Natural gas exploration and production company Canacol Energy Ltd. plans to raise profit this year without having to increase capital expenditure.
In its latest guidance update, Canacol said its capital budget has been set between $138 million and $151 million.
The company forecast average realized contractual gas sales for 2024 between 160 and 177 million cubic feet per day (MMcfpd). The average wellhead sales price, net of transportation costs, is expected to average $6.59 per thousand cubic feet. This is $1.18 above the wellhead sales price of 2023. This would also result in an EBITDA of $250 million to $290 million, above Canacol’s $236 million EBITDA in 2023.
“As we previously stated, the Corporation’s long-term plan is focused on i) maintaining and growing our reserve base and production from our core assets in the Lower Magdalena Valley Basin, targeting the full use of existing transportation infrastructure; ii) exploring high impact exploration opportunities in the Middle Magdalena Valley Basin; iii) strategic entrance into the gas market in Bolivia, and iv) continue to improve our ESG scores”, President and CEO Charle Gamba, President stated.
Canacol said it is also planning comprehensive development and exploration programs, with a drilling target of up to five development wells. It said it would install new compression and processing facilities as required and implement workover operations at producing wells in its key gas fields.
The company plans to also drill four exploration wells, as well as complete the acquisition of 96.1 square miles (249 square kilometers) of 3D seismic data to add new reserves and identify new drilling prospects.
“During the first half of 2024, we are planning an active development drilling and workover program, coupled with investments in additional compression and processing facilities, to ensure that sufficient productive capacity exists to meet potentially high gas demand during the first half of 2024 related to the effects of El Nino”, the company said.
Furthermore, despite focusing on reducing debt, the company said it will maintain substantial investment in its key producing blocks to take advantage of current favorable gas market dynamics.
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