NG ENERGY ANNOUNCES INCREASED YEAR-END RESERVES AND RESOURCES
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Canada NewsWire
57% increase to 1P reserves to Company gross 81.0 Bcf for before tax NPV 10 of US$123.5 million 21% increase to 2P reserves to Company gross 196.0 Bcf for before tax NPV 10 of US$328.4 million 20% increase to 3P reserves to Company gross 364.7 Bcf for before tax NPV 10 of US$555.4 million Company gross unrisked best estimate contingent resources of 173.6 Bcf for before-tax NPV 10 of US$231.4 million Company gross unrisked best estimate prospective resources of 332.5 Bcf for before-tax NPV 10 of US$562.0 million
CALGARY, AB , April 24, 2025 /CNW/ - NG Energy International Corp. (" NGE " or the " Company ") (TSXV: GASX) (OTCQX: GASXF) is pleased to announce the Company's 2024 year-end reserves and resources for both Maria Conchita and Sinu-9 as evaluated by the Company's independent qualified reserves evaluator Sproule International Limited (" Sproule ERCE ").
Highlights
Sinu-9 Block (72% WI):
Company gross Proved (1P) reserves of 32.0 Bcf (44.5 Bcf project gross) of natural gas for before-tax NPV 10 of US$22.3 million ; Company gross Proved + Probable (2P) reserves of 130.1 Bcf (180.7 Bcf project gross) of natural gas for before-tax NPV 10 of US$178.8 million ; Company gross Proved + Probable + Possible (3P) reserves of 286.8 Bcf (398.3 Bcf project gross) of natural gas for before-tax NPV 10 of US$377.1 million ; Company gross unrisked best estimate contingent resources (development pending) of 125.1 Bcf for before-tax NPV 10 of US$136.6 million ; and Company gross unrisked best estimate prospective resources of 137.1 Bcf for before-tax NPV 10 of US$297.5 million .
Sinu-9 Block (32% WI):
The below outlined reserves and resources assume completion of the Company's sale of a 40% working interest in Sinu-9 to Etablissements Maurel & Prom S.A. (" M&P ") as announced in the Company's news release dated February 10, 2025 .
Company gross Proved (1P) reserves of 14.2 Bcf of natural gas for before-tax NPV 10 of US$9.9 million ; Company gross Proved + Probable (2P) reserves of 57.8 Bcf of natural gas for before-tax NPV 10 of US$79.5 million ; Company gross Proved + Probable + Possible (3P) reserves of 127.5 Bcf of natural gas for before-tax NPV 10 of US$167.6 million ; Company gross unrisked best estimate contingent resources (development pending) of 55.6 Bcf for before-tax NPV 10 of US$60.7 million ; and Company gross unrisked best estimate prospective resources of 60.9 Bcf for before-tax NPV 10 of US$132.2 million .
Maria Conchita Block (80% WI):
Company gross Proved (1P) reserves of 49.0 Bcf (61.2 Bcf project gross) of natural gas and 76 Mbbl (95 Mbbl project gross) of condensate for before-tax NPV 10 of US$101.2 million ; Company gross Proved + Probable (2P) reserves of 65.9 Bcf (82.4 Bcf project gross) of natural gas and 98 Mbbl (123 Mbbl project gross) of condensate for before-tax NPV 10 of US$149.6 million ; Company gross Proved + Probable + Possible (3P) reserves of 78.0 Bcf (97.5 Bcf project gross) of natural gas and 115 Mbbl (143 Mbbl project gross) of condensate for before-tax NPV 10 of US$178.3 million ; Company gross unrisked best estimate contingent resources (development pending) of 48.5 Bcf for before-tax NPV 10 of US$94.8 million ; and Company gross unrisked best estimate prospective resources of 195.4 Bcf for before-tax NPV 10 of US$264.4 million .
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Brian Paes-Braga, CEO and Chairman of NGE, commented: "We are delighted to report significant reserve volumes growth at year-end 2024, highlighted by a 98% increase in 1P reserves at Maria Conchita, as the Company transitions into the production growth phase. While 2024 was a year focused on infrastructure, including the construction and commissioning at Sinu-9 of the 28 km pipeline connecting to the Promigas pipeline network, the Central Processing Facility, and the INFRAES plant, there was still a meaningful increase in reserve volumes from production data from the Brujo-1X and Magico-1X wells in addition to increased reserve volumes due to changes in Sproule ERCE's views of the long-term high natural gas price environment in Colombia . Sproule ERCE estimates that ~US$8 /MMBtu natural gas prices will persist at least through the end of the decade due to the structural supply shortage that exists within Colombia . There will be increased drilling activity at both Sinu-9 and Maria Conchita in 2025 as the Company looks forward to releasing its updated capital budget alongside the closing of the M&P transaction."
Additional Disclosure Regarding Sinu-9 and Maria Conchita
Sinu-9
The report entitled "Evaluation of the P&NG Reserves and Resources of NG Energy International in the Sinu-9 Block, Colombia " (the " Sinu-9 Report ") was prepared by Sproule ERCE with an effective date of December 31, 2024 and a preparation date of February 28, 2025 . The Company's working interest in Sinu-9, located in the Lower Magdalena Valley basin in the Cordoba department, Colombia , is 72%, subject to payment of ANH sliding scale royalties and a reduction to 32% upon completion of the Company's sale of a 40% working interest in Sinu-9 to M&P as announced in the Company's news release dated February 10, 2025 . Reserves and resources attributed to the Hechizo, Brujo, Magico, Mago, Hechicero, Encanto, Milagroso, Porquero, Embrujo, Ensalmo and Sortilegio zones have been included in the Sinu-9 Report. Contingent resources for Sinu-9 are petroleum and natural gas classified as "development pending" and are attributed a chance of development of 80%. The prospective resources assigned to the Brujo-Porquero, Hechicero-Porquero and Milagroso fields are subclassified as "prospects" and are attributed a chance of discovery of 58-60% and a chance of development of 66%. The prospective resources assigned to the Embrujo, Ensalmo and Sortilegio fields are subclassified as "lead" and are attributed a chance of discovery of 25-30% and a chance of development of 41%.
Total natural gas is planned to be produced through new and existing wellbores and a pipeline to a processing facility using established recovery technology.
The development plan for the reserves area located within Sinu-9 includes the completion of the Brujo-1X well, as well as drilling a total of 14 wells; 5 in the Hechicero field, 4 in the Magico field, 3 in the Brujo field, 1 in the Encanto field and 1 in the Mago field. Production will be processed through a dehydration and compression facility as well as a gas pipeline from Sinu-9 to Jobo station.
The development plan for the contingent resources area located within Sinu-9 includes the drilling of 5 locations for the low estimate scenario, 11 locations for the best estimate scenario and 16 locations for the high estimate scenario. Production will be processed through new facilities to be built by the Company. Due to the number of reservoirs identified in the area, the number of wells may change by category according to the uncertainty identified in the reservoir areas.
The development plan for the prospective resources area located within Sinu-9 includes the drilling of 13 locations: 4 in the Milagroso field, 2 in the Embrujo field, 3 in the Ensalmo field, 2 in the Sortielgio field and 2 in the Porquero formation. Production will be processed through new facilities to be built by the Company. Due to the number of reservoirs identified in the area, the number of wells may change by category according to the uncertainty identified in the reservoir areas.
The natural gas reserves and resources were estimated based on the technically recoverable volume, budgeted operating and capital costs and the terms of the fiscal regime. Forecasts of net revenue were prepared by predicting the annual production from the reserves, resources and product prices. Gas reserves and resources have only been assigned based on the gas contracts and the gas contract precedents provided by the Company and expected to be in place at production start-up. There is no certainty it will be commercially viable to produce any portion of the contingent resources and there is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.
In sum, the development forecast presented in the Sinu-9 Report was based on a complete evaluation of the Company's lands for the zones identified by the Company to be prospective for economic development at the time of the Sinú-9 Report. The development forecast represents full development of the lands for which reserves and resources could be assigned. Additional potential could exist within zones which were not identified by the Company, within the scope of the Sinú-9 Report.
Maria Conchita
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 ERCE with an effective date of December 31, 2024 and a preparation date of February 28, 2025 . The Company holds an 80% working interest in Maria Conchita, located in the Guajira Basin, Colombia . Reserves and resources attributed to the H1, H1A, H1A1, H1B, H2, H2B, H3, H4, LM2 and limestone zones have been included in the Maria Conchita Report. Contingent resources for Maria Conchita are petroleum and natural gas classified as "development pending" and are attributed a chance of development of 0.73. The prospective resources for Maria Conchita are subclassified as "prospect" and are attributed a chance of discovery of 27-41% and a chance of development of 0.73.
Total gas is planned to be produced through new and existing wellbores and a pipeline to a processing facility using established recovery technology.
The development plan for the reserves area located within Maria Conchita includes the production maintenance of Aruchara-1 and Aruchara-3, as well as the drilling of a total of 8 wells; 5 in the Aruchara field and 3 in the Tinka field on 425 acres spacing. Production will be processed through an existing facility.
The development plan for the contingent resources area located within Maria Conchita includes the drilling of a total of 15 wells; 13 in the Aruchara field and 2 in the Tinka field on 425 acres spacing. Additionally, expansion of the existing facility is included to a total capacity of 60 MMcf/d for the best estimate scenario. Due to the number of reservoirs identified in the area, the number of wells may change by category according to the uncertainty identified in reservoir areas, since they are not completely centric with respect to each other.
The development plan for the prospective resources area located within Maria Conchita (undeveloped area related to the Aruchara and Tinka fields) includes the drilling of 29 wells and the deepening of 1 well on 425 acres spacing across the intervals of interest H2, H2B, H3, H4 and limestone.
The natural gas and condensate reserves and resources were estimated based on the technically recoverable volume, operating and capital costs and the terms of the fiscal regime. Forecasts of net revenue were prepared by predicting the annual production from the reserves, resources and product prices. Gas reserves and resources have only been assigned based on the gas contracts and the gas contract precedents in effect as of date of the Maria Conchita Report. There is no certainty it will be commercially viable to produce any portion of the contingent resources and there is no certainty that any portion of the prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.
In sum, the development forecast presented in the Maria Conchita Report was based on a complete evaluation of the Company's lands for the zones identified by the Company to be prospective for economic development at the time of the Maria Conchita Report. The development forecast represents full development of the lands for which reserves and resources could be assigned. Additional potential could exist within zones which were not identified by the Company, within the scope of the Maria Conchita Report.
With regard to the costs associated with achieving additional commercial production at Maria Conchita and Sinú-9, and the general timeline of the projects, please see the Company's Annual Information Form dated April 26, 2024 and its most recent Management's Discussion & Analysis, both of which can be found at www.sedarplus.ca .
Sproule International Limited, 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 _(" NI 51-101 ").
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. 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, the information contained in this news release regarding any development forecast and any information concerning the intentions, plans and future actions of the Company. 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.
Additionally, with regard to the Company's working interests held in both the Maria Conchita and Sinu-9 Blocks, in both the context of this news release and our previous news releases, the term "working interest", ultimately refers to the rights and obligations agreed to, eventually, materialize a contractual interest in an exploration and production contract before the Colombian Agencia Nacional de Hidrocarburos (the "ANH"), subject to the fulfillment of certain conditions. These conditions involve the assumption of financial risks and are generally linked to exploration by virtue of joint operating agreements. Once such conditions are fulfilled, the acquisition of a registered contractual interest, as party of record, in the exploration and production contract may materialize, by way of a request for approval of assignment before the ANH. For this reason, as is common practice within the oil and natural gas industry as a whole, the disclosed "working interest" may not coincide with the Company's current contractual interest in the exploration and production contract.
The assignment and allocation of "working interests" does not affect or undermine, in any way, the rights and obligations of registered parties under the relevant exploration and production contracts. Registered parties remain wholly and totally liable before the ANH, the Colombian authorities and third parties in connection with any and all obligations, risks and liabilities derived from the execution, performance or termination of the exploration and production contracts. Conversely, the rights and obligations that comprise "working interests" are only enforceable vis a vis between the executing parties under private agreements, and have no legal effects before the ANH, the Colombian authorities or third parties.
As of the date hereof, the Company is a party of record and holds a 51% contractual interest, in the exploration and production contract for the Sinu-9 Block granted by and entered into with ANH. However, under the private agreements regarding the working interests in the Sinu-9 Block, the Company holds a 72% working interest. This means a 21% working interest is yet to be assigned and acknowledged as a contractual interest in the exploration and production contract, given the conditions to do so, including ANH approval, are yet to be fulfilled. Once these conditions are met, the Company will submit an approval request with ANH. As disclosed in the Company's news release dated February 10, 2025 , the Company has agreed to sell a 40% contractual interest in the exploration and production contract for the Sinu-9 Block to Etablissements Maurel & Prom S.A., effective as of February 1, 2025 . Additionally, Clean Energy Resources S.A.S. remains the operator of record under such exploration and production contract and before the ANH.