CNE.t/CNNEF & GTE
Energy Summary for April 21, 2016
(like this person writing syle)
by Stockwatch Business Reporter
Colombia-focused Canacol Energy Ltd. (CNE) added two cents to $3.99 on 3.32 million shares, after announcing the achievement of a long-held goal: to boost its Colombian gas production to 90 million cubic feet a day, five times the 18 million cubic feet a day it was producing in the fall of 2014, when it first started to publicly plan its gassy expansion. Originally it hoped to achieve production of 83 million cubic feet a day in December, 2015, supported by sales contracts to protect it from fluctuating gas prices. It later bumped the production goal to 90 million cubic feet a day, but pushed the timeline out into 2016 because of pipeline delays. Canacol's expectation this year was that the pipeline would be fully ready by March 31. It ended up taking a few extra weeks, but now it is finished, as is another gas infrastructure project, the expansion of the Canacol-operated Jobo plant's capacity to over 180 million cubic feet a day from 80 million (something that was also scheduled to be done in March but apparently ran slightly behind schedule). Canacol patted itself on the back this morning and trumpeted the $153-million (U.S.) in gross revenues it expects to receive this year. (Nowhere was the back-thumping heard more loudly than in its new on-line presentation, which praises "pathfinding" "leader" for "Solving Colombia's [Epic] gas supply deficit" through "Advantage Canacology.") Of course, much of this morning's news had already been priced into Canacol's stock, which at $3.99 has added 70 cents in the last two weeks alone. The company will have to work hard over the rest of the year to keep investors this happy. Its plans, as stated by its president and chief executive officer, Dr. Charle Gamba, include drilling two more gas wells of a three-well program and releasing a reserve report for the first well of that program, Oboe-1. The report is scheduled to be released in June.
GTE Back in Colombia, Gran Tierra Energy Inc. (GTE) added five cents to $3.68 on 3.68 million shares, after receiving some boosterish attention from analysts. Scotia Capital's Gavin Wylie wrote in a new research note that he is impressed with Gran Tierra's "ample financial capacity and operational torque." The company has $150-million (U.S.) in working capital, is undrawn on its $200-million (U.S.) credit facility and recently raised $100-million (U.S.) through a convertible note offering, said Mr. Wylie. That gives it plenty of money to pursue acquisitions, perhaps from state-owned Ecopetrol, which (according to Mr. Wylie) is expected to move into its second round of farm-out offerings over the next month. Gran Tierra could also explore and develop its existing Colombian assets. Either way, Mr. Wylie reckons that this could be the year in which Gran Tierra overcomes its "perceived lack of medium- to long-term growth visibility." Another, even more bullish analyst, Paradigm Capital's Ian Macqueen, talked up Gran Tierra this morning to Bloomberg, along with another producer in Colombia, Parex Resources Ltd.
