Canacol Closes Convertible Unsecured Subordinated Debenture Offering

Canacol Energy has completed the first closing of its previously announced convertible unsecured subordinated debenture offering.

Canacol, through Canaccord Capital Corporation, the sole agent in connection with the Offering (the "Agent"), issued $2,700,000 aggregate principal amount of convertible unsecured subordinate debentures (the "Debentures") in this initial closing. Each Debenture issued pursuant to the Offering is subject to a coupon interest rate of 12% per annum, payable quarterly in arrears through the issuance of common shares of the Corporation at a price equal to a 10% discount to the volume weighted average trading price of the Corporation's common shares for the 10 trading days immediately preceding the quarterly interest payment date or such higher price as any regulatory body shall require. The Debentures mature on September 4, 2011, and are convertible into common shares of the Corporation at the holder's option at a conversion price equal to $0.36 per common share. A second closing is scheduled to occur on or about September 10, 2009 with respect to the remaining $1,300,000 of the Agent's over-allotment option.

The Agent received a commission of $260,000 in respect of the first closing, which commission was paid by the issuance of 753,624 common shares of the Corporation to the Agent.

Following the completion of this initial closing of the Offering, Canacol has 181,846,841 common shares issued and outstanding. The private placement is subject to final TSX Venture Exchange acceptance.


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