Canacol Energy (CNE) Q2 2024 earnings summary

Executive summary

• Achieved record natural gas prices, netbacks, and adjusted EBITDAX in Q2 2024, with realized prices up 33% year-over-year and netbacks up 36% year-over-year.

• Realized quarterly EBITDA/EBITDAX reached up to $73.8 million, reflecting strong operational and market performance.

• Exploration and development programs delivered a 100% drilling success rate, with new discoveries tied into production.

• ESG performance recognized with top industry ratings and significant reductions in GHG emission intensity.

• Maintained strong operational efficiency with reduced costs and capital expenditures.

Financial highlights

• Realized gas price of $6.84 per Mcf, up 33% year-over-year; operating netback of $5.34 per Mcf, up 36% year-over-year.

• Total revenues (net of royalties and transportation) were $88.3 million, up 18% year-over-year.

• Adjusted EBITDAX rose up to 22% to $73.8 million; adjusted funds from operations increased up to 70% to $60.7 million year-over-year.

• Net loss of $21.3 million in Q2 2024, compared to net income in Q2 2023, due to a non-cash deferred tax expense from Colombian peso devaluation.

• Net cash capital expenditures decreased to $33.9 million in Q2 2024.

Outlook and guidance

• Expect robust gas pricing to continue through 2024 and into 2025–2026, supported by forecasted supply deficits in Colombia.

• 2024 sales guidance set at 160–177 MMscfd, with Q2 realized sales at 159 MMscfd.

• Drilling results from Cardamomo-1 expected in early September 2024; Natia/Natilla prospect to be drilled in Q4 2024.

• Targeting new E&P contract approval in Bolivia by end of August or early September, with gas sales to begin in 2025.

• Plans to drill up to five development wells and install new compression and processing facilities in 2024.