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Canacol Energy

CN: CNE

C$624.5m market cap

C$3.45 last close

Canacol Energy is a natural gas exploration and production company primarily focused on Colombia.

Investment summary

In Q220 Canacol saw a c 25% reduction in sales from Q120 of 201mmscfd to 152mmscfd, as a consequence of the impact of COVID-19 outbreak in Colombia. As lockdown measures eased, production recovered in June to 165mmscfd. Canacol is also working with its partners for a new export pipeline to Medellin that would expand export capacity to 315mmscfd by the end of 2023. It strengthened its liquidity with two additional facilities of $46m and $75m. The $75m facility is a bridge term loan for Canacol to accelerate engineering and environment permitting of the Medellin pipeline. Ultimately, it expects to transfer majority ownership of this pipeline to a third party, but the loan will allow it to maintain its schedule with the pipeline in the meantime. The Pandereta 8 development well is being completed and the Porro Norte 1 exploration well was spudded with a second rig in August and will take c seven weeks to drill.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 204.5 138.6 7.3 (12.32) N/A 4.9
2019A 219.5 162.8 64.7 19.21 13.7 4.3
2020E 255.7 214.9 109.1 51.98 5.0 2.4
2021E 289.6 245.3 133.0 50.67 5.2 2.3
Industry outlook

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. Canacol sells gas under long-term, fixed-price gas contracts, typically of five to 10 years’ duration with inflation clauses to protect cash flows.

Last updated on 17/09/2020
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Sector
Oil & gas
Share price graph
Balance sheet
Forecast net debt (US$m) 265.8
Forecast gearing ratio (%) 84
Price performance
%
1m
3m
12m
Actual (5.0) (6.0) (26.4)
Relative* (2.6) (10.7) (23.8)
52-week high/low C$4.9/C$2.8
*% relative to local index
Key management
Charle Gamba CEO
Jason Bednar CFO