The World Economic Forum’s Global Risks Report 2024 has highlighted the water supply crisis as the most critical risk for the next decade. Although our operations do not require significant water quantities, the efficient use and conservation of water resources remain fundamental for the development of our projects and the neighboring communities.

To ensure that our operations do not affect the availability of local water supply, we establish a baseline before project implementation. This enables us to conduct systematic monitoring throughout the project, overseeing water sources and guaranteeing that our activities do not compromise this natural resource.

We employ an impact evaluation methodology to identify potential changes, categorize environmental incidents, and project alterations in local water availability that could affect neighboring communities or ecosystem services.

Following reverse osmosis treatment during the drilling phase, we reuse the water used in our drilling processes. This recycled water is employed in the formulation of drilling fluids and for road dampening to reduce particulate matter resulting from traffic.

We take pride in reporting that Canacol has upheld an unblemished track record concerning water-related incidents. Our dedication to responsible management has enabled us to effectively safeguard this vital resource, preventing any incidents that could affect its quality or availability. We remain committed to upholding this exceptional track record, reaffirming our commitment to the protection and preservation of water throughout all our operations and activities.

For further information regarding water management, please refer to the 2023 ESG report.

We systematically monitor and map water consumption within our operational region using a comprehensive water management tool that considers local water stress levels, using the World Resources Institute's Water Risk Atlas. Collaborating with the Colombian Institute of Hydrogeology, Meteorology and Environmental Studies (IDEAM), we have evaluated water stress levels at our work sites, thereby confirming that our operations occur in regions with minimal water stress.

• Water Stress Analysis: Our operational sites in the departments of Sucre and Córdoba (indicated by the green dots on the map), exhibit no decline or only a low level of decline in groundwater levels (as in VIM-33).
• Analysis of Water Stress/Global Water Risk: The departments of Córdoba and Sucre, where our operations are located (marked with green dots), are classified as a low-medium water risk.

Taken from Aqueduct Water Risk Atlas | World Resources Institute (wri.org)

Water Management Policy

For further insights into water management, please refer to our 2023 ESG report.

Water Risk Management Programs

Dependency-related water risks considered in risk Assessment: Canacol conducts hydrological and hydrogeological studies to assess the water potential in its areas of operation. Additionally, according to data from the World Resources Institute (WRI), our operations are not located in water-stressed areas. At Canacol, we implement water supply controls as established by the environmental license and develop water reuse activities to prevent conflicts related to this issue. It is important to mention that, since our operations are primarily focused on natural gas, they do not have excessive water requirements, allowing us to meet these needs without generating significant impacts.

Impact-related water risks considered in risk Assessment: For impact control, at Canacol we develop recirculation processes for water utilization, ensuring that there is no contamination of water sources. Additionally, we do not carry out any surface water extraction or discharges, thus preventing the contamination of water bodies. The Company's risk assessments indicate that this risk is low and remains controlled due to frequent reviews by the environmental authority, which includes a piezometric monitoring network for the water reinjection processes.

Assessment of impacts on local stakeholders: According to the hydrological and hydrogeological studies that have been conducted, as well as the historical water demand data from the operation, we can determine that our operations have not affected the availability of the resource for the various stakeholders involved in the project. Similarly, to avoid increasing the demand from the operation, we have established goals to limit water consumption, implemented license controls that restrict the amount of water we can extract, and conduct ongoing monitoring of water sources to ensure that we do not affect the quality of the existing resource, which is shared with the communities in the area of interest.

Assessment of future potential regulatory changes at a local level: At Canacol, we periodically conduct follow-up analyses of water regulations in collaboration with environmental authorities at the local and national levels.