Canacol Energy Ltd Provides Information on Arbitration Process

Executive Summary

• Canacol Energy was notified that a domestic arbitration tribunal has ruled it must pay approximately USD 22 million to VP Ingenergía S.A.S. E.S.P., with the award becoming binding on November 20, 2025.
• The company is reviewing the decision alongside outstanding invoices from VP Ingenergía (≈ USD 25 million) and will consider appeals or other legal actions.
• Canacol continues its international arbitration claim against VP Ingenergía for > USD 76 million and expects a favorable outcome by the first half of 2026, while also pursuing criminal proceedings against VP Ingnergía’s directors and shareholders.

Key Details

• The domestic arbitration addressed termination of three natural‑gas supply contracts that Canacol ended due to VP Ingenergía’s breach (failure to provide required guarantees and non‑payment for gas delivered).
• The tribunal accepted Canacol’s arguments on the invalidity of the guarantees and irregular handling of proceeds, but partially upheld VP Ingnergía’s force‑majeure claims, resulting in a USD 22 million payment obligation for Canacol.
• The award is not yet final; it will become binding after clarification/supplementation by November 20, 2025.
• Canacol notes that VP Ingenergía still owes approximately USD 25 million in unpaid invoices and has court‑issued payment orders in its favor.
• An international arbitration proceeding is underway where Canacol seeks > USD 76 million from VP Ingenergía; the domestic decision supports Canacol’s position, and a positive resolution is anticipated in H1 2026.
• The company will submit the domestic arbitral decision to Colombia’s Attorney General’s Office, linking it to criminal charges (aggravated fraud, corruption) against VP Ingnergía’s owners/directors: Álvaro Augusto Vargas Bravo, Patricia Peña, and Darlyn Yesenia Neira, including requests for preventive detention.
• Canacol is reviewing the full arbitral decision and will analyze potential appeals or further legal actions as appropriate.

Notable Quotes

(No direct CEO/President quotes were included in the release.)