-horsepower drilling rig to drill the Pola-1 exploration well in the Middle Magdalena Valley basin in the first half of 2024; and (4) working toward the execution of a fourth production contract in Bolivia.

The corporation's original 2023 EBITDA (earnings before interest, taxes, depreciation and amortization) guidance was a range of $190-million to $263-million. As the first nine months of 2023, EBITDA totalled $184-million, and with anticipated favourable pricing due to El Nino for the rest of the year, the corporation expects to be near the upper end of its guidance.

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 and nine months ended Sept. 30, 2023, with Canadian securities regulatory authorities. These filings are available for review on SEDAR+.

Canacol 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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