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Canacol Energy

CN: CNE

C$787.3m market cap

C$4.35 last close

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

Investment summary

Canacol Energy is an oil and gas company involved in the exploration and production of natural gas in Colombia. In August 2019, it achieved record production of 217mmscfd. This is a significant milestone for the company in Colombia and was made possible by the completion of the Jobo to Cartagena pipeline. This led to a 22% increase in natural gas production from Q219. Canacol is now working with its partners for a new export pipeline to Medellin that would expand export capacity to 315mmscfd by the end of 2023. High exploration and appraisal success rates (c 85%) and over 2.6tcf of unrisked prospective resource should enable reserve life expansion. Low well costs, combined with largely fixed gas pricing, provide visibility of free cash flows. Given the forecast of stable free cash flows for the coming years, Canacol’s board of directors declared a recurring quarterly dividend, starting in Q419 at US$7m. Our updated 2P + risked exploration NAV currently stands at C$6.35/share.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 156.6 130.2 (116.4) (84.95) N/A 9.2
2018A 204.5 138.6 7.3 (12.32) N/A 6.5
2019E 218.5 178.2 73.3 27.29 12.5 4.0
2020E 321.8 273.0 144.0 56.48 6.1 2.7
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.

Last updated on 12/02/2020
Sector
Oil & gas
Share price graph
Balance sheet
Forecast net debt (US$m) 285.3
Forecast gearing ratio (%) 110
Price performance
%
1m
3m
12m
Actual (0.5) (6.1) 5.4
Relative* (3.4) (10.6) (7.6)
52-week high/low C$5.0/C$4.0
*% relative to local index
Key management
Charle Gamba CEO
Jason Bednar CFO

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