Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE)(BVC:CNEC) is pleased to announce the second flow test result from the Leono 1 exploration well located on the LLA23 Exploration and Production ("E&P") Contract in the Llanos Basin of Colombia, and to provide an update of net Corporate production. As previously reported, the Leono 1 well encountered 133 feet ("ft") of net oil pay in four separate reservoirs. The Corporation has an 80% operated working interest in the LLA23 contract, with Petromont Colombia S.A. Sucursal Colombia holding the remaining 20% interest. On December 16, 2014 the Corporation announced that the Barco reservoir flow tested at a gross rate of 1,863 barrels of oil per day ("bopd") (1,490 bopd net) of light oil.
Charle Gamba, President and CEO of Canacol, stated, "The excellent productivity and the high quality of the light oil recovered from the Barco and Gacheta reservoirs confirm a significant discovery for Canacol at Leono. We plan to drill four appraisal wells back to back in order to fully appraise this find, and then move right into a development drilling program to bring production up as quickly as possible in calendar 2014. We also plan to drill two exploration prospects located between Leono and Labrador in the first half of calendar 2014, and anticipate additional oil finds along what is turning out to be a very prolific light oil trend on this block. The Leono discovery, as well as the Mono Arana oil discovery in the Middle Magdalena Valley of Colombia where we are currently drilling, are anticipated to be the main drivers for strong oil production growth in 2014."
Leono 1
The Leono 1 well was spud on November 9, 2013 and reached a total depth of 11,995 feet measured depth ("ft md") on November 26, 2013 with strong oil and gas shows encountered while drilling through the primary reservoir targets. The well encountered 133 ft of net oil pay in the following reservoirs: 13 ft of net oil pay within the C7 reservoir with an average porosity of 19%, 27 ft of net oil pay within the Barco reservoir with an average porosity of 18%, 69 ft of net oil pay within the Gacheta reservoir with an average porosity of 20%, and 24 ft of net oil pay within the Ubaque reservoir with an average porosity of 24%.
The Gacheta reservoir was perforated from 11,426 - 11,446 ft md and flowed at a stable gross rate of 1,869 bopd (1,495 bopd net) of 37 degrees API oil @ 122 degrees F with 14% water cut using a jet pump set to 1,600 pounds per square inch injection. Water cut fell throughout the course of the test and management believes the produced water to be related to completion fluids used to the drill the well.
The Corporation plans to leave the Leono 1 well on production from the Gacheta subject to the approval of the Agencia Nacional de Hidrocarburos, which the Corporation anticipates will occur in late December 2013. Canacol is planning to drill four appraisal wells at Leono commencing the first week of January, 2014, the formal evaluation program for which is presently being prepared for submission to the ANH as required, and will provide updates when relevant information becomes available.
