NG Energy International Corp. (NGE) (TSXV: GASX, OTCQX: GASXF) has announced a strategic transaction involving the sale of a 40% operating working interest in its Sinu-9 Block to Maurel & Prom for a total cash consideration of $150 million. This agreement, formalized through a letter of intent, is set to take effect on February 1, 2025.
Maurel & Prom (EURONEXT: MAU), a well-established upstream energy company based in Paris and backed by Indonesia’s state oil company Pertamina, brings nearly two centuries of operational experience across various regions, including Africa and Latin America. This partnership is expected to significantly de-risk the development of Sinu-9, one of Colombia’s largest onshore natural gas fields. By securing a financially robust and technically proficient partner, NGE aims to enhance the speed and reliability of natural gas delivery, which is crucial for Colombia’s energy transition strategy.
Sinu-9 spans approximately 311,353 acres in Colombia’s Cordoba Department and has received full environmental permits to drill 22 wells from 11 locations. As of December 31, 2023, the block holds substantial natural gas reserves:
– 1P reserves: 26.7 Bcf (Company gross)
– 2P reserves: 114.36 Bcf (Company gross)
– 3P reserves: 245.3 Bcf (Company gross)
– Unrisked contingent resources: 130.2 Bcf
– Unrisked prospective resources: 131.0 Bcf
Under the terms of the agreement, Maurel & Prom will assume its share of NGE’s carry commitments related to Sinu-9 upon closing. Additionally, M&P will have an option to increase its stake by an additional 5% within a year for a payment of $18.75 million.
Brian Paes-Braga, Chairman and CEO of NGE, expressed enthusiasm about the partnership, stating that collaborating with Maurel & Prom represents a transformative opportunity for NGE. He noted that this alliance not only allows NGE to retain a significant 32% interest in Sinu-9 but also brings in a partner with valuable local expertise that is expected to expedite the development process.
“This initiative demonstrates NGE’s commitment to long-term value creation for our shareholders through efficient acquisition and development of energy assets,” Paes-Braga remarked. He emphasized that this transaction positions NGE favorably to advance its other projects while ensuring reliable gas supply for Colombia.
Maurel & Prom’s extensive history and operational prowess are expected to enhance the development pace at Sinu-9. The company has a solid financial standing with available cash reserves and undrawn credit facilities, which provides confidence in financing the transaction.
Upon closing, NGE plans to implement an updated capital allocation strategy aimed at maximizing shareholder value through disciplined investments and potential share repurchases or dividends.
Both companies will work together to refine the development plan for Sinu-9 for the fiscal year ending December 31, 2025, with updates anticipated alongside the transaction’s closing. Recent production tests from wells Brujo-1X and Magico-1X have shown promising results, affirming strong reservoir performance and productivity.
NGE has also initiated plans to enhance processing capacity at Sinu-9 through additional equipment installations and collaborations with partners like INFRAES. This is expected to ramp up production significantly in early 2025.
NG Energy International Corp. focuses on natural gas exploration and production in developing countries, aiming to create long-term value through large-scale projects that support energy transitions and economic growth. With significant investments already made in Sinu-9 and Maria Conchita, NGE is poised for substantial production growth in the Colombian market over the coming years.
