Canacol entered the gas business in Colombia through the acquisition of Shona Energy Company in late 2012, which gave the company its current interests in the Esperanza E&E Contract and the VIM 21 E&P Contract. The company’s gas-focused acreage was expanded with the acquisition from OGX of the VIM 5 and VIM 19 E&P Contracts in 2014. The VIM 33, VMM 45 and VMM 49 E&P were awarded in a bid round administered by the ANH in 2019, while the VIM 44 E&P Contract and the VMM 47 E&P Contract were awarded in a bid round administered by the ANH in 2020.
At the time of the Shona acquisition, production was just 14 mmscf/d of natural gas from four fields producing from Cienaga de Oro sandstone reservoirs on the Esperanza block, with sales exclusively to a nearby mining operation, and proved plus probable (“2P”) natural gas reserves were assessed at just 95 billion cubic feet.
In early 2014, after completing a thorough review of the exploration potential, Canacol began a large and ultimately highly successful exploration and appraisal drilling effort that has dramatically expanded our natural gas reserves base with 23 successful exploration and appraisal wells (out of 28 wells drilled), including new discoveries on the VIM 21 and VIM 5 contract areas, and proving the multi-zone potential of the company’s prospective acreage position with new discoveries in the Porquero Formation, in addition to a number of important discoveries in the main producing reservoir in the Cienaga de Oro Formation (CDO). From the Shona acquisition to year-end 2019, Canacol has added 771 bcf of 2P gas reserves through discoveries and technical revisions.