Canacol Energy Ltd. has signed three new Exploration and Production (E&P) Contracts with the Agencia Nacional de Hidrocarburos (ANH) of Colombia. The Sangretoro E&P contract is located in the Putumayo - Caguan Basin of southern Colombia, and was previously part of the Pacarana Technical Evaluation Area ('TEA') that the Corporation was awarded in 2009. Upon completing the work program associated with the TEA the Corporation converted the most prospective part of the TEA to an E&P contract. The COR-11 and COR-39 E&P contacts are located in the Upper Magdalena Basin of central Colombia. The Corporation was the successful bidder for the COR-11 and COR-39 E&P contracts in the Ronda 2010 exploration bid round that took place in June 2010. Canacol owns a 100% operated working interest in each of the three new contracts.
Charle Gamba, President and CEO of Canacol, stated, 'Canacol's exploration plans on our 100% operated heavy oil acreage located in the Caguan Basin are progressing rapidly, and the signing of the new Sangretoro E&P contract positions us to prepare for the drilling of this block. The Corporation plans to drill a total of 5 wells on its 3 exploration contracts in the Caguan (Sangretoro, Cedrela, and Tamarin) starting in the second half of 2011. The award of the COR-11 and COR-39 blocks establishes a new core area located in the Upper Magdalena Valley in close proximity to the Guando and Abanico producing oil fields. The Corporation has mapped 7 light to medium oil prospects and leads representing a variety of different play types on the 2 blocks. Canacol plans to acquire 250 km of 2D seismic and drill 1 exploration well on the COR 39 block in 2011.'