Canacol Energy: Successful Shale Oil Test Underscores Compelling Value Proposition
- Canacol has tested up to 590 bopd from the high-impact MA-1 La Luna shale-oil well where the company is partnered with ExxonMobil.
- Importantly, the quoted flow rates are under natural flow conditions without pump assistance. The MA-1 was a vertical well and was not fracture stimulated.
- The company has 545,000 net acres of exposure to the play; Shell and Conoco are partners on two of Canacol's adjacent blocks.
- Canacol is trading at ~60% of my extrapolated NAV, adjusted for new discoveries, and provides leverage to material upside optionality even assuming zero oil-shale value. The risk-reward appears excellent.