Canacol Open to Offers After Drawing Interest Last Year
Canacol Energy Ltd. (CNE), Colombia’s best performing major stock in the past year, said it received two expressions of interest to buy the company last year and remains open to offers at the right price.
The unsolicited interest came from oil producers with operations in Colombia, the most recent of which was late last year, Chief Executive Officer Charle Gamba said in an interview today. Neither developed into formal offers. Shares rose 4.5 percent to an almost two-year high of 14,000 pesos in Bogota.
“We were approached by two other companies last year, large companies,” he said in his Bogota office. “We are always open to offers that offer our shareholders value.”
Canacol has returned investors 175 percent in the past year while the Colombian benchmark lost 3.4 percent. The company that also trades in Toronto and has operations in Colombia and Ecuador was in merger talks with C&C Energia Ltd. in 2012 before Pacific Rubiales Energy Corp. stepped in and bought C&C, Gamba said. The takeover closed January 2013.
Daily production at Canacol is about 13,000 barrels of oil equivalent and can reach 17,000 to 18,000 barrels by the end of the year, he said. The company’s official target this year is an average pre-royalty net production of 11,500 to 12,500 barrels a day, according to an April presentation.
After drilling the Pantro-1 exploration well in the Leono field, the company will case the well and conduct production testing over the next week. Results are expected early May.
“So far all the indications look good,” Gamba said.
The company will also drill the Tigro-1 and Pointer-1 exploratory wells in the LLA 23 block later this year.
Canacol announced March 17 plans to increase the size of an existing loan with a syndicate of banks led by Credit Suisse Group AG from $140 million to $220 million. While the company has no plans to sell new equity, it will consider later this year selling bonds to replace the bank loan, Gamba said.
The stock trades at 2.8 times book value, the highest ratio among stocks in the Colcap index after Bolsa de Valores de Colombia and Cemex Latam Holdings SA.
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