Canacol Posts 169 Percent RRR for Proved, Probable Reserves

Canacol Energy Ltd. reported Tuesday a reserve-replacement ratio (RRR) of 169 percent for proved and probable light/medium crude oil and conventional natural gas at the end of 2022, with 7.5 percent more reserves from a year ago.

The Canadian company that operates in Colombia said its conventional gas reserves are in the Lower Magdalena Valley (VIM) basin in the South American country while its newly-discovered light/medium petroleum reserves are in the Middle Magdalena Valley (VMM) basin.

Canacol’s gross reserves of both kinds totaled 652.5 billion standard cubic feet equivalent (Bcfe) as of December 31, up 7.5 percent year on year and “with a before tax value discounted at 10 percent of $1.9 billion”, the corporation said in a press release. Proved reserves of both kinds stood at 339.2 Bcfe.

The oil equivalent for proved reserves was 59.5 million barrels and that of proved and probable reserves was 114.5 million barrels.

The company’s gross proved and probable reserves of light/medium crude oil and natural gas stood at 652,466 million cfe (MMcfe) at the end of 2022, up from 606,855 from December 31, 2021. But its proved reserves for both kinds fell to 339,243 MMcfe from 368,366 MMcfe, according to the announcement.

Canacol did not provide production figures for oil in 2022, only saying it had an output of 66,483 MMcfe of conventional natural gas and 11.664 million barrels of oil equivalent for the year. It said it will announce full financial results for last year on March 27.

“Over the past decade, we have added more than 880 BCF [billion cubic feet] of 2P [proved and probable] conventional natural gas reserves from success in 35 out of 41 drilled exploration wells resulting in a 22 percent Compound Annual Growth Rate (“CAGR”) in 2P conventional natural gas reserves”, said Canacol chief operations officer Ravi Sharma.

“With our exploration focused drilling campaign in 2023 and a portfolio of 178 identified prospects and leads containing mean unrisked prospective conventional natural gas resources of 20.5 trillion cubic feet, according to our 2021 third party resource report, we anticipate many more years of successful exploration drilling”.

“Our 2023 work program will also test, appraise and tie in recent discoveries, and bring multiple currently non-producing wells back into production”.

Canacol said it had made discoveries last year in Colombian blocks Esperanza, SSJN7, VIM5, VIM21, VIM33 and VMM45.

The corporation added it had net capital expenditures, or spending on fixed assets, of $151.443 million in 2022 and $321.907 million in the last three years.

Canacol is listed in Canada, Colombia and the U.S. It declared March 16 a dividend of $0.19 (CAD 0.26) per share, “payable on April 17, 2023, to shareholders of record at the close of business on March 31, 2023”.

Canacol earlier reported it had sold 191 MMcf per day of gas in February and said digging at its Natilla 1ST well could be completed in the second quarter.

“The Natilla 1ST is targeting gas charged sands of the Porquero and Cienaga de Oro reservoirs [in Colombia]”, Canacol said in a press release March 2. “The Corporation anticipates the well will take approximately 6 more weeks to drill, complete, and test”.

To contact the author, email jov.onsat@gmail.com

Photo Credit – iStock.com/Dragon Claws