Canacol to extend conventional natural gas exploration to Middle Magdalena Valley basin

Canacol Energy Ltd. expects to initiate exploratory activity on conventional gas exploration blocks in Colombia in 2020 with a view to drilling in 2021 and 2022. The company secured a 100%-operated working interest in three new conventional gas exploration contracts in the recent bid round (Proceso Permanente de Asignación de Areas Ciclo 2) administered by Colombia’s hydrocarbon regulatory authority, the Agencia Nacional de Hidrocarburos.

Under its wholly owned subsidiary CNE Oil & Gas SAS, Canacol was awarded conventional exploration contract VIM 33 (155,310 acres) in the Lower Magdalena Valley basin, and conventional exploration contracts VMM 45 (12,422 acres) and VMM 49 (148,244 acres) in the Middle Magdalena Valley basin. On a net acreage basis, these conventional exploration contracts increase the company’s land position for conventional natural gas in Colombia by 29% to 1.4 million net acres from 1.1 million net acres.

By extending exploration efforts for conventional natural gas to the Middle Magdalena Valley basin, the company continues its strategy to replace declining production from the mature gas fields in the Guajira and at Cusiana-Cupiagua in the Llanos Basin, said Mark Teare, senior vice-president, exploration.

The winning bids commit the company to an exploratory work program including geological studies, seismic, and wells over a 3-year phase (Phase 1) on each of the exploration contracts. After Phase 1, the company has the option to extend the exploratory work program by an additional 3 years (Phase 2) on each of the exploration contracts.