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Highlights

  • Net income rose to $31.8 million, aided by $19.5 million tax recovery
  • Natural gas sales volumes dropped 14% to 128.7 MMcfpd in Q1 2025
  • Adjusted EBITDAX declined 8% to $56.3 million compared to Q1 2024

Canacol Energy Ltd. (TSX: CNE; OTCQX: CNNEF; BVC: CNEC) reported net income of $31.8 million for the first quarter ended March 31, 2025, a significant increase from $3.7 million in the same period last year. This jump was primarily attributed to a non-cash deferred income tax recovery of $19.5 million, compared to a $0.5 million expense in Q1 2024.

Despite higher net income, the company saw declines across several operational metrics. Realized contractual natural gas and LNG sales volumes fell 14% to 128.7 million cubic feet per day (MMcfpd), down from 150.4 MMcfpd in the previous year. As a result, total revenues net of royalties and transportation dropped 6% to $72.7 million.

Adjusted EBITDAX for the quarter declined 8% year-over-year to $56.3 million, mainly due to lower sales volumes. Similarly, adjusted funds from operations dropped 7% to $39.3 million. However, Canacol’s average natural gas and LNG operating netback improved to $5.48 per Mcf, up 12% from $4.90 per Mcf in Q1 2024, reflecting higher average sales prices net of transport costs.

Capital expenditures increased substantially, with $50.5 million spent during the quarter—up from $35.9 million a year earlier—focused on drilling, completions, and testing. As of March 31, 2025, Canacol reported $79.1 million in cash and cash equivalents and a working capital balance of $14.2 million.

Looking forward, the company plans to continue investing in its Lower Magdalena Valley gas assets, manage debt, and lay operational groundwork for a potential expansion into Bolivia by 2026. Cost control and exploration efforts remain key components of Canacol’s near-term strategy in response to volume fluctuations and price shifts in the regional energy market.