Global Energy Development Share Discussion Threads

[lowflow] 27/2/2013 12:01

Just got the financial farm-in terms for the farm in from Canacol. The terms are amazing. The total value of the deal is USD 273.5m which is amazing compared to recent farm-in by Shell and Exxon.

Farm in value:

13 wells, cost per well of USD 20m, total value USD 260m
USD 13.5m in cash bonus
Total value USD 273.5m.

And to be very clear there are no booked reserves on the Santa Isabel block today and almost no exploration has been done on the block yet, while GED has already 37m boe of 2P reserve on the Bolivar block next to the Santa Isabel block which they are farming out.

[rcturner2] 27/2/2013 11:49

lowflow - good find

[lowflow] 27/2/2013 11:44

ConocoPhillips farms into shale block next to GED Bolivar block. They are farming into the Santa Isabel block owned by Canacol Energy. The terms looks very good. ConocoPhillips will earn a 70% interest after drilling 5 exploration wells and 8 appraisal wells testing and developing the shale and Canacol will also get a USD 13.5m in cash. These terms are considerably better compared to recent farm-outs made in the shale play.

GED is in the process of farming out their Bolivar block. GED should get even better terms than Canacol got for the Santa Isabel block because there are already proved reserves on the Bolivar block and 4 wells has already been drilled de-risking the shale.


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Canacol Energy Ltd. and ConocoPhillips Sign Agreement for Shale Oil Exploration Project in Colombia

CALGARY, ALBERTA -- (Marketwire) -- 02/27/13 -- Canacol Energy Ltd.
("Canacol" or the "Corporation") (TSX:CNE) (BVC:CNEC) is pleased to announce that its wholly-owned subsidiary, Canacol Energy Colombia S.A. ("CEC"), has entered into a farm-out agreement (the "FOA") with ConocoPhillips Colombia Ventures Ltd., a wholly-owned subsidiary of ConocoPhillips Company ("ConocoPhillips") (NYSE:COP) for the exploration and potential development of the Corporation's operated Santa Isabel exploration and production ("E&P") contract located in the Middle Magdalena basin of Colombia. The Santa Isabel E&P contract is one of five contracts that Canacol has interests in totaling approximately 334,000 net acres that expose the Corporation to a potentially large unconventional shale oil play, as supported by recent drilling results on the Corporation's adjacent VMM2 contract.

Charle Gamba, President and CEO of the Corporation, commented, "ConocoPhillips brings significant experience, technology, research and financial resources to this shale oil joint venture with Canacol, and we look forward to working with their team to explore the substantial shale oil potential on the Santa Isabel contract. We are now partnered with three major international oil companies, ExxonMobil Exploration Colombia, Shell Colombia, and now ConocoPhillips, looking to unlock the potential of this large and significant resource in Colombia. The results of the recently drilled Mono Arana 1 well confirm the very promising nature of this play on our acreage position in this basin. We look forward to spudding the first exploration well on the Santa Isabel contract, the Oso Pardo 1 well, in the second quarter of 2013 with our new co-venturers, ConocoPhillips. This well is designed to test the potential of both a conventional light oil target in the Tertiary Lisama reservoir, and more importantly the potential of deeper Cretaceous oil reservoirs within the La Luna reservoir."

The Corporation has exposure to approximately 334,000 net acres of shale oil potential on five contracts located in the Middle and Upper Magdalena Basins which include VMM 2 (20% interest, 15,000 net acres, ExxonMobil operator), VMM 3 (2 0% right to back in, 17,000 net acres, Shell operator), Santa Isabel (30% operated interest, 30,000 net acres), COR 39 (70% operated interest, 95,000 net acres), and COR 11 (70% operated interest, 177,000 net acres).

Key terms and conditions

Pursuant to the terms of the FOA, ConocoPhillips will carry the cost of the drilling, completing, and testing of up to 13 wells (presently expected to comprise 5 exploration and 8 appraisal wells), covering in full actual drilling, completion, and testing costs, to earn 70% of Canacol's 100% working interest in the deeper Cretaceous section.
Canacol will retain 100% interest in the shallow Tertiary section.
ConocoPhillips will also pay Canacol a bonus of US$ 13,500,000 in two separate tranches upon the fulfillment of certain conditions outlined in the FOA. Canacol will remain operator of Santa Isabel for the drilling, completion, and testing of up to the second exploration well. The first exploration well, Oso Pardo 1, is anticipated to be spudding in the second quarter 2013. The formal assignment of the working interest as contemplated by the FOA is subject to the approval of the Agencia Nacional de Hidrocarburos (ANH) of Colombia.

Santa Isabel E&P Contract

Located in the Middle Magdalena basin, the Santa Isabel E&P contract exposes Canacol to a potentially large, unconventional shale oil fairway in the thick Cretaceous La Luna and Tablazo formations analogous to the Eagle Ford formation in the United States and the Vaca Muerta Formation in Argentina. Ranked as one of the most productive source rocks in the world, the La Luna is also the primary source rock in Venezuela's Maracaibo basin, which contains over 250 billion barrels of recoverable oil.

Canacol Energy is an exploration and production corporation 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 CNEC, respectively.

[mdara] 21/2/2013 16:39

One would like to think we held onto the best ))

[fuiseog] 20/2/2013 17:39

Que pasa?

By this time in 2012 we had 3 RNS's about operations. It must be time some of the following have progressed to conclusion.

The frakking in the Olivio no. 2 well in the Bolivar area

The farm-out option – any interest?

The adjustment to the CHOPS process in the Torcas 5 well in the Torcas field.

In the Rio Verde area – is the output of Tilodoran no. 2 to prognosis and is the water injection process working well and achieving the budgeted savings?

It would be good to have an ops update well in advance of March finals. Or is it just me watching the paint drying?

[fuiseog] 20/2/2013 17:38

Yes, the low volume shows we have a very elastic share price here. It will be interesting, or more hopefully enriching, to see the response if and when good news comes.

[morph7] 20/2/2013 16:23

no volume though

[melodrama] 20/2/2013 16:14

move starting

[hyperboreus] 20/2/2013 11:44

The waiting game continues... MM only quoting up to 3,000 for buying @ 107.50p, no problem selling 10,000+ @ 105.00p at the moment.. results due out around the end of next month but of more importance is an announcement re farm-out etc hopefully sooner rather than later.

[geraldton1] 19/2/2013 11:36

Still very tricky to buy any of these in any size...

[rcturner2] 14/2/2013 14:02

Good strong support at 100p.

[wooster4] 14/2/2013 13:44

start of the next leg up??? News on a couple of fronts due.

[geraldton1] 14/2/2013 11:06

Just tried to buy a few and couldnt get any! All market makers are bidding.

[rcturner2] 13/2/2013 16:34

I tried to get some more shares below 100p. As soon as I put the order in, the spread was moved up!

[geraldton1] 13/2/2013 16:22

Agreed Wooster but as I have said in earlier posts, the management have been buying in over recent weeks at higher levels. Shares are well bid at the moment...but agreed, it needs to get some news out! With oil prices where they are they must be generating a lot of cash in existing operations. Also, any positive news on the partnering front could help set it alight.

[wooster4] 13/2/2013 16:18

must admit whilst the company is well managed (in terms of finance anyway), progress is annoyingly slow!!

[philo124] 12/2/2013 10:36

Let's hope the BOD make up for it then.

[fuiseog] 12/2/2013 10:33

Peruvian license area 95 belonged to GED but they just wern't getting on with it. GED sold 60% interest in the Peruvian 95 explo area to GTE in 2010 for a free carry on the first well (that's this one). But we sold the remaining 40% interest to them at 1st June 2012, when Steven Voss (MD of GED) said ""Prolonged force majeure status of the Block 95 Contract and rising anticipated exploratory well costs led to our decision to sell our remaining working interest. This sale allows the Company to remain focused on our core value contract areas in the Middle Magdalena Valley and Llanos Basin in Colombia, South America."



There was a previous discovery on this license so I was surprised when GED relinquished all interest in it.

[rcturner2] 12/2/2013 09:06

What's the connection to GED?

[fuiseog] 12/2/2013 08:52

Gran Tierra Energy (GTE.TSX)announce positive result in our former Peruvian license. (thanks to thegreatgeraldo on TMF)

"Initial drilling results from the Bretaña Norte 95-2-1XD exploration well in Peru indicate oil-saturated reservoir with a gross oil column of 99 feet that was encountered approximately 48 feet higher than oil discovered at Bretaña-1 approximately four kilometers away."

"As previously announced, this prospect contains substantial contingent resource potential, so these initial results are extremely exciting," said Dana Coffield, President and Chief Executive Officer of Gran Tierra Energy..."



With further testing expected to complete by end of February, this could shape up to be a very successful prospect.

[rcturner2] 01/2/2013 11:03

100p or just below seems to be support here. Bounced off that twice now.

[snatander] 30/1/2013 23:51

Any chartists think the next chart support is at 70p?

[rcturner2] 30/1/2013 16:47

Well it enabled me to have a small nibble below 100p anyway. Good luck all.