Canacol Energy Ltd. announced that Oboe 1, an appraisal well drilled in its Clarinete gas field on the VIM 5 Exploration and Production (“E&P”) Contract, has tested at a final rate of 13 million standard cubic feet per day (“MMscfpd”) (2,281 barrels of oil equivalent “boepd”) of dry gas with no water from the third and shallowest test interval within the Cienaga de Oro (“CDO”) reservoir. This flow test is the third of three separate tests executed on three separate gas bearing reservoir intervals within the CDO reservoir encountered in the Oboe 1 well. The first test interval deeper within the CDO tested at a final rate of 26 MMscfpd (4,561 boepd) as reported on February 25, 2016, while the second test interval flowed at a final rate of 27 MMscfpd (4,737 boepd) as reported on March 2, 2016.

Canacol, through its wholly owned subsidiary CNE Oil & Gas S.A.S., holds a 100% operated interest in the VIM 5 E&P contract. The Oboe 1 well was spud on January 19, 2016 and reached a total depth of 9,750 feet measured depth (“ft md”) on February 7, 2016. Oboe 1 encountered 158 feet of net gas pay with average porosity of 23% within multiple stacked sandstone reservoirs in the primary Tertiary-aged Cienaga de Oro target, representing the thickest gas pay encountered in the Cienaga de Oro in the Clarinete discovery thus far.

The CDO sandstone reservoir was perforated between 7,108 and 7,122 ft md within the third interval to be tested. Flow testing of this interval achieved a final rate of 13 MMscfpd (2,281 boepd) of dry gas using a 2-inch choke with a tubing head pressure of 360 pounds per square inch with no water at the end of a 32 hour flow test period. The third test interval is currently shut in for a pressure build up that is expected to conclude in 3 days.

Three separate reservoir intervals have now been successfully tested in the well: the first interval between 8,116 and 8,683 ft md (which flowed 26 MMscfpd /4,561 boepd), the second interval between 7,309 and 8,106 ft md (which flowed 27 MMscfpd /4,737 boepd), and the third interval between 6,556 and 7,270 ft md, (the subject of this flow test). Upon the conclusion of the pressure buildup of the third flow test interval, all of the remaining gas bearing sands in the entire CDO will be perforated and the well will be tied into the Jobo gas production facility and placed on permanent production.