Yahoo Finance

• EBITDA: Reached a record high of $86 million.

• Realized Natural Gas Prices: $6.69 per Mcf, a 24% increase compared to Q3 2023.

• Netbacks: $5.25 per Mcf, a 27% increase compared to Q3 2023.

• Operational Margin: Maintained at 78%.

• Total Revenues: $87.9 million, 15% higher than Q3 2023.

• Adjusted EBITDAX: $85.8 million, a 38% increase from Q3 2023.

• Net Income: $10.3 million, compared to a net loss of $0.5 million in Q3 2023.

• Capital Expenditures: $23.9 million, down from $43.8 million in Q3 2023.

• Cash and Cash Equivalents: $67.1 million as of September 30, 2024.

• Working Capital Surplus: $62.1 million, the highest since Q3 2022.

• Return on Capital Employed: 21% for Q3 2024, up from 3% in Q3 2023.

• Senior Secured Term Loan Facility: $75 million with Macquarie Group, $50 million drawn.

• Warning! GuruFocus has detected 3 Warning Signs with CNNEF.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Canacol Energy Ltd (CNNEF) reported a record EBITDA of $86 million for Q3 2024, driven by efficient operations and favorable arbitration outcomes.

• The company achieved a 27% increase in netbacks to $5.25 per Mcf, maintaining strong operational margins of 78%.

• Canacol's strategic focus on the interruptible gas market has been effective, with realized natural gas prices increasing by 24% compared to the same period in 2023.

• The company successfully drilled several wells, including Chontadura-3 and Nispero-2, contributing to production capacity recovery.

• Canacol secured a $75 million senior secured term loan facility, enhancing financial flexibility for future growth and operational investments.

Negative Points

• Despite drilling the Cardamomo-1 exploration well, it did not result in a commercial discovery, highlighting exploration risks.

• Realized natural gas sales volumes were 10% lower in Q3 2024 compared to the same period in 2023.

• The company faced a non-cash deferred income tax expense of $5.3 million in Q3 2024 due to foreign exchange changes.

• Capital expenditures decreased to $23.9 million in Q3 2024 from $43.8 million in Q3 2023, reflecting reduced operational spending.

• The company is exposed to potential risks from peso devaluation, which could impact deferred tax expenses.

Q & A Highlights

Q: Can you provide details on the firm gas contract terms for 2025 and the expected contracted volume? A: Approximately 20 million cubic feet per day of existing firm contracts will expire at the end of November. Gas demand remains strong, and while new firm contracts are being negotiated, the decision to execute them has not been made. The strategy is to keep volumes available for the interruptible market, where pricing is expected to be robust next year. - Charle Gamba, President & CEO