Canacol Energy


CA$729.1m market cap

CA$4.11 last close

Canacol Energy is an oil and gas company involved in the exploration and production of hydrocarbons with operations in South America. The company intends to focus on continuing to grow its Colombia natural gas business and reach 215mmcfd production by June 2019.

Investment summary

The Colombian, Caribbean Coast gas market is expected to move into gas deficit in the absence of LNG imports, incremental piped gas or the development of recent deepwater discoveries. We expect Canacol’s market share to increase materially in 2019 and 2020, with management expecting production to ramp-up to 215mmscfd by mid-2019 (+89% from FY18). This is currently underpinned by a YE18 2P reserve base of c 559bcf, implying a reserve life index (RLI) of 7.1 years at 215mmscfd. High exploration and appraisal success rates (historically above 80%) and over 2.6tcf of unrisked prospective resource should enable Canacol to enhance RLI and provide the basis for further production expansion. Realised gas prices are largely fixed (forecast FY19 c US$4.75/mcf post-transport and pre-tax netback of US$3.73/mcf), providing visibility of free cash flows. Our 2P + risked exploration NAV stands at C$6.28/share.

Y/E Dec
Revenue (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 156.6 130.2 (116.4) (84.95) N/A 8.3
2018A 204.5 138.6 7.3 (12.32) N/A 5.8
2019E 243.2 196.6 86.0 33.06 9.3 3.2
2020E 321.8 269.0 140.3 54.82 5.6 2.4
Last updated on 16/05/2019
Oil & gas
Share price graph
Balance sheet
Forecast net debt (US$m) 266.8
Forecast gearing ratio (%) 98
Price performance
Actual (4.6) (3.5) (1.4)
Relative* (4.3) (7.1) (3.5)
52-week high/low C$4.6/C$3.5
*% relative to local index
Key management
Charle Gamba CEO
Jason Bednar CFO

You may also be interested in…