Page 19 - LatAmOil Week 33

LatAmOil NEWS IN BRIEF LatAmOil

Average natural gas and LNG production vol-
umes increased 24% and 44% to 151.1 mcf per
day and 176.3 mcf per day for the three and six
months ended June 30, 2020, respectively, com-
pared to 121.5 mcf per day and 122.4 for the
same periods in 2019, respectively. The increase
is primarily due to the completion of the 100 mcf
per day pipeline expansion in late Q3 2019, offset
by the decrease in sales as a result of the COVID-
19 pandemic.
Total natural gas and LNG revenue, net of roy-
alties and transportation expenses for the three
and six months ended June 30, 2020 increased and $28.2mn, respectively. Net capital expendi- to potentially add additional wells in our drilling
17% and 28% to $53.3mn and $123.2mn, respec- tures included non-cash adjustments related to campaign and to advance the Medellin pipeline
tively, compared to $45.7mn and $93.1mn for decommissioning obligations of $3.7mn and project.
same periods in 2019, respectively, mainly attrib- $5mn three and six months ended June 30, 2020, Despite the slow recovery from the COVID-
utable to the increase of natural gas production respectively. 19 pandemic in Colombia, the Corporation
and the 100 mcf per day pipeline expansion. On April 21, 2020, the Corporation entered expects its sales to be inside the previously
Adjusted funds from operations increased into a credit agreement with Banco de Occidente released guidance range of 170 mcf per day and
22% and 38% to $31.2mn and $76.5mn, respec- and withdrew $5mn in COP for additional COP 197 mcf per day.
tively, for the three and six months ended June liquidity purposes. Canacol is a natural gas exploration and pro-
30, 2020, respectively, compared to $25.6mn and On June 30, 2020, the Corporation entered duction company with operations focused in
$55.5mn for the same periods in 2019, respec- into an agreement to amend the terms of the Colombia. The Corporation’s shares are traded
tively. Adjusted funds from operations per basic bank debt held with Credit Suisse. The original on the Toronto Stock Exchange under the sym-
share increased 21% and 35% to $0.17 per basic fixed interest rate of 6.875% was revised to a bol CNE, the OTCQX in the United States of
share and $0.42 per basic share for the three and floating interest rate of LIBOR + 4.25% (LIBOR America under the symbol CNNEF and the
six months ended June 30, 2020, respectively, rate was 0.3% at the amendment date) and the Bolsa de Valores de Colombia under the symbol
compared to $0.14 per basic share and $0.31 original 11 equal quarterly principal payments, CNEC.
per basic share for the same periods in 2019, which were to commence on June 11, 2020, were Canacol Energy, August 13 2020
respectively. revised to seven equal quarterly principal pay-
EBITDAX increased 9% and 29% to $40.4mn ments to commence on December 11, 2021.
and $99.3mn for the three and six months ended As at June 30, 2020, the Corporation had INVESTMENT
June 30, 2020, respectively, compared to $37mn $58.6mn in cash and cash equivalents, $4mn in
and $76.8mn for the same periods in 2019, restricted cash and $72.1mn in working capital Petrobras signs contract for
respectively. surplus.
The Corporation realised a net income of Outlook: Despite the worldwide uncertain- onshore fields sale in Ceará
$17.7mn and a net loss of $8.3mn for the three ties and disruptions caused by the COVID-19
and six months ended June 30, 2020, respec- pandemic, Canacol’s operations continued Petrobras, following up on the release disclosed
tively, compared to a net income of $1.9mn and on relatively uninterrupted during Q2-2020, on June 18, 2018, informs that it signed today
$8.2mn for the same periods in 2019, respec- including the drilling of Clarinete-5 and its 43 with SPE Fazenda Belém, a wholly-owned
tively. The net loss realised during the six months mcf per day production test. Post June 30, 2020, subsidiary of 3R Petroleum e Participações, a
ended June 30, 2020 is solely due to the non-cash the Corporation is currently completing the contract for the sale of its entire interest in the
deferred tax expense of $29.5mn, which is pri- Pandereta-8 development well, which encoun- onshore fields of Fazenda Belém and Icapuí,
marily due to the effect of the reduction in the tered 168 feet true vertical depth of net gas pay. called Fazenda Belém Cluster, located in the
Colombian Peso exchange rate on the value of Utilising a second rig, the Corporation has also Potiguar Basin, in the state of Ceará.
unused tax losses and cost pool. recently spud the Porro Norte-1 exploration well The sale amount is $35.2mn, of which (i)
The Corporation’s natural gas and LNG oper- and anticipates well results to be released once $8.8mn will be paid on the contract signature
ating netback decreased 6% and 9% to $3.63 the well has reached total depth and has been date; (ii) $16.4mn at closing of the transaction;
per mcf and $3.60 per mcf in the three and six logged. and (iii) $10mn will be paid in 12 months after
months ended June 30, 2020, respectively, com- As at June 30, 2020, Canacol maintained its closing of the transaction.
pared to $3.88 per mcf and $3.96 per mcf for the strong balance sheet and liquidity including The amounts do not consider the adjust-
same periods in 2019, respectively. The decrease approximately $58.6mn of cash, with our robust ments due and are subject to compliance with
is due to lower spot market gas sales prices, net 2020 capital and dividend programs being previous conditions, such as approval by the
transportation costs. funded through existing cash and operating National Agency of Petroleum, Natural Gas and
The decrease is offset by a 19% and 20% cash flows. Biofuels (ANP).
reduction of operating expenses per mcf to $0.25 Adding to Canacol’s existing financial flex- The cluster comprises the onshore fields of
per mcf and $0.24 per mcf for the three and six ibility, we have re-profiled the terms of the Fazenda Belém and Icapuí, located in the state
months ended June 30, 2020, respectively, com- Credit Suisse Bank Debt and entered into two of Ceará, where Petrobras holds 100% interest.
pared to $0.31 per mcf and $0.30 for the same new credit facilities. Although these additional The average production of the Fazenda Belém
periods in 2019, respectively. funds are not necessarily required at this time, Cluster from January to April 2020 was approxi-
Net capital expenditures for the three and the Corporation felt it prudent to secure addi- mately 800 barrels per day (bpd) of oil.
six months ended June 30, 2020 were $8.3mn tional financial flexibility at very favourable rates Petrobras, August 14 2020

Week 33 19•August•2020 www. NEWSBASE .com P19