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Canacol Energy Ltd T.CNE

Alternate Symbol(s):  CNNEF

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 and VIM-21 blocks located in the Lower Magdalena Valley basin in Colombia. The Company’s 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. It operates over 1.5 million net acres in 14 exploration and production contracts in Colombia, with 11 of these contracts focused on exploring for and developing natural gas. These blocks are all located in the Lower & Middle Magdalena Basins of Colombia.


TSX:CNE - Post by User

Bullboard Posts
Comment by practicalguyon Sep 12, 2014 12:32am
155 Views
Post# 22929560

RE:Practicalguy....

RE:Practicalguy....I don't know what it will do to the price in the short term, but in the longer term, what they are doing with the gas is amazing.

Here is my 2016 valuation.

Current (most recent quarter, 12 mboed) gives cashflow of $140 mm/yr.  5 times cashflow gives an EV of about $700 mm, or $6.10 per share.

Incremental oil production of 6000 bopd, with a $60 netback gives another $130 mm in cashflow.

incremental gas production also gives $130 mm in cashflow.

Altogether it's makes $400 mm in cashflow, or between $1.6 and $2 bb EV.

Since there are a lot of short term investors, there are a lot that won't care what is happening in 13 months, so there is a cap in the short term on this news.  The nice thing is that CNE, if the gas is not priced in by next summer, will be an easy buy and hold
Bullboard Posts