News

Announces Increase To Its Previously Announced Underwritten Private Placement Equity Financing
September 23, 2009

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX VENTURE: CNE) is pleased to announce that it has increased its previously announced underwritten private placement offering. The offering is being completed by a syndicate of underwriters, led by Canaccord Capital Corporation ("Canaccord") and including FirstEnergy Capital Corp. (collectively the "Underwriters"), and the Underwriters have agreed to purchase, on an underwritten private placement basis, 107,143,000 common shares ("Common Shares") at a price of $0.28 per Common Share to raise gross proceeds of $30,000,040.

In addition, the Underwriters' over-allotment option (the "Over-Allotment Option") has been increased to allow the Underwriters to purchase up to an additional 35,715,000 Common Shares for additional gross proceeds of up to $10,000,200 at a price of $0.28 per Common Share prior to closing date of the offering, and the Over-Allotment Option is exercisable in whole or in part at the sole discretion of the Underwriters.

If the Over-Allotment Option is exercised in full, the total gross proceeds raised from the offering will be $40,000,240. The offering is expected to close on or about October 15, 2009.

The net proceeds from the Offering will be used to fund the Corporation's exploration and development program in Colombia, Guyana and Brazil, reduce indebtedness and for general corporate purposes

Completion of the private placement is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the TSX Venture Exchange.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.