Two gas projects to nearly triple gas production by Dec 2018(1)

Transcription

1 November 2017 Two gas projects to nearly triple gas production by Dec 2018(1) (1) From MMcf/d, or 2.7x

2 Forward Looking Statements Gas deficit This presentation may include certain forward looking statements. All statements other than statements of historical fact, included herein, including, without limitation, statements regarding future plans and objectives of Canacol Energy Ltd. Canacol or the Corporation, are forward-looking statements that involve various risks, assumptions, estimates, and uncertainties. These statements reflect the current internal projections, expectations or beliefs of Canacol and are based on information currently available to the Corporation. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. All of the forward looking statements contained in this presentation are qualified by these cautionary statements and the risk factors described above. Furthermore, all such statements are made as of the date this presentation is given and Canacol assumes no obligation to update or revise these statements. 20 blocks / 2.1 MM net acres Natural Gas S. Pacific Ocean Colombia Barrels of Oil Equivalent Barrels of oil equivalent (boe) is calculated using the conversion factor of 5.7 Mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 5.7 Mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Production and Reserves Production represents net before royalty Reserves represent 2P reserves and before tax NPV-10 as of December 31, 2016 USD All dollar amounts are shown in US dollars, unless indicated otherwise Km

3 The Path To ~$300 MM EBITDA In MM, except CDN $/share amounts TSX $/share (12/18/17) CDN $4.20 Fully diluted shares outstanding(1) Market capitalization(2) Net debt(3) Enterprise value TSX: CNE BVC: CNE.C to realized contract sales MMcf/d % gas ~80% 178 US $588 $243 US $831 Insider ownership (1) Includes in-the-money options based on CDN $4.20 / share price ~140 MM shares in the float (2) Converted from CDN USD exchange rate (0.79) as of 12/18/17 (3) As of 9/30/17 to realized contract sales MMcf/d 22% 3

4 Strong Track Record Of Asset Optimization Added 314 BCF in 2P reserves over the trailing 4-yrs. A conventional gas success story +51% CAGR in 2P reserves In MMboe(1) oil gas Recent 2P NPV-10 Gas exploration success 1P / 2P reserve replacement Avg. F&D cost $1.2 B(2) 9/10 wells (90%) 166% / 194% y/y $0.44 / MCF(3) 90% gas The lowest cost gas operator always wins 14 For the 3 months ended 9/30/ '09 '10 '11 '12 Oil 17 '13 20 '14 '15 '16 Gas In US dollars unless otherwise noted (1) Represents before tax corporate total (oil + natural gas) 2P reserves value as of 12/31/16 Pro forma for the sale of Canacol s assets in Ecuador as of Dec (2) Represents before tax natural gas only 2P reserves value as of 12/31/16 (3) Average over the trailing 2-yr. period (4) Includes $0.26/MCF of transportation expense Natural gas revenues Royalties Production expenses(4) Operating netback $ / MCF % margin $ 4.96 $ (0.51) 10% $ (0.62) 12% $ % 4

5 Two Gas Projects To Nearly Triple Gas Production By 2019 Chuchupa Ballena Barranquilla 1 Sabanas Pipeline Co. Caribbean Sea +40 MMcf/d 130 MMcf/d 2018 Building 6-in. pipeline Jobo Sincelejo Cartagena Reficar La Creciente 2 1 Jobo facility +100 MMcf/d 230 MMcf/d Twin Jobo Sincelejo pipeline 8 gas fields 5 blocks 1.1 MM net acres Canacol gas blocks Gas pipeline pipeline pipeline 2 New compressor Compressor 10 km Gas field 2019 Construct new pipeline Cartagena Barranquilla 5

6 Canacol s Sweet Spot Replacing Chevron s gas supply to the Caribbean Replacing Chevron as the largest Caribbean supplier of gas(1) Not many gas supply options MMcf/d ĺ Excess demand > 100MMcf/d ~380 MMscfpd LNG > $8/MMbtu Barranquilla 395 Canacol Cartagena Deep Water > 2000m Hocol 30 MMscfpd Frontera 30 MMscfpd ~80 MMscfpd Chevron 100 '16 '17E '18E (1) Source: Wood Mackenzie and UPME Colombia estimates '19E '20E Cero Matosa 6

7 A Conventional Natural Gas Success Story X 4 discoveries in Sincelejo Bremen 2 1 VIM 19 SSJN7 VIM 5 7 Gaiteros-1 (exploration) 3D Pandereta-1 Oboe 7 Pandereta-2 (appraisal) VIM 21 Clarinete Canahuate Jobo Large resource upside Net acres Blocks Gross mean unrisked resources BT EMV-10 Prospects / leads (1) (2) 1.1 MM 5 2 TCF (1) US $789 MM (2) 44 (2) Gaffney, Cline & Associates GCA prospective conventional natural gas resource report, effective Dec Expected Monetary Value discounted at %, GCA Dec Legend Trombon Cañandonga-1 Toronja Palmer Strong base production and reserves 3 acquisitions ('12-'14) 96 BCF Trailing 3-yr. 2P reserve adds 314 BCF Recent 2p reserves 410 BCF Gas exploration success 10/11 wells (91%) Producing wells 17 3D Nispero 3D Canacol Gas Nelson Esperanza Gas field Prospects Leads Facilities Existing pipeline 1 Sabanas planned pipeline (12/1/17) 2 Promigas planned pipeline (12/1/18) 20 km 7

8 AVO Reduces Exploration Risk Discovered 10 gas fields over the trailing 4-yrs. The hunt for repeatable anomalies PANDERETA-1 CLARINETE-1 Applying AVO technology to gascharged sandstones 1,200 1,400 Tubara Marker 1,600 Lower Tubara Gas exploration success Utilizing AVO Avg. net pay/well Avg. test rate/well 10-for-11 (91%) 7-for-7 (100%) 84 ft. TVD 32 MMcf/d 1,800 Mid Miocene / Top CDO 2,000 2,200 >2 TCF of running room(1) Upper CDO Mid CDO Basal CDO Fluid Factor (AVO) section (1) Represents gross unrisked mean resources from the Gaffney, Cline & Associates prospective gas resource report, effective Dec 8

9 Pandereta-2 Appraisal Well Depth structure map top reservoir interval tied to PAN-1 AVO seismic attribute section parallel to proposed PAN-2 wellbore trajectory A B PAN-2 PAN-1 Penetration point at Top CDO Reservoir B A PAN-2 P-90 P-10 AVO event at mid CDO PAN-1 AVO event at BASEMENT 500 M Pandereta-1 tested 29 MMcf/d Spud October 25, 2017 TD & Drill time 9,347 ft md, 15 days Petrophysical interpretation (logs) Primary target CDO 64 ft tvd net gas pay Secondary targets Lower Tubara 34 ft tvd net gas pay Fractured basement 51 ft tvd gas pay Pandereta-2 Objective Investigate AVO seismic attribute in adjacent fault block with view to book additional reserves in CDO reservoir section Anticipated spud December 6, 2017 Anticipated TD & Drill time 10,306 ft md, 20 days Primary target CDO Secondary targets: Lower Tubara, fractured basement 9

10 Drilling For Repeatable Anomalies In The Porquero Jun : Toronja-1 exploration well tested 46 MMcf/d TORONJA-1 Jun 1 NELSON-6 Nov 1 1 1,200 1,400 1,600 Intra Porquero NELSON-5 PORQUERO 1,800 NELSON-4 NELSON-2 NELSON-3 Top CDO ,200 PALMER-1 NELSON-8 Basement Mid Porquero time structure 1KM 1 2 Fluid Factor (AVO) section Tested 46 MMcf/d Exploration target Porquero reservoir sandstones Well cost 41% below budget Tied Toronja into Jobo (3 kms) Porosity 20% 10

11 Toronja-1 Suggests Much More In Store For The Porquero Nelson-5, Nelson-6 added 25 Bcf from the Porquero Formation(1) Nov Nelson-6 spelled opportunity Net pay Tested 39 ft. TVD 23 MMcf/d ARANDALA-1 Dec Nelson-5 Porquero recompletion Ĺ confidence Net pay Tested CARAMBOLO-1 79 ft. TVD 13 MMcf/d BREVA-1 Jun Toronja-1 says more running room Tested TORONJA-1 46 MMcf/d NELSON-5 Aranadala-1, Breva-1, Carambolo-1 offer 3 follow-up exploration locations NELSON-6 AVO extraction over Mid Porquero SST marker Represents P reserves as of Dec 1 KM reserve report 11

12 Active 4Q 2017 Exploration Program Gaiteros-1 rig mobilization 3D 3D Gaiteros-1 Pandereta-1 Oboe-1 7 Pandereta-2 (appraisal) Clarinete-1 Reservoirs Net pay 3D Arianna Canaflecha Sucre Castor Katana Nispero-1 Trombon-1 3D Toronja-1 VIM 5 block Cañandonga-1 Palmer-1 Nelson Field 193 BCF Spud Jan 2018 Fault dependent closure Reservoir target CDO Drill & test / Depth $5.5 MM / ~10k ft. MD Pandereta-1 tested 29 MMcf/d VIM 21 & Esperanza blocks Jobo Station Prospect Lead Canacol fields Mature fields Flow line Gas well 5 km CDO, Tubara 64 ft TVD (CDO) 34 ft TVD (Tubara) Porosity 21% (CDO) 15% (Tubara) Pandereta-2 spud on December 3rd Cañandonga-1 Reservoir CDO Net pay 32 ft TVD Porosity 18% Well test with workover rig

13 Path to 130 MMscfpd 20 MMscfpd of initial transport capacity on Dec 1, 2017 Bremen Station VIM 19 San Luis Station La Union Station SSJN 7 40 MMscfpd of transport capacity in mid January 2018 VIM 5 Promigas 195 MMscfpd of productive capacity 200 MMscfpd of gas processing capacity VIM 21 Jobo Facility Esperanza 20 m 14

14 Aim To Deliver 230 MMcf/d By 2018 Exit Only $30 MM to maintain 230 MMcf/d US $85 MM to increase gas production from MMscfpd in Dec 9 average sales price of ~ $ /MMbtu 80 MMscfpd of new productive capacity $50 MM for 10 new wells and tie ins 100 MMscfpd of new processing capacity $35 MM in modular expansion of existing facility at Jobo 100 MMscfpd of new transport capacity US $ 0 for second expansion of the Promigas pipeline Construction of the new Sabanas pipeline project 15

15 Outlook MMcf/d +49% CAGR in gas production Substantial liquidity enables execution MMcf/d US $ in MM forecast Q 7 net debt 9e ebitda ~$300 $243 MM ~$300 MM 230 $ '16 85 '17 '17 exit For the remainder of 2017e: 2 gas exploration wells Sabanas flow line '18 exit '16 '19e Senior secured term loan Credit Suisse + syndicate / L+5.50% No re-determination if oil prices fall Mar 9 Mar ~$24 MM of principal payments for 13 consecutive quarters 16

16 Canacol s Acreage Is Colombia s Shale Oil Sweet Spot > 2.3 trillion oil barrels in S.A. has La Luna source rock Source: 2010 Journal of Petroleum Geology Mono Araña Mono Capuchino VMM 2 Source: 2013 U.S. EIA study Canacol blocks Gross / net acres 5 625k / 371k Canacol s VMM and VMM offer over pressured, Tier acreage in the La Luna fairway Pico Plata Normal pressure 1.7 M acres of La Luna fairway in Colombia Gross/net acres 159k / 32k Operating partner ConocoPhillips Solid results from multiple fracs in the latest well (Pico Plata) Over pressured VMM 3 Tier 1 Tier 2 % Vro Potential prize: 1.9 B barrels of net mean OOIP(1) Source: DeGolyer & McNaughton unconventional oil prospective resource report, Oct % Vro > km Wells Oil fields Canacol wells (1) Pro forma for the relinquishment of the Santa Isabel block DeGolyer & McNaughton D&M Resource Report as of / /. D&M provided mean estimates of Original Oil In Place (OOIP). These estimates have not been adjusted for the probability of geologic success. 17

17 GALEMBO C PicoPlata-1 Vertical Unconventional Well Operated By Conoco Frac #3 VMM3 gross acres 83k Canacol WI 20% GALEMBO D-1 La Luna shales Frac #2 Gross thickness 1369 ft. Net pay 866 ft. Avg. porosity 10% Jan 2017, 3 successful fracs Highly over pressured SALADA A All fracture treatment successfully placed Induced fractures grow in height ( ft.) Frac #1 Variable flow rates bopd (no water) 31 API gravity oil 18

18 Contact Carolina Orozco Director, Investor Relations 44 (0) Kevin Flick VP, Investor Relations Phil Heinrich Investor Relations Manager