Canacol Energy Reports Record PRODUCTION LEVELS 😃 T .CNE |
CALGARY, ALBERTA--(Marketwired - Nov. 10, 2016) - Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE)(OTCQX:CNNEF)(BVC:CNEC) is pleased to report its financial and operating results for the three and nine months ended September 30, 2016. Dollar amounts are expressed in United States dollars, except as otherwise noted.
"The three months ended September 30, 2016 marked yet another consecutive quarter of production growth for Canacol," reported Charle Gamba, President and CEO of Canacol. "During the third quarter, Canacol achieved record realized contractual sales volumes of 18,908 boepd, an 11% increase over the average of 17,017 boepd for the previous quarter ended June 30, 2016. Adjusted funds from operations for the three months ended September 30, 2016 increased 14% to $30.7 million from the previous quarter of $26.9 million for the three months ended June 30, 2016.
"We were also able to increase our corporate operating netbacks for the third consecutive quarter, to $25.83 per boe.
"The August, 2016 $36 million private placement allowed us to expand our gas exploration and development program by contracting a second gas rig for the remainder of 2016, and we plan to have at least one gas drilling rig running continuously well into 2017. Since this private placement, we have announced new gas discoveries at both Nispero and Trombon, which tested at 28 MMscfpd and 26 MMscfpd, respectively, and we look forward to further success at Nelson-6, Nelson-8 and Clarinete-3 which are all expected to be drilled prior to year end. We also plan to drill one oil exploration well on our VMM-2 concession in December, 2016."
Highlights for the three and nine months ended September 30, 2016
(Production is stated as working-interest before royalties)
Financial and operational highlights of the Corporation include:
Realized contractual sales volumes increased 76% and 47% to 18,908 boepd and 15,727 boepd for the three and nine months ended September 30, 2016, respectively, compared to 10,727 boepd and 10,692 boepd for the same periods in 2015, respectively, primarily due to increase in gas production in Esperanza and VIM-5 as a result of the additional sales related to the Promigas pipeline expansion.Average production volumes increased 78% and 47% to 18,632 boepd and 15,342 boepd for the three and nine months ended September 30, 2016, respectively, compared to 10,455 boepd and 10,455 boepd for the same periods in 2015, respectively, primarily due to increase in gas production in Esperanza and VIM-5 as a result of the additional sales related to the Promigas pipeline expansion. Adjusted funds from operations for the three and nine months ended September 30, 2016 increased 102% and 67% to $30.7 million and $71 million compared to the same periods in 2015, respectively. Adjusted funds from operations are inclusive of results from the Ecuador IPC. The increase in adjusted funds from operations is primarily the result of additional sales related to the Promigas pipeline expansion, reductions in production and transportation expenses and lower general and administrative expenses, offset by a decrease in benchmark crude oil prices. Total petroleum and natural gas revenues for the three and nine months ended September 30, 2016 increased 102% and 40% to $44.4 million and $106 million compared to $22 million and $75.7 million for same periods in 2015, respectively. Adjusted petroleum and natural gas revenues, inclusive of revenues related to the Ecuador Incremental Production Contract (the "Ecuador IPC") (see full discussion in MD&A), for the three and nine months ended September 30, 2016 increased 70% and 30% to $50.9 million and $125.2 million compared to $29.9 million and $96.6 million for the same periods in 2015, respectively. The increase in revenues reflects the additional sales related to the Promigas pipeline expansion, offset by a decrease in benchmark crude oil prices.General and administrative ("G&A") expenses decreased 2% and 16% to $4.8 million and $12.7 million for the three and nine months ended September 30, 2016, respectively, compared to $4.9 million and $15.2 million for the same periods in 2015, respectively. The decrease is primarily due to the Corporation's efforts to manage its G&A expenses in light of the continued weakness in benchmark crude oil.Production expenses decreased 28% and 49% to $4.6 million and $12.3 million for the three and nine months ended September 30, 2016, respectively, compared to $6.4 million and $24.1 million for the same periods in 2015, respectively, despite significant production increases in the three and nine months ended September 30, 2016 compared to the same periods in 2015. The decrease is primarily due to the Corporation's cost-cutting initiatives and lower crude oil production. The increase in natural gas production did not increase production expenses significantly as the majority of the natural gas production expenses are fixed. The Corporation had a comprehensive loss of $8.4 million and a comprehensive income of $3.3 million for the three and nine months ended September 30, 2016, respectively, compared to a comprehensive loss of $19 million and $93.2 million for the same periods in 2015, respectively. The $8.4 million comprehensive loss in the three months ended September 30, 2016 was mainly driven by the $14.6 million non-cash impairment as a result of the relinquishment of two blocks in Colombia. During the three months ended September 30, 2016, the Nispero1 exploration well was completed and tested at 28 MMscfpd of dry gas with no water. With success at Nispero-1, on September 13, 2016, the Corporation spud the Trombon1 exploration well from the same drilling platform the Nispero-1 well was drilled from. The Trombon1 exploration well targets the same CDO reservoir interval tested in the offsetting Nispero1 well, but in a distinct and isolated fault block located approximately 2 kilometers south of the Nispero-1 discovery. On October 17, 2016, the Trombon-1 exploration well was completed and tested at 26 MMscfpd of dry gas with no water. Both the Nispero-1 and Trombon-1 wells are tied into the Corporation's operated Jobo production facility.Net capital expenditures including acquisitions for the three and nine months ended September 30, 2016 was $28.7 million and $49.3 million, respectively, while adjusted capital expenditures including acquisitions, inclusive of amounts related to the Ecuador IPC, was $29.2 million and $50.5 million, respectively.At September 30, 2016, the Corporation had $62.1 million in cash and $62.6 million in restricted cash.......