Canacol Energy (CNE) Q4 2023 earnings summary

Executive summary

• FY23 revenue, net of royalties and transportation, rose 11% to $304.9 million; adjusted EBITDAX increased 11% to $236.8 million, while net income fell 41% to $86.2 million.

• Realized contractual gas sales volumes declined 2% to 178.3 MMcfpd, attributed to an unexpected decrease in production capacity.

• 2023 natural gas sales averaged 178 MMcfpd, within guidance; ROCE was 11%.

Financial highlights

• Q4 revenue, net of royalties and transportation, increased 17% YoY to $79.7 million; FY23 revenue increased 11% to $304.9 million.

• Adjusted funds from operations were $31.0 million in Q4 versus an outflow of $17.0 million in Q4 2022; FY23 rose 55% to $146.3 million.

• Net income was $29.9 million in Q4, down 78% YoY, and $86.2 million for FY23, down 41%; diluted EPS was $0.88 and $2.53, respectively.

• Cash flow from operating activities fell 55% to $22.6 million in Q4 and 49% to $95.3 million for FY23.

Outlook and guidance

• 2024 gas-sales guidance: 160–177 MMscfpd; interruptible spot sales targeted at 23%–30% of total.

• 2024 assumptions include average gas price of $6.59/Mcf, netback of $4.91/Mcf and EBITDA of $250–$290 million.

• 2024 LMV plans include up to five development wells, four exploration wells, 85 sq km of 3D seismic, and compression, processing and workover activity; capital spending planned at $138–$151 million.

• Bolivia objective: secure government approval for a fourth E&P contract to reactivate an existing gas field, with development intended to support gas sales in 2025.

• Pola-1 exploration drilling in the MMV was postponed to 2025 as investment is prioritized in the LMV and liquidity and balance-sheet flexibility are maintained.