Canacol Energy - Canacol maintains drilling pace into 2022

We have updated our valuation of Canacol Energy to reflect management guidance for 2022 and its preliminary expectations for 2021. Our valuation per share decreases to C$5.69 from C$6.12. Management expects gas sales for 2022 to be between 160mmscfd and 200mmscfd, with the midpoint in line with realised average sales for December 2021 of 183mmscfd. Capex of US$172m to US$209m will cover up to 12 exploration and development wells, three of which will step outside the company’s historical core area, as it targets a reserves replacement ratio of over 200%. Management will also focus on progressing work on the Jobo to Medellin pipeline, which will add 100mmscfd of sales capacity by the end of 2024.