Canacol Rallies as Drilling Begins at Shared Well: Bogota Mover

Canacol Energy Ltd., a Calgary-based oil company that operates in Colombia, rose to a two-month high after saying it had started drilling a shale oil exploration well shared with ConocoPhillips.

The shares of Canacol advanced 4.4 percent to 5,510 pesos at 12:54 p.m in Bogota, the highest level on a closing basis since April 1. The company was the best performer on the Colcap index, which fell 0.6 percent.

Canacol said today that it started drilling an exploration well at the Santa Isabel site in Colombia to test for shallow oil and the potential for a deeper shale supply. Chief Executive Officer Charle Gamba said in a statement that he was “optimistic” on the the Oso Pardo 1 well.

The “shale opportunity is so enormous that it can’t be ignored,” Christopher Brown, an analyst at Canaccord Genuity Corp., said in a telephone interview from Calgary. The well “will give us a good feel for how big the prize could be.”

Canacol will hold a 30 percent stake in the deeper section of the site, with Houston-based ConocoPhillips controlling the remaining 70 percent pending government approval.

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