Canacol Energy Ltd. (CNE), lost six cents to $3.54 on 238,100 shares. Yesterday it added eight cents after hyping its most recent gas sales and trumpeting a "new play type" discovered on one of its blocks. Contractual gas sales in July and August averaged 162 million cubic feet a day (about 28,400 barrels of oil equivalent a day), with a further eight million cubic feet a day of nominations. (Nominations are a new program that Canacol is trying this year, to try to maintain good relationships with its off-takers amid the economic challenges of COVID-19. Off-takers can "nominate" volumes of gas, but not actually pay for or receive the gas until later in 2020. This contrasts with contractual sales, which are essentially gas that has been produced, delivered and paid for.) For context, Canacol's contractual sales were just 130 million cubic feet a day from April through mid-May. The numbers are clearly improving, though they are still short of the 211-million-cubic-foot-a-day average for January and February.

As for the new play type, this was discovered on Canacol's VIM-5 block, via the new Porro Norte-1 exploration well. This was a step-out well drilled nearly 30 kilometres from the large Pandereta gas field on the same block. The primary reservoir at Pandereta is the CDO sandstone. The Porro Norte well hit a 24-foot interval of potential gas pay in the Cicuco limestone, something new for the block. While 24 feet is disappointingly small -- wells at Pandereta typically hit pay intervals of over 100 feet -- the limestone is intriguing. Scotia Capital analyst Gavin Wylie certainly thinks so, writing this morning that Porro Norte helps "derisk" the wider petroleum system while setting up new targets for 2021. Moreover, the mere fact that Canacol remains an active explorer in spite of the downturn impresses Mr. Wylie, who sees it as a unique advantage (or, in analyst gibberish, "an important point of differentiation providing some catalyst potential that is currently lacking in the sector"). Mr. Wylie has a "sector outperform" rating on Canacol and a price target of $6. The stock closed today at $3.54.

Best Rgds;
R..............Operating any company in a declining sales environment will present
challenges. While I appreciate the Color given for the drill results
I lack the expertise to acknowledge them as being accurate.