Canacol Energy Ltd (Alberta) T.CNE

Alternate Symbol(s): CNNEF

Energy Oil & Gas E&P

Canacol Energy Ltd. is a Canada-based natural gas exploration and production company with operations focused on Colombia. The Company’s production primarily consists of natural gas from the Esperanza, VIM-5, VIM-21 and VIM-33 blocks located in the Lower Magdalena Valley basin in Colombia. Its production also included crude oil from its Rancho Hermoso block in Colombia (Colombia oil). It supplies approximately 17% of the country’s gas needs and more than 50% of the Caribbean Coast’s gas demand. Its gas fields which produce from the Cienaga de Oro and Porquero proven reservoirs are connected to its central Jobo gas processing and treatment facility through more than 169 kilometers of flow lines, mainly flexible steel flow lines. The Company operates over 1.5 million net acres in 11 exploration and production gas contracts in Colombia, located in the Lower & Middle Magdalena Basins. Its natural gas processing and treatment facilities consist of three plants.

TSX:CNE - Post by User

Canacol Energy Ltd (Alberta)

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Post by fisherman8on Jan 11, 2011 9:27am

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Post# 17952551

Excerpt from TD Newcrest report

Canacol Energy Ltd.
(CNE-V) C$1.54
Upgrading to BUY Target $2.00
Event

We are making several adjustments to our short-term and long-term

commodity price assumptions. The most important change for the

International E&Ps is that we have increased our long-term crude oil outlook

to a flat US$85/bbl from 2011E forward (from US$80/bbl previously), which

reflects a 6.3% increase. For complete details, please refer to our full length

Industry Bulletin to be published later today.

Reflecting this commodity update, we have increased our target price for

Canacol Energy Ltd. (CNE-V) to C$2.00 (from C$1.80) due to an increase in

our NAVPS estimates. As a result, Canacol now implies a 30% total return to

our target and we are upgrading Canacol to BUY (from Hold).

Impact
Neutral. We are not materially adjusting any of our estimates other than for
new commodity price assumptions. However, we are upgrading our
recommendation to BUY (from Hold) due to a higher implied return to target
caused by a combination of a higher target price (driven by increased oil price
assumptions) and recent share price weakness.
Details and Outlook

Exhibit 1 summarizes changes to our key estimates. The increase in our

NAVPS estimates is due to the increase in our long term crude oil

assumption.

As published on December 8 in our TD International E&P 2011 Preview, we

view Canacol as having the largest upside potential to our Fully-risked

NAVPS in our coverage from events we anticipate will occur in calendar

2011, largely due to near-term high impact exploration drilling in Guyana, to

be followed by first drilling on the company’s heavy oil acreage in H2/11.

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