Canacol Energy Ltd. and ConocoPhillips sign agreement for Shale Oil Exploration project in Colombia
Thursday, Feb 28, 2013
Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE) (BVC:CNEC) is pleased to announce that its wholly-owned subsidiary, Canacol Energy Colombia S.A. ("CEC"), has entered into a farm-out agreement (the "FOA") with ConocoPhillips Colombia Ventures Ltd., a wholly-owned subsidiary of ConocoPhillips Company ("ConocoPhillips") (NYSE:COP) for the exploration and potential development of the Corporation's operated Santa Isabel exploration and production ("E&P") contract located in the Middle Magdalena basin of Colombia. The Santa Isabel E&P contract is one of five contracts that Canacol has interests in totaling approximately 334,000 net acres that expose the Corporation to a potentially large unconventional shale oil play, as supported by recent drilling results on the Corporation's adjacent VMM2 contract.
Charle Gamba, President and CEO of the Corporation, commented, "ConocoPhillips brings significant experience, technology, research and financial resources to this shale oil joint venture with Canacol, and we look forward to working with their team to explore the substantial shale oil potential on the Santa Isabel contract. We are now partnered with three major international oil companies, ExxonMobil Exploration Colombia, Shell Colombia, and now ConocoPhillips, looking to unlock the potential of this large and significant resource in Colombia. The results of the recently drilled Mono Arana 1 well confirm the very promising nature of this play on our acreage position in this basin. We look forward to spudding the first exploration well on the Santa Isabel contract, the Oso Pardo 1 well, in the second quarter of 2013 with our new co-venturers, ConocoPhillips. This well is designed to test the potential of both a conventional light oil target in the Tertiary Lisama reservoir, and more importantly the potential of deeper Cretaceous oil reservoirs within the La Luna reservoir."
The Corporation has exposure to approximately 334,000 net acres of shale oil potential on five contracts located in the Middle and Upper Magdalena Basins which include VMM 2 (20% interest, 15,000 net acres, ExxonMobil operator), VMM 3 (20% right to back in, 17,000 net acres, Shell operator), Santa Isabel (30% operated interest, 30,000 net acres), COR 39 (70% operated interest, 95,000 net acres), and COR 11 (70% operated interest, 177,000 net acres).
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