Bloomberg News

Canacol Drops to One-Year Low as Market Awaits Hermoso Update

June 28, 2011

June 28 (Bloomberg) -- Canacol Energy Ltd., the Calgary- based oil company that operates fields in South America, dropped to the lowest price in almost a year in Bogota as investors waited for an update on exploration at the company’s main production field, Rancho Hermoso.

“It’s common that every month or two companies give an update on their exploration,” said Maria Adelaida Velasquez, an oil industry analyst at Interbolsa SA, Colombia’s biggest brokerage. “Canacol hasn’t given information on the Rancho Hermoso exploration in recent months, and the market wants news on it because it’s the company’s main field.”

The stock fell 3.5 percent to 1,925 pesos at 4 p.m. New York time, the lowest level since July 2010.

In Canacol’s most recent update on Hermoso, which was published Feb. 8, the company said it plans to develop as many as 8 wells in the field’s drilling program in the late second quarter of 2011. Velasquez said Canacol’s share price fell today on the lack of an update on Hermoso, combined with last week’s drop in oil prices.

Canacol spokeswoman Carolina Orozco didn’t immediately respond to a phone message seeking comment.

Crude rose 2.5 percent today amid speculation that Greek lawmakers will approve austerity measures to prevent a debt default, after prices settled yesterday at the lowest level since Feb. 18.

--Editors: Glenn Kalinoski, Brendan Walsh

To contact the reporter on this story: Blake Schmidt in Bogota at bschmidt16@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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