An anonymous director reports

CANACOL ENERGY LTD. PROVIDES GAS SALES AND DRILLING UPDATE AND ANNOUNCES DIVIDEND

Canacol Energy Ltd. has provided a gas sales and drilling operations update, and has declared a quarterly dividend.

November gas sales of 169 MMscfpd (million standard cubic feet per day)

Realized contractual natural gas sales (which are gas produced, delivered and paid for) were 169 million standard cubic feet per day for November, 2023.

Gas sales during the month of November were impacted by high reservoir levels and related hydroelectric power generation due to heavy rainfall which reduced the demand for gas for thermoelectric power generation. The last week of November saw a fall in reservoir levels related to less rainfall and a related increase in thermoelectrical power generation and gas consumption. Reservoir levels continue to fall into December due to lower rainfall.

The corporation expects production capacity to be approximately 180 MMscfpd exiting the month of December, 2023, following the workover of the Clarinete 4 producer and the drilling of the Nelson 16 development well.

Near-term drilling program

The corporation completed the drilling of the Pandereta 10 development well which encountered 122 feet of net gas pay within the Cienaga de Oro (CDO) sandstone reservoir. The well was tied into the Jobo facility and brought on production at the end of November.

The rig is currently drilling the Nelson 16 development well which is expected to be completed and tied in by the end of December, 2023. The corporation will then drill the Nelson 17 development well, which it expects to be completed and tied into production by the third week of January, 2024.

First ever royalty construction project completed

The Ministry of Mines and Energy Resolution 40207/2021 facilitates investments in local public projects in lieu of royalty payments to the national government. The intent is that communities benefit directly and promptly from resources extracted from within their municipalities. Project proposals are developed jointly between the corporation and local governments and then approved by the department governor.

The company is pleased to announce the completion of the first project of its kind ever signed and executed in Colombia, which consisted of the construction of a 3.8-kilometre paved road executed between the corporation and the Department of Sucre.

The signing and execution of these royalty agreements is another example of how the energy sector consistently contributes to social development, closing gaps and improving the quality of life for Colombian citizens.

Dividend announcement

Canacol Energy announced that it has declared a dividend of 26 cents per share, payable on Jan. 15, 2024, to shareholders of record at the close of business on Dec. 29, 2023. This dividend qualifies as an eligible dividend for Canadian income tax purposes. The declaration, timing, amount and payment of future dividends remain at the discretion of the board of directors.

Dividends on shares traded on the Toronto Stock Exchange (TSX) will be paid in Canadian dollars on Jan. 15, 2024.

For shareholders trading on the Colombia Stock Exchange (BVC), the Colombian peso equivalency shall be calculated based on the exchange rate as certified by the Banco de la Republica (Central Bank) on the date of monetization and will be published accordingly on the SIMEV website.

Shares traded on the Toronto Stock Exchange

Form NR301 will be mailed to registered non-resident shareholders as at the dividend record date, by Olympia Trust Company, Canacol's transfer agent. In order to receive the preferred treaty rate, you must complete and mail back the form as soon as possible. Failure to supply a completed NR301 form will result in Olympia withholding the statutory 25-per-cent withholding tax rate on any payments to registered non-resident shareholders. If you have previously completed Form NR301, you do not need to complete a new form.

Instructions on how to correctly complete the NR301 are on the back of the form. Shareholders who hold their shares through a broker should contact their broker directly. They do not need to return a form to Olympia.

Shares traded on the Colombia Stock Exchange

Dividend payments will be subject to withholding at the Canadian statutory rate of 25 per cent. Shareholders who are entitled to a reduced withholding tax rate under a tax treaty should contact their broker or nominee to submit Form NR301 (English version). Brokers should submit Form NR301 on behalf of their shareholders to Deposito Centralizado de Valores (Deceval) as soon as possible. If you have previously completed Form NR301, you do not need to complete a new form.

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 symbols CNE, CNNEF and CNEC, respectively.

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