• Sinu-9 production currently 8.3
MMcf/d
• Sinu-9 anticipated production November
20.0 – 25.0 MMcf/d
• Sinu-9 anticipated production
December 25.0 – 29.3 MMcf/d
• Sinu-9 anticipated
production Year-End ~29.3 MMcf/d
• Macquarie Group
to Increase Line of Credit to an aggregate US$25.6 million
CALGARY,
AB, Nov. 4, 2024 /CNW/ - NG Energy
International Corp. ("NGE" or the "Company")
(TSXV: GASX) (OTCQX: GASXF) is pleased to announce that, further to
the Company's news release dated October 11,
2024, the resolution granted by the Colombian Ministry of
Mines and Energy has successfully been registered in the Market
System for Total Production Available for Sale of 29.3 MMcf/d at
Sinu-9 (19.5 MMcf/d from the Brujo-1X well and 9.8 MMcf/d from the
Magico-1X well) and Promigas S.A. E.S.P. has successfully
calibrated the Jobo connection point. After completing the Brujo-1X
well with three different zones based on the three drill stem tests
("DSTs") performed in November
2022, the Company has begun producing and selling gas from
the lowest zone, and is currently producing 8.3 MMcf/d with tubing
head pressure ("THP") of 1,750 PSI, a choke of 24/64" and a
drawdown of just 50 PSI. Initial production is performing with
better results than the DST-2 in November
2022, with an objective of producing more than 10 MMcf/d
from this zone as the choke is widened. The Company will also begin
to open the additional zones and ramp up production, as well as the
tie-in of the Magico-1X well, all of which is expected to be
completed in the first half of November. The Company anticipates
producing from Sinu-9 20 – 25 MMcf/d in November, 25 – 29.3 MMcf/d
in December and ~29.3 MMcf/d by the end of the year.
Brian Paes-Braga, Chief Executive
Officer and Chairman commented "Today marks a significant milestone
in the journey of NG Energy International, where Sinu-9 becomes a
producing natural gas field. I want to thank all our shareholders,
partners, employees and the communities in which we operate for the
support, resilience, ambition and patience through Phase I
development. Today symbolizes the incredible commitment from all of
our stakeholders to build Sinu-9 into a long-life, reliable
domestic transition energy asset for decades to come. We look
forward to quickly turning our attention to Phase II as we aim to
ramp up production quickly and safely."
Don Sewell, President and a
Director of NGE commented, "Recent discussion around potential
natural gas rationing reveals vulnerabilities present within
Colombia's gas supply
infrastructure and highlights that the gas deficit is not a distant
concern for 2025, but rather a current challenge that the country
is actively facing. This initial production from Sinu-9 is coming
online at a pivotal time, and NGE and its partners are fully
committed to continuing to add incremental supply of natural gas to
the Colombian marketplace."
Corporate Update - Increase to Line of Credit
Facility
In addition, the Company is pleased to announce that it has
increased its Line of Credit Facility (the "LC Facility")
with Macquarie Group ("Macquarie") by an incremental
US$12 million from US$13.6 million to US$25.6
million. The Company intends to use the net proceeds of the
LC Facility to advance Sinu-9 expansion infrastructure and provide
guarantees to the Agencia Nacional de Hidrocarburos around Sinu-9
Phase 2 development plans. Previously, on March 22, 2024, Macquarie Group provided the
Company with financing of up to US$100
million, including initial committed funding of US$50 million, resulting in a fully-funded
2024/2025 Phase 1 development plan.
Jorge Fonseca, CFO of NGE
commented, "We are very grateful for Macquarie's continued support
as a key financial partner as we continue to drive forward with
pace in our commitment to add an incremental supply of natural gas
to the Colombian market during this time of need. As outlined in
the Memorandum of Understanding with INFRAES, acceleration of the
Sinu-9 development plan will add up to an additional 76 MMcf/d of
pipeline capacity, which will be constructed in two stages over the
course of 15 months."
In connection with the increase to the LC Facility, the
Corporation will issue to Macquarie 5,714,286 common share purchase
warrants (the "Bonus Warrants"). Each Bonus Warrant will
entitle Macquarie to purchase one (1) common
share of the Company at an exercise price equal to C$0.98 until December 29,
2028. Completion of the issuance of the Bonus Warrants to
Macquarie remains subject to approval of the TSX Venture Exchange.
The Bonus Warrants and the common shares underlying the Bonus
Warrants will be subject to a statutory four (4)
month plus one day hold period from the date of issuance in
accordance with applicable securities laws.
About NG Energy International Corp.
NG Energy International Corp. is a growth-orientated natural gas
exploration and production company focused on delivering long-term
shareholder and stakeholder value through the discovery,
delineation and development of large-scale natural gas fields in
developing countries, supporting energy transition and economic
growth. NGE's team has extensive technical and capital markets
expertise with a proven track record of building companies and
creating significant value in South
America. In Colombia, the
Company is executing on this mission with a rapidly growing
production base and an industry-leading growth trajectory,
delivering natural gas into the premium-priced Colombian
marketplace (~US$8/MMBtu) with
projected triple digit production growth over the next 2-3 years
towards a production goal of 200 MMcf/d. The Company expects to
achieve >150% increase in 2024 and has seen a 551%
year-over-year increase in 3P reserves, 314% year-over-year
increase in 2P reserves and 241% increase in 1P reserves. To date,
over US$100 million has been invested
in the exploration and development of Sinu-9 and Maria Conchita with significant contributions
from insiders who currently own approximately 32% of the Company.
For more information, please visit SEDAR+ (www.sedarplus.ca) and
the Company's website (www.ngenergyintl.com).
Cautionary Statement Regarding Forward-Looking
Information
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news
release, including, without limitation, statements related to
production volumes from Sinu-9, the ramp up of production at the
Brujo-1X and Magico-1X wells, Colombia's natural gas needs and the issuance
of the Bonus Warrants. Any statement that involves discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as "expects", or "does not expect",
"is expected", "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts", "estimates", "believes" or
"intends" or variations of such words and phrases or stating that
certain actions, events or results "may" or "could", "would",
"might" or "will" be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Factors
that could cause actual results to differ materially from those
anticipated in these forward-looking statements are described under
the caption "Risk Factors" in the Company's most recent Management
Discussion and Analysis and its Annual Information Form dated
April 26, 2024, which are available
for view on SEDAR+ at www.sedarplus.ca. These risks include but are
not limited to, the risks associated with the oil and natural gas
industry, such as exploration, production and general operational
risks, the volatility of pricing for oil and natural gas, the
inability to market natural gas production and changes in natural
gas sale prices, changing investor sentiment about the oil and
natural gas industry, any delays in production, marketing and
transportation of natural gas, drilling costs and availability of
equipment, regulatory approval risks and environmental, health and
safety risks. Forward-looking statements contained herein are made
as of the date of this news release, and the Company disclaims,
other than as required by law, any obligation to update any
forward-looking statements whether as a result of new information,
results, future events, circumstances, or if management's estimates
or opinions should change, or otherwise. There can be no assurance
that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Abbreviations
The abbreviations set forth below have the following
meanings:
|
Natural Gas
|
|
MMcf/d
|
million cubic feet per
day
|
|
MMBtu
|
one million British
thermal units
|
|
|
|
|
Other
|
|
3P reserves
|
Proved + Probable +
Possible reserves
|
|
2P reserves
|
Proved + Probable
reserves
|
|
1P reserves
|
Proved
reserves
|
Information Regarding the Preparation of Reserves and
Resource Information
Sproule International Limited ("Sproule"), an independent
qualified reserves and resources evaluator, has conducted the
reserves and resource evaluation for Maria
Conchita and Sinú-9 in accordance with the
Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook"). It
adheres in all material aspects to the principles and definitions
established by the Calgary Chapter of the Society of Petroleum
Evaluation Engineers regarding annual reserve and resource reports
that are being released in the public domain. The COGE Handbook is
incorporated by reference in National Instrument 51-101 - Standards
of Disclosure for Oil and Gas Activities.
The Company's Form 51-101F1 – Statement of Reserves Data and
Other Oil and Gas Information for the fiscal year ended
December 31, 2023, prepared by
Sproule in accordance with the COGE Handbook and has an effective
date of December 31, 2023 (the "2023
51-101F1") was filed on SEDAR+ on April 26,
2024. As per the requirements of Form 51-101F1, since
Maria Conchita and Sinú-9
are both located in Colombia,
the Company has disclosed its reserves in the 2023 51-101F1 on an
aggregated basis. The reserves in the 2023 51-101F1, which are
attributed to Sinú-9 are based on the Sinú-9 Report (as defined
below) and the reserves in the 2023 51-101F1, which are attributed
to Maria Conchita are based on the
Maria Conchita Report (as defined below). The Company uses natural
gas liquids and conventional natural gas as the two product types
to report the Company's reserves.
The report entitled "Evaluation of the P&NG Reserves and
Resources of NG Energy International in the
Sinú-9 Block, Colombia" (the
"Sinú-9 Report") was prepared by Sproule with an
effective date of December 31, 2023
and a preparation date of December 21,
2023. Sinú-9 is located in the
Department of Córdoba, Colombia. The Company's working
interest in Sinú-9 is 72%, subject to payment of
ANH sliding scale royalties. Reserves and resources attributed to
the Hechizo, Brujo, Magico, Mago, Hechicero, Encanto, Milagroso,
Porquero, Embrujo, Ensalmo and Sortilegio zones have been included
in the Sinú-9 Report.
The report entitled "Evaluation of the P&NG Reserves and
Resources of NG Energy International in the Maria Conchita Block,
Colombia" (the "Maria Conchita
Report") was prepared by Sproule with an effective date of
December 31, 2023 and a preparation
date of December 20, 2023. The
Company holds an 80% working interest in Maria Conchita, which is located in the
Department of La Guajira, Colombia. Reserves and resources attributed to
the H1, H1A, H1A1, H1B, H2, H2B, H3, H4 and LM2 zones have been
included in the Maria Conchita Report.
For additional information regarding the
Sinú-9 Report, the Maria Conchita Report
and the reserves information contained in this news release please
see the 2023 51-101F1 filed on SEDAR+ on April 26, 2024, and the Company's news release
dated December 27, 2023 entitled "NG
Energy Announces 551% YOY Increase to 3P Reserves".
Caution Respecting Reserves Information
The determination of oil and natural gas reserves involves
the preparation of estimates that have an inherent degree of
associated uncertainty. Categories of Proved, Probable and Possible
reserves have been established to reflect the level of these
uncertainties and to provide an indication of the probability of
recovery. The estimation and classification of reserves requires
the application of professional judgement combined with geological
and engineering knowledge to assess whether or not specific
reserves classification criteria have been satisfied. Knowledge of
concepts including uncertainty and risk, probability and
statistics, and deterministic and probabilistic estimation methods
is required to properly use and apply reserves definitions.
The recovery and reserve estimates of natural gas liquids
and natural gas reserves provided herein are estimates only. Actual
reserves may be greater than or less than the estimates provided
herein. The estimated future net revenue from the production of the
disclosed natural gas reserves does not represent the fair market
value of these reserves.
Information Regarding Reserves
Reserves are estimated remaining quantities of commercially
recoverable oil, natural gas and related substances anticipated to
be recoverable from known accumulations, as of a given date, based
on the analysis of drilling, geological, geophysical and
engineering data; the use of established technology; and specified
economic conditions, which are generally accepted as being
reasonable. Reserves are further classified according to the level
of certainty associated with the estimates and may be subclassified
based on development and production status.
"Proved reserves" are those reserves that can be
estimated with a high degree of certainty to be recoverable. It is
likely that the actual remaining quantities recovered will exceed
the estimated Proved reserves.
"Probable reserves" are those additional
reserves that are less certain to be recovered than Proved
reserves. It is equally likely that the actual remaining quantities
recovered will be greater or less than the sum of the estimated
Proved plus Probable reserves.
"Possible reserves" are those additional
reserves that are less certain to be recovered than Probable
reserves. It is unlikely that the actual remaining quantities
recovered will exceed the sum of the estimated Proved plus Probable
plus Possible reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of
Proved plus Probable plus Possible reserves.
The qualitative certainty levels referred to in the
definitions above are applicable to "individual reserves entities"
(which refers to the lowest level at which reserves calculations
are performed) and to "reported reserves" (which refers to the
highest-level sum of individual entity estimates for which reserves
estimates are presented). Reported reserves should target the
following levels of certainty under a specific set of economic
conditions:
- at least a 90% probability that the quantities actually
recovered will equal or exceed the estimated Proved reserves;
and
- at least a 50% probability that the quantities actually
recovered will equal or exceed the sum of estimated Proved plus
Probable reserves.
A qualitative measure of the certainty levels pertaining to
estimates prepared for the various reserves categories is desirable
to provide a clearer understanding of the associated risks and
uncertainties. However, the majority of reserves estimates will be
prepared using deterministic methods that do not provide a
mathematically derived quantitative measure of probability. In
principle, there should be no difference between estimates prepared
using probabilistic or deterministic methods.
Each of the reserve categories (Proved and Probable) may be
divided into developed and undeveloped categories as
follows:
"Developed Producing reserves" are those
reserves that are expected to be recovered from completion
intervals open at the time of the estimate. These reserves may be
currently producing or, if shut-in, they must have previously been
on production, and the date of resumption of production must be
known with reasonable certainty.
"Developed Non-Producing reserves" are those
reserves that either have not been on production, or have
previously been on production, but are shut-in, and the date of
resumption of production is unknown.
"Undeveloped reserves" are those reserves
expected to be recovered from known accumulations where a
significant expenditure (e.g., when compared to the cost of
drilling a well) is required to render them capable of production.
They must fully meet the requirements of the reserves
classification (Proved, Probable and Possible) to which they are
assigned and expected to be developed within a limited
time.
In multi-well pools it may be appropriate to allocate total
pool reserves between the developed and undeveloped subclasses or
to subdivide the developed reserves for the pool between developed
producing and developed nonproducing. This allocation should be
based on the estimator's assessment as to the reserves that will be
recovered from specific wells, facilities and completion intervals
in the pool and their respective development and production
status.
Estimates of reserves and future net revenue for
individual properties may not reflect the same confidence level as
estimates of reserves and future net revenue for all properties,
due to the effects of aggregation. Additionally, all estimates of
future net revenue, whether calculated without discount or using a
discount rate, do not represent fair market value.
SOURCE NG Energy International Corp.