Last close As at 05/08/2026
—
— 0.00 (0.00%)
Market capitalisation
—
Research: Energy & Resources
On 5 July Canacol Energy issued an operating update that included gas sales and drilling results. June 2023 gas sales were 186mmcf/day, down from 199mmcf/day last year, but within guidance. Management also explained progress at the Lulo-2 and Chimela-1 wells. This confirms the company is on track to meet guidance.
Written by
Peter Hitchens
Canacol Energy |
On track to meet guidance |
Operational update |
Oil and gas |
7 July 2023 |
Share price performance
Business description
Analyst
Canacol Energy is a research client of Edison Investment Research Limited |
||||||||||||||||||||||||||||||||||
On 5 July Canacol Energy issued an operating update that included gas sales and drilling results. June 2023 gas sales were 186mmcf/day, down from 199mmcf/day last year, but within guidance. Management also explained progress at the Lulo-2 and Chimela-1 wells. This confirms the company is on track to meet guidance.
Year end |
Revenue (US$m) |
EBITDAX* |
Cash flow |
Net debt |
Capex |
Yield |
12/22 |
336 |
198 |
185 |
438 |
(180) |
9.9 |
12/23e |
351 |
218 |
190 |
481 |
(150) |
9.9 |
12/24e |
364 |
217 |
197 |
503 |
(160) |
9.9 |
12/25e |
530 |
365 |
301 |
486 |
(180) |
9.9 |
Note: *Earnings before interest, tax, depreciation, amortisation and exploration write-off.
Canacol has announced that it achieved gas sales of 186mmcf/day in June 2023, which is down from 199mmcf/day in June last year but in line with sales in May and Q123. This should be put in the context of management guidance for 2023 (with final results in March) of 160–206mmcf/day. With potential water shortages affecting hydroelectric generation due to the El Niño effect that is starting to develop, we believe production could move higher in the second half of the year. Our forecasts are based on sales of 186mmcf/day.
Canacol also updated the market on its drilling programme. The Lulo-2 appraisal well tested at 24mmcf/day and follows the Lulo-1 appraisal well, which flowed at 22mmcf/day. This field is close to the Jobo gas processing plant and can be tied in very quickly. This will add 30–40mmcf/day of additional gas production, which is available in there is increased demand due to the El Niño effect. Longer term this will probably be used for production into the interior market of Colombia once its new Jobo-Medellin pipeline is up and running at the end of 2024. The rig will now move to drill a similar prospect, Piña Norte-1, which will be followed by wells on look-a-like structures – Cereza-1 and Mafaldine-1. This success gives increasing confidence in the group’s ability to achieve its target of 200% reserve replacement (replacing 200% of reserves produced).
The company has announced that its exploration well, Chimela-1, has been successfully flow tested. The well logged oil and gas pay in January 2023. The oil zone was perforated and flowed 353bbl/day of oil with very little water cut or loss of reservoir pressure. The well has been shut in to allow for a build-up of pressure. Investors should note that this is just 7km from Gran Tierra’s Acordionero field, which is producing 18,600bbl/day of oil.
|
|
Research: TMT
1Spatial’s AGM statement provides further support for our view that the company is establishing a good platform for scalable recurring revenue growth. 1Spatial has secured its first customer for its Next Generation 911 (NG 911) solution in the US and three customers for its SaaS 1Streetworks product (including an additional one since 19 June). The opportunity for both products is significant, in our view. Sales cycles continue to be somewhat protracted within the current macro-economic environment. However, with a strong order book, pipeline and feedback for new products, management remains confident it can deliver FY24e results in line with expectations. Our estimates are unchanged but further progress with the SaaS products would potentially make the recurring revenue growth and margin expansion opportunity more apparent.