In a June 3 research note, Research Capital Corp. analyst Bill Newman reported in an exploration update that Canacol Energy Ltd. (CNE:TSX; CNNEF:OTCQX) encountered its thickest gas column to date with exploration well Aguas Vivas 1 in Colombia.
"The Aguas Vivas 1 well could add substantial new reserves and production capacity," Newman wrote.
He noted that with drilling down to 7,852 feet in the Cienega de Oro sandstone, the well hit 412 vertical feet of net gas pay with an average porosity of 22%. In comparison, the previous well with the thickest net gas pay, Clarinete 5, encountered 309 feet of net gas pay.
Canacol intends to test Aguas Vivas 1, preparations for which are underway. Tie-for production is to be done soon.
"We look forward to the production test results, which are expected within the next two weeks," Newman wrote.
The Canadian energy company also plans to drill two additional appraisal wells.
Research Capital has a Buy rating and a CA$6.50 per share target price on Canacol, the current share price of which is about CA$3.33.
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