Canacol decreases y-o-y exploration spend, postpones Pola-1 drilling

Canacol Energy Ltd. decreased its year-over-year capital spending plan, allocating $138-151 million in 2024 compared with $205 million in 2023.

The largest decrease for the Colombia-focused company will be in exploration spend, which is set at $48-56 million this year, down from the $90 million allocated in 2023. Spending for development and maintenance decreased to $73-77 million, compared with $95 million in 2023.

In first-half 2024, Canacol plans to carry out development drilling and reconditioning and will invest in additional compression and processing infrastructure. The operator also plans to drill four exploration wells and complete acquisition of 249 sq km of 3D seismic.

"The long-term plan is focused on maintaining and growing our reserve and production base from our main assets in the Lower Magdalena Valley basin, aiming to use all existing transportation infrastructure," said Charle Gamba, Canacol’s president and chief executive officer.

Canacol adjusted 2024 plans on the expectation of a favorable gas market dynamic. "We are strategically prioritizing investments in the VIM basin, so we have decided to postpone until 2025 the drilling of the Pola-1 exploration well, located in the Middle Magdalena Valley basin," he said (OGJ Online, Mar. 21, 2022).

Gamba said the company’s long-term focus is on maintaining and expanding the reserve and production base, exploring high-impact opportunities, and “obtaining Bolivian government approval for a fourth [exploration and production] contract, covering the reactivation of an existing gas field, to begin development operations with a view to adding reserves and production and starting gas sales in 2025.”