May 22 (Bloomberg) -- Canacol Energy Ltd., a Calgary-based oil company that operates in Colombia, gained the most in three weeks after saying two new wells began operating this month, representing about 20 percent of output.
Canacol advanced 2.9 percent to 4,790 pesos at 10:36 a.m. in Bogota after earlier gaining as much as 5.5 percent, the most since May 3 on an intraday basis. The shares have dropped 60 percent over the past year as output dwindled.
The company added net production of about 1,500 barrels of oil equivalent per day from the wells in Colombia and Ecuador, with seven more production wells planned for 2013, according to a statement today. Net production before the two wells averaged 7,900 barrels a day in the first two weeks of May, up from 7,500 barrels a day in April. In the first calendar quarter of this year, output had dropped 44 percent from a year earlier.
“This is a company that has gone from a very messy production situation back in 2012,” Justin Anderson, a Calgary-based analyst at Salman Partners, said in a telephone interview.
Canacol’s target for net average production before royalties is 7,500 to 8,500 barrels a day in 2013, according to a May 15 statement.
“We anticipate steady and significant production growth throughout the remainder of calendar 2013,” Chief Executive Officer Charle Gamba said in the statement.
The announcement should give confidence to investors that “it’s going to be pretty hard for them to miss their guidance” Anderson said.
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