Stable and strong free cash Flow generación

Natural gas pure-play stock: Conventional natural gas producer (Upstream) concentrated in Colombia. The company’s main gas fields in operation are in the lower and middle Magdalena basin which represents the chief gas supply potencial source for the next ten years in Colombia. Despite of operating on the E&P Oil Y Gas segment Canacol’s performance relates more to a utility non-cyclical Enterprise, since four fifths of its revenues come from dollarized longterm contracts. Emphasis on long term gas supply contracts, in conjunction with relatively low D&C (drilling and completion) costs, result in a strong and, predictable free cash Flow. The company’s exploratory succes track record is impressive, achieved at a relatively low cost when compared to the industry. We update our intialization Price at COP 15.219, which represents a 42.6% return potencial with respect to current market prices.