Canacol Energy Ltd. (TSX: T.CNE, Stock Forum) announced the commencement of drilling operations for the Oso Pardo one exploration well being drilled on the Santa Isabel Exploration and Production contract located in the Middle Magdalena Valley of Colombia.
According to the Canacol Energy press release, pursuant to the terms of the agreements between Canacol and ConocoPhillips Colombia Ventures Ltd., a wholly-owned subsidiary of ConocoPhillips Co. (NYSE:COP, Stock Forum), Canacol will hold a 30% operated working interest in the deep Cretaceous section of the contract, with ConocoPhillips holding 70% working interest.
Canacol retains a 100% contractual interest in the shallow Tertiary section of the Concession Contract. The formalization of the aforementioned working interest remains subject to the official approval of the Agencia Nacional de Hidrocarburos.
The Oso Pardo one well was spud on June 10, 2013, and is designed to test the oil potential of both the shallow conventional Tertiary Lisama sandstone reservoir and deeper naturally fractured shale and carbonate reservoirs within the La Luna and Simiti oil shales.
Canacol is an exploration and production corporation with operations focused in Colombia and Ecuador.
On Tuesday, Canacol was trading at $2.99 a share. The company had a market cap of $258.6 million, based on 86.5 million shares outstanding.