CNNEF - Canacol Energy Ltd. Announces Cancelation of EPM Gas Sales Contract and Strategic Entrance into Bolivia | Benzinga
CALGARY, Alberta, Oct. 19, 2023 (GLOBE NEWSWIRE) -- Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX:CNE, OTCQX:CNNEF, BVC:CNEC)) announces that the long term take or pay gas sales contract with Empresas Publicas de Medellin E.S.P. ("EPM"), previously scheduled to commence deliveries on December 1, 2024 (the "Project") has been terminated by the Corporation. As of the time of termination the Project was still in the process of obtaining the environmental license required for the building of the pipeline to deliver contracted gas from the Corporation's Jobo gas processing plant to the city of Medellin. This process was initially expected to have been completed by July of 2023. Although this delay was not by itself sufficient to jeopardize the timely execution of the Project or the gas sales contract, it has been part of a pattern of ever increasing legal, social, and security obstacles that have arisen in the past months that have led the Corporation to reevaluate the likely future and priority placed on this Project. Senior Management will hold a Conference Call to discuss the cancellation of the EPM contract and strategic entrance into Bolivia on Friday, October 20, 2023, at 6:30 a.m. MST / 8:30 a.m. EST.
As a result of careful review of 1) the legal, social and security circumstances, 2) dynamics within the Colombian gas market, and 3) the Corporation´s decision to invest in its natural gas exploration programs in the Middle Magdalena Basin and in Bolivia, the Corporation considers it prudent to cancel the Jobo to Medellin pipeline Project. As such the Corporation has advised EPM of its intention to terminate the contract with immediate effect. During 2023 the Corporation spent approximately $ 6 million on the Jobo to Medellin project. Cancellation of the BOOM contract with SETCO will not incur any penalty to Canacol.
As a result of the termination of the Project, the ...