CALGARY, ALBERTA--(Marketwired - Oct. 17, 2016) - Canacol Energy Ltd. ("Canacol" or the "Corporation")
(TSX:CNE)(OTCQX:CNNEF)(BVC:CNEC) is pleased to provide the following update for the Trombon 1 discovery, which represents the
Corporation's fifth consecutive gas exploration success.
Trombon 1 Gas Discovery
Esperanza Exploration & Exploitation ("E&P") contract
Lower Magdalena Basin, Colombia
100% working interest
Offsetting the Nispero 1 gas discovery that Canacol announced in late August 2016, the Trombon 1 exploration well was spud on
the Esperanza E&P contract on September 13, 2016. The well reached total depth of 10,360 feet measured depth ("ft. md")
in sixteen days. The well encountered 26 ft. md (21 feet true vertical depth) of net gas pay with average porosity of 22% within
the primary Cienaga de Oro ("CDO") reservoir target. The CDO reservoir interval was perforated between 8,328 to 8,354 ft. md
and flowed at a final stabilized rate of 26 million cubic feet per day ("MMscfpd") of dry gas with no water. Trombon 1
tested with a flowing tubing head pressure of 2,254 pounds per square inch over a 36-hour test period. The Corporation
finished completion of the Trombon 1 well for permanent production via the Nispero to Jobo flow line. Trombon 1 will tie
into the Corporation's operated Jobo production facility.
2016 Drilling Program
The Corporation's resource capture strategy anticipates four more wells before year end. The Corporation has contracted
the Tuscany Rig-14 to drill the Nelson 6 gas exploration well and Nelson 8 gas development well. Tuscany Rig-15 is
mobilizing from the Trombon discovery to the Clarinete field to drill the Clarinete 3 gas development well. The Nelson 6
exploration well is expected to spud on October 18, 2016 and will target interpreted gas pay within the shallow Porquero
sandstone reservoir in the Nelson field. Upon completion, the Corporation will drill the Nelson 8 development well targeting
productive reservoirs within the CDO reservoir that are not being drained by the existing producing wells in the Nelson
field. A third rig will be contracted to drill the Mono Capuchino-1 oil exploration well on the VMM 2 E&P contract
located in the Middle Magdalena Basin.
Corporate Production
Realized contractual oil and gas sales for the quarter ended September 30, 2016 averaged approximately 18,908 boepd, which
consisted of 86.1 MMscfpd (15,107 boepd) of gas, and 3,801 barrels of oil per day.
Canacol is an exploration and production company with operations focused in Colombia and Ecuador. The Corporation's
common stock trades on the Toronto Stock Exchange, the OTCQX in the United States of America, and the Colombia Stock Exchange
under ticker symbol CNE, CNNEF, and CNE.C, respectively.
This press release contains certain forward-looking statements within the meaning of applicable securities
law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend",
"believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will"
occur, including without limitation statements relating to estimated production rates from the Corporation's properties and
intended work programs and associated timelines. Forward-looking statements are based on the opinions and estimates of management
at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those projected in the forward-looking statements. The Corporation cannot
assure that actual results will be consistent with these forward looking statements. They are made as of the date hereof and
are subject to change and the Corporation assumes no obligation to revise or update them to reflect new circumstances, except as
required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include
the inherent risks involved in the exploration for and development of crude oil and natural gas properties, the uncertainties
involved in interpreting drilling results and other geological and geophysical data, fluctuating energy prices, the possibility
of cost overruns or unanticipated costs or delays and other uncertainties associated with the oil and gas industry. Other
risk factors could include risks associated with negotiating with foreign governments as well as country risk associated with
conducting international activities, and other factors, many of which are beyond the control of the Corporation.
Realized contractual gas sales is defined as gas produced and sold, plus gas revenues received from nominated take or pay
contracts.
Gas cash sales is defined as realized contractual gas sales plus the portion of cash received for undelivered gas
nominations classified as deferred revenues accordingly to IFRS.
Corporate cash sales is defined as gas cash sales plus Colombian oil sales plus the Corporation's share of Ecuador tariff
oil sales.
The portion of undelivered gas nominations classified as deferred revenues for the quarter ended September 30, 2016 was
approximately 1.3 MMscfpd.
Boe conversion - The term "boe" is used in this news release. Boe may be misleading, particularly if used in isolation. A
boe conversion ratio of cubic feet of natural gas to barrels oil equivalent is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In this news release, we have
expressed boe using the Colombian conversion standard of 5.7 Mcf: 1 bbl required by the Ministry of Mines and Energy of
Colombia.