Mr. Charle Gamba reports

CANACOL ENERGY LTD. PROVIDES 2024 CAPITAL AND GAS SALES GUIDANCE

Canacol Energy Ltd. has provided its capital and gas sales guidance for 2024. Dollar amounts are expressed in United States dollars, with the exception of Canadian-dollar unit prices where indicated and otherwise noted.

The corporation announces that its 2024 capital budget is between $138-million and $151-million. Forecast average realized contractual gas sales for 2024, which include downtime, are anticipated to range between 160 million and 177 million cubic feet per day (MMcfpd). The corporation's firm 2024 take-or-pay contracts alone average 124 MMcfpd, net of contractual downtime. The average wellhead sales price, net of transportation costs, is approximately $6.04/thousand cubic feet (Mcf) for its firm take-or-pay contracts. The average wellhead sales price (including take or pay and interruptibles volumes), net of transportation costs, is expected to average $6.59/Mcf.

Forecast interruptible sales include potential sales to the Celsia-operated Tesorito gas-fired power plant, in which the corporation holds a 10-per-cent stake. The plant operates intermittently to supply electricity to the national grid during periods of high electrical demand. When operating at full capacity the plant will consume approximately 40 million standard cubic feet per day to generate around 200 megawatts of electricity.

Corporate strategy update

Charle Gamba, president and chief executive officer of Canacol, stated: "As we previously stated, the corporation's long-term plan is focused on i) maintaining and growing our reserve base and production from our core assets in the Lower Magdalena Valley basin, targeting the full use of existing transportation infrastructure; ii) exploring high-impact exploration opportunities in the Middle Magdalena Valley basin; iii) strategic entrance into the gas market in Bolivia; and iv) continue to improve our ESG scores."

For 2024, the corporation is focused on the following objectives:

1) In line with maintaining and growing its reserves and production in its core gas assets in the Lower Magdalena Valley basin (LMV), Canacol has planned comprehensive development and exploration programs. It aims to optimize its production and increase reserves by drilling up to five development wells, install new compression and processing facilities as required, and workover operations of producing wells in its key gas fields. It will also drill four exploration wells, complete the acquisition of 249 square kilometres of 3-D seismic data to add new reserves and production and to identify new drilling prospects. These development and exploration activities are planned to support its robust EBITDA (earnings before interest, taxes, depreciation and amortization) generation and allow it to capitalize on strong market dynamics in 2024.

2) Maintaining a low cost of capital, cash liquidity and balance sheet flexibility to invest for the long term. In a year of expected, highly supportive gas market dynamics, Canacol is tactically prioritizing investments in the LMV and has therefore decided to postpone drilling of the Pola 1 exploration well located in the Middle Magdalena Valley basin to 2025.

3) Bolivia: Achieve the government's approval of a fourth exploration and production contract that covers an existing gas field reactivation, to begin development operations with a view to adding reserves and production and commencing gas sales in 2025.

4) Continue with the company's commitment to its environmental, social and governance strategy.

The 2024 capital program balances the continued development of Canacol's existing reserves to optimize its production with exploration, targeting the addition of new reserves and production.

During the first half of 2024,Canacial is planning an active development drilling and workover program, coupled with investments in additional compression and processing facilities, to ensure that sufficient productive capacity exists to meet potentially high gas demand during the first half of 2024 related to the effects of El Nino. Its development plans include the drilling of up to five new wells. The company's exploration plans include the drilling of two relatively low-risk Cienaga de Oro prospects located close to transportation infrastructure in its core producing area, and two exploration wells targeting higher-impact, slightly higher-risk prospects which have the potential to open up new production areas.

As Canacol has stated before, one of its long-term corporate objectives is to reduce debt. However, given current favourable gas market dynamics, the corporation has decided to maintain substantial investments in its key producing blocks located in the Lower Magdalena Valley basin, aimed at capitalizing on the prevailing market conditions. As a result of favourable market conditions that the company expects to help it achieve high netbacks during 2024, Canacol anticipates ending 2024 with net debt to EBITDA levels of 2.4 times to 2.8 times, which falls well below its debt covenants of 3.25 times to 3.5 times.

A 5-per-cent increase/decrease in average sales price (plus/minus 33 cents/Mcf) will have an EBITDA impact of approximately $16-million and $18-million on the low-end guidance and the high-end guidance, respectively.

The corporation will continue to evaluate the return of capital to shareholders on a quarterly basis, in accordance with the corporation's policy, aiming to achieve a balanced assessment of the corporation's strategy while being conscious of the diverse interests of the company's stakeholders.

The corporation will provide regular production and operational updates on a quarterly basis starting with the first quarter of 2024. Material changes with respect to gas sales, exploration drilling results or any other matters during the quarter will continue to be disclosed in accordance with applicable material information disclosure requirements.

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, on the OTCQX in the United States and on the Colombia Stock Exchange under ticker symbol CNE, CNNEF and CNE.C, respectively.

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