Canacol Aims to Grow Reserve Base in 2025

Natural gas exploration and production company Canacol Energy Ltd. said it plans to drill 11 exploration wells and three development wells in the Lower Magdalena Valley Basin (LMV) as part of its 2025 plan.

The company said in a media release it expects its 2025 capital budget to be between $143 million and $160 million.

The company also said it expects its average realized contractual gas sales and oil sales in 2025 to range between 146 and 159 million cubic feet equivalent per day (MMcfpd).

“In 2025 the Corporation 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 higher impact gas exploration opportunities in the Lower and Middle Magdalena Valley Basin; iii) laying the groundwork to be able to commence operations in Bolivia in 2026 and iv) continue our commitment to our ESG strategy”, Charle Gamba, President and CEO of Canacol, said.

The company said that LMV development and exploration activities are planned to support its robust EBITDA generation and allow it to capitalize on strong gas market dynamics in 2025. The development wells include the Clarinete-11, Siku-2, and Lulo-3 wells, all of which have already been successfully drilled and brought into production, it said.

Canacol said that the Siku-2 appraisal well, within the company's wholly-owned VIM-21 contract, began production on February 12, 2025, reaching a restricted rate of 6 MMcfpd following its completion on February 3. 

The 2025 drilling plan includes 10 gas exploration wells in the LMV and one in the Middle Magdalena Valley (MMV). Notable wells in the LMV include Natilla-2 ST2, which encountered about 550 feet of interbedded sandstone and shales in the Porquero, which showed good reservoir quality based on sonic and resistivity logs.

At the Natilla-2 ST2 well on the SSJN-7 contract, also fully operated by Canacol, preparations are underway to drill a sidetrack into the Lower Porquero Formation, targeting the Cienaga de Oro (CDO) sandstone reservoir at a depth of approximately 16,500 feet. 

The Fresa-3 appraisal well, targeting the CDO sandstone on the VIM-21 contract, commenced drilling on February 17 and is expected to start production within three weeks. 

Canacol said it is mobilizing a drilling rig to the VIM-5 contract to drill the Chibigui-1 exploration well, targeting CDO sandstones, with an anticipated three-week drilling and testing period. A successful Chibigui-1 well would be connected to existing infrastructure via a 3.5-kilometer flow line.

Canacol said it has established a significant acreage position in the MMV and plans to drill the Valiente prospect this year, targeting a large shallow structure south of the Opon gas field, discovered in 1965 and developed by Amoco in 1997. The Opon field's sandstone reservoirs in the Tertiary La Paz Formation peaked at approximately 104 MMcfpd of gas and 3,790 barrels of condensate per day in 1998, producing a total of 54 billion cubic feet of gas and 1.2 million barrels of condensate. Valiente-1 is set to spud in the early fourth quarter, targeting the same productive sandstones at shallower depths, the company said.

Canacol is also continuing its efforts on the Pola exploration project in the MMV, targeting gas in Cretaceous reservoirs at depths near 17,000 feet.

In Bolivia, the corporation said it is awaiting congressional ratification of three exploration contracts (Arenales, Ovai, and Florida Este) and one redevelopment contract (Tita) to establish their effective date. Cananol said it is preparing to apply for an environmental permit for Tita and formulating development plans to begin reactivation activities in 2026.

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