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CALGARY - Canacol Energy has successfully secured a 100% operated working interest in three new conventional gas exploration contracts in the recent bid round administered by Colombia’s hydrocarbon regulatory authority, the Agencia Nacional de Hidrocarburos.

Mark Teare, senior vice president, exploration, commented “Our success in the bid round enables us to build out our existing land position in the Lower Magdalena Valley basin where the Corporation has established itself as Colombia’s leading independent producer of conventional natural gas. Furthermore, with a view to expanding our exploration portfolio, we have established a new core conventional natural gas exploration area in the Middle Magdalena Valley basin where we have won two blocks totalling 160,666 net acres. We expect to initiate exploratory activity on our new blocks in 2020 with a view to drilling in 2021 and 2022.”

“By extending our exploration efforts for conventional natural gas to the Middle Magdalena Valley basin, the corporation continues to execute its successful conventional gas exploration strategy to replace declining production from the mature gas fields located in the Guajira and at Cusiana-Cupiagua in the Llanos basin.”

Under its wholly owned subsidiary CNE Oil & Gas S.A.S., Canacol was awarded conventional exploration contract VIM 33 (155,310 acres, 62,852 hectares) in the Lower Magdalena Valley basin, and conventional exploration contracts VMM 45 (12,422 acres, 5,027 hectares) and VMM 49 (148,244 acres, 59,992 hectares) in the Middle Magdalena Valley basin. On a net acreage basis, these conventional exploration contracts increase the corporation’s land position for conventional natural gas in Colombia by 29 % from 1.1 mm net acres to 1.4 mm net acres.

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