Canacol Energy has provided an update of its testing program at its operated Rancho Hermoso Field located in the Llanos Basin of Colombia, where the company has a 100% operated working interest.

The Rancho Hermoso 5 well (RH 5), which targeted an undrilled southern extension of the field, encountered two new oil bearing reservoirs in the Los Cuervos and Guadalupe Formations, in addition to the producing reservoir in the Mirador Formation.

The company reported that it had tested a final rate of 3,994 barrels of oil per day (bopd) of 33o API light oil from the Guadalupe reservoir, the first and lowermost zone tested in the well. It is currently flow testing the Los Cuervos reservoir, which lies approximately 30ft above that of the Guadalupe reservoir.

RH 5 is located in a southern extension of the field, which until now has remained undrilled since discovery by Ecopetrol, the state oil company of Colombia, in 1984. The well penetrated the Mirador reservoir approximately 40ft high to prognosis, and encountered interpreted oil pay in thtree separate reservoir intervals. They are Mirador from 8,939 to 8,974ft true vertical depth with 7ft of net interpreted oil pay thickness and average porosity of 26%, the Los Cuervos from 8,990 to 9,020ft with 9ft of net interpreted oil pay thickness and average porosity of 27% and the Guadalupe from 9,037 to 9,069ft with 24ft of interpreted oil pay thickness and average porosity of 28%.

The Los Cuervos reservoir was perforated from 9,010 to 9,016fet, and flowed at a rate of 4,434 barrels per day of 36o API gravity oil (1,109 net barrels of oil per day) and 685 thousand standard cubic feet of gas per day, with a water cut of 0% under naturally flowing conditions through a choke of 3/4 inches at a flowing tubing head pressure of 210 psi.

The company is currently building a permanent flow line from the well to the production facility located approximately 600 meters away. After completion of the pressure build up in the Los Cuervos reservoir, the company intends to complete the well with an electrical submersible pump and bring the well on production.

The company is planning to drill additional wells in 2010 to accelerate the development of this new pool discovery.