October 21, 2010 / 11:56 AM / 8 years ago

UPDATE 1-Canacol says Capella oil reserves doubled

* Proven, probable reserves at 4.2 mln net barrels

* Says to drill three more wells in 2010

* Says steam injection pilot could increase reserves

Oct 21 (Reuters) - Canada’s Canacol Energy CNE.V said net proven and probable oil reserves at its Capella well in Colombia doubled from last year.

The South America-focused oil and gas firm also said it plans to drill three more wells at Capella during the remainder of the year.

Net after royalty proven and probable reserves doubled to 4.2 million net barrels, the company said in a statement.

Canacol said gross production from an existing vertical well rose more than four folds, driven by its cyclic steam injection pilot.

Chief Executive Charle Gamba said there could be significant increases in reserves, helped by the cyclic steam injection pilot.

Canacol earned its 10 percent working interest in the Capella heavy oil discovery through a farm-in deal with UK’s Emerald Energy, which was later acquired by China’s Sinochem (600500.SS).

Canacol shares have doubled in value since the company set a capital budget of $46 million for exploration and development in Colombia, Guyana and Brazil in May. They closed at C$1.55 Wednesday on the Toronto Venture Exchange. (Reporting by Gowri Jayakumar in Bangalore)

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