Fitch Affirms Canacol Energy Ltd.’s IDRs at ‘BB-‘; Outlook Revised to Positive

Fitch Ratings has affirmed Canacol Energy Ltd.’s Long-Term Foreign Currency and Local Currency Issuer Default Ratings at ‘BB-‘ and the company’s senior unsecured notes at ‘BB-‘/’RR4’. The Rating Outlook has been revised to Positive from Stable. The ratings reflect Canacol’s long-term, take-or-pay contracted sales with investment-grade counterparties at fixed prices, as well as the company’s low production cost and regional importance for Colombia. The ratings also benefit from the company’s robust reserve life. Fitch expects Canacol to remain a low cost producer while increasing production levels to an average of 325,000 cubic feet per day (mmcfd) by 2024, representing an 18% CAGR compared to 2020. Canacol’s relatively small production size and low diversification of gas fields is offset by its contracted volumes, with high quality offtakers and its conservative capital structure.

Source: Fitch Ratings