Edison Investment Research Limited 
Canacol Energy (CNE): Ready to exploit Colombian tightening gas market 
14-Jan-2021 / 08:00 GMT/BST 
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London, UK, 14 January 2021 
Canacol Energy (CNE): Ready to exploit Colombian tightening gas market 
As we look across the E&P investment universe, few companies potentially offer greater asymmetric risk/reward upside 
compared with Canacol. The company is playing into a tightening Colombian gas market, which should continue to support 
favourable pricing and longer-term growth plans. However, even with existing pipeline infrastructure and a conservative 
outlook on exploration and appraisal success, our 2P + risked exploration base case valuation of CUSD5.87/share 
represents 59% upside to the current share price, while the downside is protected through existing take-or-pay 
contracts that suggest a low case based on 2021 take-or-pay contracted capacity (153mmscfd) of CUSD3.50/share. Under our 
current assumptions, which include Canacol's dividend equivalent to a 5.7% yield, we anticipate planned capex and cash 
dividends to be covered by the company's existing cash and cash generation. 
 
Our base case valuation stands at CUSD5.87/share and assumes the world will return to normal in 2022, with gas sales 
resuming to pre-COVID-19 levels. With fixed gas prices for the medium term and 624bcf 2P reserves, the downside 
exposure to this valuation is limited to exploration success and decreased gas demand. In a scenario where exploration 
adds zero value, core NAV stands at CUSD3.62/share. Conversely, utilising existing infrastructure to the maximum suggests 
an unrisked upside valuation of CUSD7.78/share, while the expansion case currently being progressed could increase the 
upside valuation to CUSD9.17/share. 
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For more information please contact Edison: 
Ian McLelland, +44 (0)20 3077 5756 
Elaine Reynolds, +44 (0)20 3077 5713 
oilandgas@edisongroup.com 
 
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1160475 14-Jan-2021

(END) Dow Jones Newswires

January 14, 2021 03:00 ET (08:00 GMT)