Canacol Energy Ltd. has executed a new gas sales contract for the sale of 30 million standard cubic feet per day (mmscfpd) (5,263 barrels of oil equivalent per day "boepd") commencing for a 5 year period in December 2015 to an electrical generation company located on the Caribbean coast of Colombia. Under the terms of the sales contract Canacol will receive a sales price of US$ 8.00 / thousand standard cubic feet (mscf) (US$ 46 per barrel of oil equivalent "boe") escalated at approximately 3% per year during the 5 year term of the contract.

The undiscounted before tax value of the contract, after deducting investment capital and operating expenses, is approximately US$ 380 million. As previously announced in January 2014 Canacol executed two gas sales contracts to provide 35 mmscfpd (6,140 boepd) of gas to an electrical generation company located on the Caribbean coast of Colombia commencing in December 2015 for a sales price of US$ 5.40 / mscf (US$ 31 / boe) escalated at approximately 3% per year during the 5 year term of each contract.

Tags: Canacol Energy Inc.