Mr. Ravi Sharma reports

CANACOL ENERGY LTD. ANNOUNCES 2P RESERVES AND DEEMED VOLUMES OF 607 BCFE WORTH US$2.1B BTAX AND 10 YEAR RESERVE LIFE INDEX

Canacol Energy Ltd. has released its conventional natural gas, light, medium and heavy crude oil reserves, and deemed volumes for the fiscal year ended Dec. 31, 2023. The corporation's conventional natural gas reserves are located in the Lower Magdalena Valley basin, Colombia. Canacol has light and medium crude oil reserves located in the Middle Magdalena Valley basin, Colombia, and light, medium and heavy crude oil reserves, and deemed volumes in the Llanos basin, Colombia.

Highlights

Conventional natural gas and light/medium/heavy crude oil proved plus probable reserves and deemed volumes (2P):

• 2P before tax NPV-10 (net present value, 10-per-cent discount rate) of $2.1-billion (U.S.) at Dec. 31, 2023, a 10-per-cent increase over the prior year value of $1.9-billion (U.S.) at Dec. 31, 2022.
• 2P after tax NPV-10 of $1.8-billion (U.S.) at Dec. 31, 2023, a 34-per-cent increase over the prior-year value of $1.3-billion (U.S.) at Dec. 31, 2022. The significant increase in after-tax 2P values is primarily impacted by the corporation's restructuring in the fourth quarter of 2022, the results of which are first incorporated in this year's reserve report.
• Decreased by 6.9 per cent since Dec. 31, 2022, totalling 607 billion standard cubic feet equivalent (Bcfe) at Dec. 31, 2023, with a before-tax value discounted at 10 per cent of $2.1-billion (U.S.), representing both $82.62 (Canadian) per share of reserve value, and $54.63 (Canadian) per share of 2P net asset value (net of $723.5-million (U.S.) of net debt).
• Reserve replacement of 31 per cent based on calendar 2023 conventional natural gas, light/medium/heavy crude oil reserve, and deemed volume additions of 15.9 Bcf (billion cubic feet), 0.5 MMBbl (million barrels) and 0.2 MMBbl, respectively, totalling 20 Bcfe (billion cubic feet equivalent).
• 2P finding and development cost (F&D) of $3.17 (U.S.)/Mcfe for the three-year period ending Dec. 31, 2023.
• Recycle ratio of 0.4 times for the year ended Dec. 31, 2023 (calculated based on the natural gas netback of $4.11 (U.S.)/Mcf for the year ended Dec. 31, 2023).
• Recycle ratio of 1.2 times for the three-year period ending Dec. 31, 2023 (calculated based on the weighted average natural gas netback of $3.73 (U.S.)/Mcf for the years ended Dec. 31, 2023, 2022 and 2021).
• Reserves life index (RLI) of 9.9 years based on annualized fourth quarter 2023 conventional natural gas production of 168,127 thousand standard cubic feet per day (Mscfpd) or 29,496 barrels of oil equivalent per day (BOEPD).
• RLI of 9.4 years based on conventional natural gas production guidance of 177,000 Mcfpd for calendar 2024 (high-end 2024 production guidance as announced Feb. 5, 2024).

Conventional natural gas and light/medium/heavy crude oil total proved reserves and deemed volumes (1P):

• Decreased by 13.0 per cent since Dec. 31, 2022, totalling 295 Bcfe at Dec. 31, 2023, with a before-tax value discounted at 10 per cent of $1.1-billion (U.S.), representing both $43.19 (Canadian) per share of reserve value, and $15.19 (Canadian) per share of 1P net asset value (net of $723.5-million (U.S.) of net debt).
• Reserve replacement of 32 per cent based on calendar 2023 conventional natural gas, light/medium/heavy crude oil reserve and deemed volume additions of 18.2 Bcf, 0.3 MMBbl and 0.2 MMBbl, respectively, totalling 21 Bcfe.
• 1P F&D of $4.70 (U.S.)/Mcfe for the three-year period ending Dec. 31, 2023.
• RLI of 4.8 years based on annualized fourth quarter 2023 conventional natural gas production of 168,127 Mcfpd or 29,496 BOEPD.
• RLI of 4.6 years based on conventional natural gas production guidance of 177,000 Mcfpd for calendar 2024 (high-end 2024 production guidance as announced Feb. 5, 2024).

Conventional natural gas and light/medium/heavy crude oil total proved plus probable plus possible reserves and deemed volumes (3P):

• Decreased by 4.2 per cent since Dec. 31, 2022, totalling 1,043 Bcfe at Dec. 31, 2023, with a before-tax value discounted at 10 per cent of $3.2-billion (U.S.), representing both $123.86 (Canadian) per share of reserve value, and $95.86 (Canadian) per share of 3P net asset value (net of $723.5-million (U.S.) of net debt).
• Reserve replacement of 31 per cent based on calendar 2023 conventional natural gas, light/medium/heavy crude oil reserve and deemed volume additions of 13.3 Bcf and 0.8 MMBbl, and 0.3 MMBbl, respectively, totalling 20 Bcfe.
• 3P F&D of $1.83 (U.S.)/Mcf for the three-year period ending Dec. 31, 2023.
• RLI of 17.0 years based on annualized fourth quarter 2023 conventional natural gas production of 168,127 Mcfpd or 29,496 BOEPD.
• RLI of 16.1 years based on conventional natural gas production guidance of 177,000 Mcfpd for calendar 2024 (high-end 2024 production guidance as announced Feb. 5, 2024).

Ravi Sharma, chief operating officer, said: "In 2023 we added 20 Bcfe of 2P reserves and deemed volumes, an increase of 3 per cent, and added 21 Bcfe to the 1P reserve and deemed volumes for an increase of 6 per cent. Our core fields, Clarinete, Nelson, Aguas Vivas and Pandereta continue to perform well and saw increases in 1P reserves. Our 2P increases were limited due to lack of exploration success at the near field Cereza and Pina Norte prospects, and our inability to get the Natilla exploration well drilled to the target interval due to technical difficulties drilling the well and the sidetrack. As our producing fields mature we are executing development programs to increase PDP reserves by converting PDNP and PUD reserves to PDP to maintain our productive capacity and production. Our recent 3-D surveys have delineated and confirmed further prospectivity in VIM 5 and SSJN-7 that we will drill in 2024, 2025 and beyond to potentially add new production clusters and add to the over 900 BCF of 2P natural gas reserves the company has discovered since inception."

Discussion of year ended Dec. 31, 2023 reserves report

During the year ended Dec. 31, 2023, the corporation recorded increases in certain reserve categories due to discoveries at Lulo on the VIM21 block, Pina Norte on the Esperanza block, and Pistacho on the VIM5 block. All aforementioned additions are in the Lower Magdalena Valley. Positive technical revisions were associated primarily with Clarinete, Pandereta and Claxon on the VIM5 block, Chinu on the SSJN7 block due to a working interest consolidation to 100 per cent from 50 per cent, and Rancho Hermoso in the Llanos basin. Negative technical revisions were associated primarily with Fresa on the VIM21 block.

The attached tables summarize information from the independent reserves report prepared by Boury Global Energy Consultants Ltd. (BGEC) effective Dec. 31, 2023. The BGEC 2023 report covers 100 per cent of the corporation's conventional natural gas and light/medium/heavy oil reserves and deemed volumes.

The BGEC 2023 report was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (COGE Handbook) and National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities (NI 51-101). Additional reserve information as required under NI 51-101 is included in the corporation's annual information form, which will be filed on SEDAR+ by March 31, 2024.

The recovery and reserve and deemed volume estimates of conventional natural gas and light/medium/heavy crude oil are estimates only. There is no guarantee that the estimated reserves and deemed volumes will be recovered, and actual reserves of conventional natural gas and light/medium/heavy crude oil and deemed volumes may prove to be greater than, or less than, the estimates provided.

About Canacol Energy Ltd.

Canacol is a natural gas and oil 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 symbol CNE, CNNEF and CNE.C, respectively.

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