Canacol Energy Ltd. (“Canacol” or the “Company”) announces that it has been notified of the decision rendered in the domestic arbitration proceedings initiated by VP Ingenergía SASESP at the Arbitration and Conciliation Center of the Chamber of Commerce of Bogotá.
The arbitration related to the termination of three natural gas supply contracts, which were terminated by Canacol due to breaches of contract by VP Ingenergía, including failure to provide contractually required guarantees and failure to pay for gas delivered. During the procedure, the relationship between these facts and the occurrence of a force majeure event that Canacol experienced in 2023 was also examined.
The arbitral tribunal decided to accept Canacol’s arguments regarding the invalidity of the guarantees provided by VP Ingenergía and the irregular way in which VP Ingenergía handled the revenues from the sale of gas, while on the other hand, it partially allowed VP Ingenergía’s claims regarding the force majeure events. The net effect of the tribunal’s ruling against each party is that Canacol must pay approximately $22 million. This decision has not yet been perfected, as it is subject to clarification and addition, and therefore the ruling will become binding on November 20, 2025.
In this regard, the company is reviewing this decision in light of the invoices still owed by VP Ingenergía, as well as the payment orders against VP Ingenergía in favor of Canacol, issued by several Colombian judges, for a total amount of approximately US$25 million.
Furthermore, Canacol is seeking an international arbitration tribunal in which VP Ingenergía is the defendant and in which amounts in excess of US$76 million are sought, without VP Ingenergía having any economic claim against Canacol. Canacol’s case at the international tribunal is strengthened by the domestic tribunal’s recognition that the contracts were terminated by Canacol for justifiable reasons, and therefore the company expects a positive outcome in such a process, which is expected to be concluded in the first half of 2026.
In the same way, Canacol will bring the domestic arbitration decision to the attention of the Office of the Attorney General of the Nation, as it has been proven that the guarantees provided by VP Ingenergía did not secure the contracts concluded with Canacol and that VP Ingenergía breached its duties of good faith by making unjustified withdrawals from the trust funds, which were intended for the payment of VP Ingenergía’s obligations in favor of Canacol. The foregoing will have a direct impact on the criminal actions being conducted against the directors and shareholders of VP Ingenergía, in particular Mr. Álvaro Augusto Vargas Bravo (owner of VP Ingenergía SASESP), Patricia Peña (his wife) and Darlyn Yesenia Neira (legal representative of the company), in connection with which charges have been filed by the Office of the Attorney General of the Nation, together with a request for preventive detention measures, for several violations, including aggravated fraud and corruption, for acts and facts directly related to the disagreements between the parties in the domestic arbitration proceedings, which were decided in favor of Canacol by the domestic arbitration tribunal, as mentioned above.
We reiterate that Canacol is currently assessing the full content of the arbitration decision and will analyze the possible filing of any appeals or legal action, if necessary.
Canacol emphasizes that it will continue to rely on the Colombian legal system.
About Canacol
Canacol is a natural gas exploration and production company with operations focused on Colombia. The company’s shares are traded on the Toronto Stock Exchange under the symbol CNE, the OTCQX in the United States of America under the symbol CNNEF, the Bolsa de Valores de Colombia under the symbol CNEC.
This press release contains certain forward-looking statements within the meaning of applicable securities laws. Forward-looking statements are often identified by words such as “plan,” “expect,” “project,” “aim,” “intend,” “believe,” “anticipate,” “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur, including but not limited to statements regarding estimated production rates of the Company’s properties and intended operating programs and associated timelines. Forward-looking statements are based on the opinions and estimates of management as of the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company cannot guarantee that actual results will be consistent with these forward-looking statements. They are created as of the date of this document and are subject to change. The Company assumes no obligation to revise or update them to reflect new circumstances, except as required by law. The information and guidance provided herein supersedes any forward-looking information provided in prior disclosures. Potential investors should not place undue reliance on forward-looking statements. Further information about the risks and uncertainties relating to Canacol and its securities can be found in the disclosure documents filed by Canacol with the securities regulatory authorities, available at www.sedar.com j www.superfinanciera.gov.co
For more information please contact Investor Relations: South America: +571.621.1747 IR-SA@canacolenergy.com Global: +1.403.561.1648 IR-GLOBAL@canacolenergy.com http://www.canacolenergy.com
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