Canacol Energy Ltd. Announces 2013 Production Guidance and Capital Program

Canacol Energy Ltd. Announces 2013 Production Guidance and Capital Program 
CALGARY, ALBERTA -- (Marketwire) -- 01/29/13 -- Canacol Energy Ltd.
("Canacol" or the "Corporation") (TSX:CNE) (BVC:CNEC) is pleased to
provide its 2013 capital program and production guidance. The
Corporation plans to spend gross capex of US$ 67 million in calendar
2013 on drilling, work overs, seismic, production facilities, and
pipelines in Colombia and Ecuador, and anticipates net average
production before royalties of between 7,500 and 8,500 barrels of oil
equivalent per day ("boepd"). Average production for the month of
December 2012 was 8,366 boepd before royalties, stated on a pro forma
basis to include the results of the recently acquired production
assets of Shona Energy Company, Inc. The production split for 2013 is
expected to be approximately 60% oil from its Labrador, Rancho
Hermoso, Libertador-Atacapi, and Capella fields in Colombia and
Ecuador, and 40% gas from its operated gas fields at Esperanza in
Colombia, which is subject to long-term price contracts and
attractive netbacks. 
Charle Gamba, President and CEO of Canacol, stated "In 2013 the
Corporation will focus on 1) building out production from recent oil
discoveries on LLA23 and VMM2 and increasing production levels from
the newly acquired Esperanza gas field in Colombia via new sales
contract, 2) continuing to increase production from our
Libertador-Atacapi oil field in Ecuador, and 3) execute a significant
oil focused exploration program in Colombia targeting both
conventional light and heavy oil, and unconventional light oil.
Exploration projects of significance for 2013 include exploration
wells on LLA23 targeting light oil, exploration wells on each of our
three Middle Magdalena blocks targeting both shallow conventional
light oil and deeper unconventional shale oil, and the continuation
of the heavy oil exploration program on assets in the Putumayo -
Caguan Basin. Between a combination of existing cash and working
capital, cash flow from production, and debt facilities, the
Corporation is well financed to execute our capital program." 
The focus for calendar 2013 oil production is on high netback oil
primarily from the Labrador, Rancho Hermoso, Capella, and
Libertador-Atacapi fields, which are anticipate
d to yield net average
production of approximately 5,000 bopd before royalties. Tariff oil
production from the Libertador-Atacapi and Rancho Hermoso fields is
anticipated to yield net average production of approximately 1,000
bopd. High netback tariff production from the Libertador-Atacapi
field in Ecuador is expected to grow to an average of approximately
900 bopd for calendar 2013. The very low netback tariff production
from the Mirador reservoir at Rancho Hermoso, which in the past
formed a relatively high percentage of the Corporation's average
gross production, is expected to average approximately 100 bopd for
calendar 2013. Existing Mirador producers in Rancho Hermoso are
planned to be converted to higher netback net royalty producers from
the C7, Barco, Gacheta and Ubaque by the end of the calendar second
quarter of 2013. Production from the recently announced Mono Arana
discovery in Colombia is not included in the above guidance, even
though the well is currently on long-term production test. Once a
development plan has been approved by the consortium, the
Corporation's guidance will be revised upwards accordingly. 
Net before royalty gas production from the Esperanza field located in
Colombia is anticipated to average approximately 3,000 boepd. The
Corporation is currently negotiating an additional sales contract
with a current buyer to increase volumes by approximately 5 million
MMcfpd (833 boepd) effective April 1, 2013. The Corporation is also
negotiating other opportunities that could yield additional gas sales
in 2013 and beyond. 
In calendar 2013, the Corporation plans to drill 8 gross exploration
wells on its blocks in Colombia targeting a management estimate of
316 million net barrels unrisked (48 million barrels risked) of mean
prospective oil resource. Light oil exploration drilling activities
for 2013 will focus on the Corporation's LLA 23 block in the Llanos
Basin, and the Santa Isabel, VMM2 and VMM3 blocks in the Middle
Magdalena Basin, where the Corporation has recently experienced
exploration success (the Labrador discovery on LLA23, and the Mona
Arana discovery on VMM2). ExxonMobil Exploration Colombia and Shell
Colombia will be carrying the cost of one exploration well on each of
VMM2 and VMM3 respectively in 2013. Conventional heavy oil
exploration efforts will focus on the Corporation's blocks located in
the Caguan - Putumayo Basin of Colombia. The Corporation plans to
drill 7 gross development wells and workover 16 existing producing
wells in its fields located in Colombia and Ecuador. The Corporation
plans to spend approximately US$ 46 million gross capex on its
activities in Colombia, and approximately US$ 21 million gross capex
on its activities in Ecuador. Funding for the 2013 capital program is
expected to come from existing working capital, operating cash flows
and debt facilities. 
Canacol is an exploration and production company with operations
focused in Colombia and Ecuador. The Corporation's common stock
trades on the Toronto Stock Exchange and the Colombia Stock Exchange
under ticker symbol CNE and CNE.C, respectively. 
This press release contains certain forward-looking statements within
the meaning of applicable securities law. Forward-looking statements
are frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions "may"
or "will" occur, including without limitation statements relating to
estimated production rates from the Corporation's properties and
intended work programs and associated timelines. Forward-looking
statements are based on the opinions and estimates of management at
the date the statements are made and are subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ materially from those projected in the
forward-looking statements. The Corporation cannot assure that actual
results will be consistent with these forward looking statements.
They are made as of the date hereof and are subject to change and the
Corporation assumes no obligation to revise or update them to reflect
new circumstances, except as required by law. Prospective investors
should not place undue reliance on forward looking statements. These
factors include the inherent risks involved in the exploration for
and development of crude oil and natural gas properties, the
uncertainties involved in interpreting drilling results and other
geological and geophysical data, fluctuating energy prices, the
possibility of cost overruns or unanticipated costs or delays and
other uncertainties associated with the oil and gas industry. Other
risk factors could include risks associated with negotiating with
foreign governments as well as country risk associated with
conducting international activities, and other factors, many of which
are beyond the control of the Corporation. Other risks are more fully
described in the Corporation's most recent Management Discussion and
Analysis, which is incorporated herein by reference and is filed on
Canacol Energy Ltd.
Investor Relations
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