Canacol Energy Ltd. · BVC:CNEC
Canacol Energy — Investor Presentation (May 2023)
24 slides from Canacol Energy's investor presentation, May 2023
Slide 1: Corporate Presentation May 2023
Corporate Presentation May 2023
Slide 2: Why Canacol
Why Canacol Colombia’s Largest Independent Natural Gas Producer Best in Class Assets & Financial Strength & Sustainability Management Discipline • Growing reserves, production, and cash • Supplying growing demand for clean- • Strong balance sheet flow burning gas in Colombia • Long-term fixed-price
Slide 3: Canacol at a Glance
Canacol at a Glance TSX : CNE BVC : CNE.C OTCQX : CNNEF Basic Shares O/S (MM) 1 34.1 Share Price (C$) 2 $10.05 Market Cap CAD$343MM - (US$MM) 2, 3 $253 Net Debt (US$MM) 4 $613 Enterprise Value (US$MM) $865 Quarterly Dividend (C$/sh) $0.26 Annual Yield (%) 2 10.3% Gas Reserves (bcf) 5 1P 2P Gross Res
Slide 4: Canacol's Unique Value Proposition in Colombia
Canacol’s Unique Value Proposition in Colombia Highlights Natural Gas Supply in Colombia(1, 4) 1,400 (in mmscfd) 30% 1 Largest independent natural gas producer 1,200 1,071 1,091 1,073 1,058 1,044 25% 1,000 984 20% 2 Only pure play company in the country 800 17% 17% 15% 600 16% 13% Largest supplier i
Slide 5: Solving Colombia's Forecast Natural Gas Supply Shortfall
Solving Colombia’s Forecast Natural Gas Supply Shortfall Colombia’s Proved Reserves (TCF)1 Colombia Gas Supply / Demand 1P 2.8 Tcf / RLI 7 years (2022) (mmcf/d)2 1,500.00 6 1,000.00 4 2 500.00 0 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2019 2020 2021 2022 2023 2024 2025 2026 Colombia
Slide 6: Natural Gas Will Lead The Energy Transition In Colombia
Natural Gas Will Lead The Energy Transition In Colombia Climate Change: • Colombia plans to use more gas to meet its Paris Energy Demand Projections (PJ)1 2,000 Agreement CO2 Emission Target: 51% ↓ by 2030 • Gas produces 50% less CO2 than Coal and 30% less than Oil 1,500 34% 25% 18% 21% Air Pollutio
Slide 7: Long-Term Supply Shortage = High and Stable Gas Prices
Long-Term Supply Shortage = High and Stable Gas Prices Canacol’s sales and transportation contracts give us a strong competitive advantage in meeting Colombia’s increasing gas demand. Realized Gas Price History (US$/Mcf)1 Volatility of Quarterly Average Prices2 $8 80% $7 70% $6 60% $5 50% $4 40% $3
Slide 8: Strong Track Record
Strong Track Record 2P Reserves (bcfe) 624 637 652 607 559 505 411 372 Natural Gas Sales (MMscfd) ~300 113 95 160 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 206 181 182 172 2P After-Tax NPV10 143 113 (US$MM)1 70 81 1,583 20 25 16 1,270 1,229 1,319 1,136 1,083 945 873 Exit rate 2013 2014 201
Slide 9: 2023 Plan: Capex and Gas Sales Guidance
CAPEX (US $MM) 2023 Plan $13 Gas Sales $13 160 – 206 MMscfpd Low end of sales guidance = firm take-or-pay contracts only $98 $163 $73 Capex $138 US$138 - $163 MM $23 $23 Drill up to 10 exploration and appraisal wells $21 $21 Targeting 200% reserves replacement ratio $8 $8 Seismic Acquisition Low Hig
Slide 10: Financial Flexibility
Financial Flexibility Debt Profile: • Senior Notes: $500 million Maturity: Nov 2028, Interest Rate: 5.75% Principal Maturities (US$mm) 500.0 Ratings: Fitch: BB, S&P: BB-, Moody’s Ba3 • Revolving Credit Facility: $200 million $75 million drawn ($35 million used to prepay existing credit facilities) M
Slide 11: Diversifying and Growing Canacol's Gas Market – Jobo-Medellin Pipeline
Diversifying and Growing Canacol’s Gas Market – Jobo-Medellin Pipeline Interior Market Coastal Market - Larger market (60% of Colombia’s Natural Gas Demand) - lots of - Canacol has grown to supply >50% of the coastal gas room to grow market share market, supporting increasing demand at a time of dec
Slide 12: Jobo-Medellín pipeline will connect Canacol's gas fields to the interior market
Jobo-Medellín pipeline will connect Canacol´s gas fields to the interior sales market of Colombia Pre-existing network fees prevent Canacol from supplying the Interior Market: ▪ Transport fees to Interior:~$5-$6 US/Mcf Solution: New Pipeline: ▪ 289 km, 22-inch gas pipeline ▪ Scheduled start-up: Dec
Slide 13: Positioned for Growth
Positioned for Growth Continue Utilizing Best-in-Class Technology and Expertise to De-Risk Large Resource Potential Large resource base Land (Gas): Mean Prospective Resources: Blocks: 11 Un-risked: 20.5 TCF Net Acres: 1.8MM Risked: 7.6 TCF Gross Prospective Resources (Bcf)1 Unrisked Risked Prospects
Slide 14: Industry-Leading Exploration Success Utilizing AVO
Industry-Leading Exploration Success Utilizing AVO* Uncalibrated 3D Calibrated 3D for AVO analysis Includes pay in ft. TVD Discovery Arandala-1 Prospect Cacahuate-1 30 ft. Carambolo-1 67 ft. Datil-1 Breva-1 29 ft. Nuez-1 Toronja-1 Nelson-5 14 ft. 79 ft. Nelson-6 39 ft. Exploration drilling success r
Slide 15: Middle Magdalena Valley Basin Overview
Middle Magdalena Valley Basin Overview CHIMELA- Middle Magdalena Basin 1 • Long history of oil and gas production from multiple VMM45 POLA-1 reservoirs. • Significant proven hydrocarbon potential in both deep Cretaceous- and shallower Tertiary-aged Legend rocks. Basin Middle Magdalena VMM53 • Cretac
Slide 16: Our ESG Strategy: Progressing Towards Net Zero & Sustainable Development
Our ESG Strategy: Progressing Towards Net Zero & Sustainable Development ESG Performance - Ratings We recognize the value of monitoring, evaluation and learning in ESG ratings year on year 2022 score: 2022 score: 2022 score: A 26,8 68 2021 Score: BBB 2021 score: 27,8 2021 score: 62 Rating scale: CCC
Slide 17: Our Progress Towards ESG Excellence
Our Progress Towards ESG Excellence Key Highlights Canacol is committed to explore and produce the natural gas needed to improve the quality of life for millions of Colombians in a safe, efficient, and cost-effective way A cleaner energy future A safe and committed team GHG emissions Energy Matrix a
Slide 18: Our Progress Towards ESG Excellence
Our Progress Towards ESG Excellence Key Highlights A society guided by sustainable A transparent and ethical business development Stakeholder, community 87.5% Independent directors Robust codes & policies and employee engagement Director and Board Committees- Management ESG Implemented more than 60
Slide 19: Supporting Colombia's Transition: GHG Emissions
Supporting Colombia’s Transition Canacol Beats its Peer Group in GHG Canacol is a leader in GHG emissions Intensity Per Unit of Production1 intensity in oil and gas industry standards 90 2,000 Direct and Indirect GHG emissions per US$ 80 1,800 of revenue (g CO2 eq / US$)2 1,455 Carbon Intensity (kg
Slide 20: Financial Performance and Valuation
Financial Performance and Valuation
Slide 21: Appendix: EBITDAX and Share Price Performance
Appendix: EBITDAX and Share Price Performance Adjusted EBITDAX1 (US$ mm) Relative share price performance2 $70 2 $60 $50 $40 1 $30 $20 $10 $0 0 2015/ene 2018/ene 2021/ene Q1/15 Q1/16 Q1/17 Q1/18 Q1/19 Q1/20 Q1/21 Q1/22 Q1/23 Canacol S&P/TSX Comp. S&P/TSX Capped En. COLCAP(CAD) EBITDAX 12-month avera
Slide 22: Advisories
Advisories This presentation is provided for informational purposes only as of May 2023, is not complete and may not contain certain material information about Canacol Energy Ltd. (“Canacol" or the "Company"), including important disclosures and risk factors associated with an investment in Canacol.
Slide 23: Advisories
Advisories Oil and Gas Information Barrels of oil equivalent (“boe”) and thousands of cubic feet equivalent (“MCFe”) Boe and MCFe may be misleading, particularly if used in isolation. A boe or MCFe conversion ratio of cubic feet of natural gas to barrels of oil equivalent and from barrels of oil to
Slide 24: Advisories
Advisories Natural gas recycle ratio is calculated by dividing natural gas netback by finding and development costs. 2P Recycle ratio of 1.7x for the year ended December 31, 2022 (calculated based on the natural gas netback of US$ 3.68 / Mcf for the year ended December 31, 2022) 2P Recycle ratio of