Canacol Energy plans to drill new gas wells in Colombia

Canadian-based exploration and production company Canacol Energy is planning to drill three new gas wells in Colombia in order to accelerate its natural gas opportunities.

It also plans to drill an additional oil well later this year.

The company has revised its 2016 capital plan by increasing it from $58m to $92m.

In August it raised $35m from long-term strategic investors, including a follow-on investment from the company's largest shareholder, Cavengas Holdings, to accelerate gas drilling.

Despite instable global oil prices, the company anticipates near record EBITDAX of approximately $135m for this year.

The company already has fixed price gas contracts to address the impact oil volatility, with approximately 86% of 2016 corporate production insensitive to world oil prices.

It continues to reduce costs with an estimated 40% reduction in general and administrative expenses for the year.

Four gas discoveries have been made by the company in the past three years, and added 302 billion cubic feet (bcf) in 2P reserves on the Esperanza and VIM 5 E&P blocks located in the Lower Magdalena Basin, Colombia.

Canacol expanded the gas drilling programme to target the management's estimate of more than 100bcf of new potential recoverable resource this year and to secure new gas sales contracts.

The company also aims to increase the production capacity of the corporation's gas assets to more than 190 million cubic feet per day in anticipation of new sales contracts.

It also plans to hold a large inventory of prospects and leads, targeting 2.4 to 2.8 trillion cubic feet.