OREANDA-NEWS. Canacol Energy Ltd. is pleased to report its reserves and financial results for the year ended June 30, 2015. Dollar amounts are expressed in United States dollars, except as otherwise noted.

Charle Gamba, President and CEO of the Corporation, stated: Dz Despite fiscal 2015 having proven to be a challenging year from a world oil price perspective, the Corporation managed to increas e proved plus probable reserves and deemed volumes , grow production, refinance its debt facility to defer repayment until calendar year 20 17, and reduce operating and transportation expenses to maintain as high a netback as possible. )’m also pleased to report that after some mechanical related drilling problems, the Clarinete-2 ST appraisal well has encounter ed 127 feet of net gas pay within the main Cienaga de Oro reservoir target, confirming a significant gas discovery at Clarinete.

With respect to reserves, the Corporation increased proved plus probable reserves and deemed volumes at June 30, 2015 to 79.9 million barrels of oil equivalent with a pre-tax NPV-10 value of \\$1.23 billion, an 86 % increase in reserves and a 38% increase in value year over year. The Corporation now has the longest reserve-life index of any producer in Colombia.

The Corporation grew average production for fiscal 2015 to 11,504 boe per day, a 9% increase year over year, despite a low level of capital investment related to drilling. Production for fis cal Q4 2015 was 9,961 boepd, of which 57 % of production came from our Esperanza and Ecuador properties, with the pricing of both unaffected by world oil prices.

In April of 2015 a newly syndicated \\$200 million BNP Senior Secured Term Loan re placed the CS Senior Secured Term Loan with less restrictive covenants and the first of eight term out payments commenc ing on December 31, 2017 , effectively freeing up funds which can be used to invest in growing our gas prod uction business. At June 30, 2015, the Corporation had a working capital surplus of \\$62.9 million (with \\$45.8 million of that being in unrestricted cash), and a further \\$61.8 million in restricted cash. In addition, at June 30, 2015, the Corpo ration had available an additional \\$25 million in committed Apollo Senior Notes that it can draw down at any time up to April 2016 at the sole discretion of the Corporation, subject to certain conditions.

For fiscal year 2015, the Corporation reduced operating and transportatio n expenses by 22% to \\$13.84/boe compared to fiscal year 2014. Operating and transportation expense for fiscal Q4 2015 was \\$9.18/boe.

On the financing front, in early September 2015 Canacol announced a strategic private placement with Cavengas Holding S.R.L. for C\\$79 million (approximately US\\$60 million) which will allow for both a par tial debt repayment and the ability to maintain a flexible capital expenditure program as the Corporation continue s to focus on developing its substantial natural gas portfolio.

For the remainder of calendar 2015, the Corporation remains focused on two projects: adding an additional 65 million standard cubic feet (11,400 boepd) of gas productio n in December 2015 via new sales contracts, and appraising the Clarinete gas discovery through the drilling of two appraisal wells so that the discover y can be brought into commercial production. The first appraisal well, Clarinete-2 ST, has encounter ed 127 feet of net gas pay, an amount of pay similar to that encountered in the Clarinete-1 discovery well which tested 44 MM scf per day from two intervals, and thus confirming a substantial gas discovery on our 100% ope rated VIM-5 block. The Corporation is currently preparing to start production testing of the well.

In summary, during fiscal 2015, the Corporation managed to increase reserves, grow production, deferred debt repayments to free up funds to reinvest in gas production growth, and reduc ed operating and transportation expenses to maximize netbacks, placing the Corporation on a strong footing for fiscal 2016. With an anticipated exit rate for calendar 2015 of more than 20,000 boe pd , the majority being natural gas and Ecuador tariff oil production, and with a substantial development shaping up at our Clarinete gas discovery via the resu lts of our appraisal drilling program, calendar 2016 should prove to be an interesting year indeed for Canacol as we continue to deleverage from oil in a likely scenario of depressed long term world oil prices".