Canacol Energy Ltd. provide the results of its Agueda 1 ST exploration well on the Labrador prospect on the LLA23 Exploration and Production (E&P) Contract, located immediately to the north of the Corporation's Rancho Hermoso field in the Llanos Basin of Colombia.

Unlike the Rancho Hermoso field, which is governed by contracts with Ecopetrol S.A., the LLA23 contract is governed by the Agencia Nacional de Hidrocarburos, which receives a variable base royalty beginning in an 8% related to gross production resulting in 2-3 times better netbacks and reserve valuations than those available under the Rancho Hermoso tariff and non-tariff contracts.

The Corporation has an 80% operated working interest in the LLA23 contract, with Petromont Colombia S.A, Sucursal Colombia holding the remaining 20% interest. The Agueda 1 ST exploration well targeted various reservoir intervals within the Labrador prospect, situated approximately 5 kilometers to the north of the Corporation's Rancho Hermoso field.

The Agueda 1 ST encountered 70 feet of oil pay within the C7, Lower Gacheta, and Ubaque reservoirs, all of which are productive to the south in the Rancho Hermoso field. A production test of the Lower Gacheta reservoir yielded 1,832 barrels of gross oil per day (1,466 barrels of net oil per day for Canacol) of 28 degree API light oil.

Tags: Canacol Energy Inc.