Last close As at 05/08/2026
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Research: Energy & Resources
Canacol Energy released its Q223 results on 10 August, which were in line with our full year expectations. Adjusted Q2 EBITDAX increased to US$60.7m, which represents a 10% increase year on year. This was driven primarily by a rise in netbacks, which increased to US$3.94/mcf in the quarter, compared to US$3.66/mcf in Q222. We are not changing our forecasts after these numbers.
Written by
Peter Hitchens
Canacol Energy |
Q2 results in line |
Quarterly results |
Oil and gas |
14 August 2023 |
Share price performance
Business description
Analyst
Canacol Energy is a research client of Edison Investment Research Limited |
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Canacol Energy released its Q223 results on 10 August, which were in line with our full year expectations. Adjusted Q2 EBITDAX increased to US$60.7m, which represents a 10% increase year on year. This was driven primarily by a rise in netbacks, which increased to US$3.94/mcf in the quarter, compared to US$3.66/mcf in Q222. We are not changing our forecasts after these numbers.
Year end |
Revenue (US$m) |
EBITDAX* |
Cash flow |
Net debt |
Capex |
Yield |
12/22 |
336 |
198 |
185 |
438 |
(180) |
8.3 |
12/23e |
351 |
218 |
190 |
481 |
(150) |
8.3 |
12/24e |
364 |
217 |
197 |
503 |
(160) |
8.3 |
12/25e |
530 |
365 |
301 |
486 |
(180) |
8.3 |
Note: *Earnings before interest, tax, depreciation, amortisation and exploration write-off.
Canacol Energy has published its Q223 results, with the company reporting adjusted EBITDAX of US$60.7m in the quarter. This represents a 10% increase on a year earlier and is similar to Q123. Although gas sales decreased by 2% compared to a year earlier, the company was able to increase the underlying profits on the back of higher netbacks through realising a higher sales price for its gas. The Q223 netback rose to $3.94/mcf from US$3.66/mcf a year earlier. The decline in gas production, to 184.8 mmcf/day, had been flagged in the group’s earlier updates. The adjusted funds from operations in the quarter decreased by 14% to US$33.7m mainly due to higher taxes payable after recent tax changes. This financial performance is very much as expected and so we will not change our forecasts.
Canacol Energy is increasing drilling activity and has mobilised further rigs with the expectation of drilling 10 exploration and appraisal wells over the year. This will help the group achieve its target of a 2P reserve replacement ratio (reserves found to replace production) of more than 200%. Many of these drilling targets are close to its existing infrastructure and will help to build productive gas capacity to meet this anticipated increase in gas demand, which could come through on the back of the El Niño effect that is developing in the Eastern Pacific Ocean. This may result in water shortages affecting hydroelectric power generation in Colombia, which could lead to increased demand for gas, and allow the company to benefit from higher gas sales in the second half of the year.
The group is also acquiring additional 3D seismic data in its VIM-5 block, which is located adjacent to its Jobo gas processing plant, in order build up its prospect inventory. Canacol is progressing its pipeline project from Jobo to Medellin, which is hoped will allow the group to increase gas sales by an additional 100mmcf/day. This is expected to be completed by the end of 2024. The group is also strengthening its ESG strategy – this was highlighted by the release (on 9 August 2023) of its new climate targets.
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Research: Healthcare
Despite the active second quarter with developments across all operational fronts, OpGen’s cash concerns have increased the risk of the company as a going concern. With a cash balance of $3.2m at end Q223, OpGen has a cash runway into September 2023, meaning the need for immediate financing will be critical. Key quarterly highlights included the extension of the FIND R&D collaboration, a non-exclusive distribution agreement with Fisher Healthcare and new commercial contracts for both Unyvero and ARES services. While topline growth was a little subdued year-on-year due to one-off income in Q222, the operating loss for the period slightly improved to $5.2m (vs $5.3m in Q222), reflecting tighter cost controls and low clinical activity. If management is able to bridge the funding gap, its efforts in building the commercial groundwork could benefit the second half of the year across Unyvero, Acuitas and ARES. Due to the funding announcement, we have put our estimates and valuation on hold and will reassess as financing updates become available.