NG Energy Brings Badly Needed Natural Gas Production Online In Colombia at Sinu-9 SIte

NG Energy International Corp. (TSXV: GASX; OTCQX: GASXF) announced the initiation of natural gas production at its Sinu-9 site in Colombia, following authorization by the Colombian Ministry of Mines and Energy. The current output is reported at 8.3 million cubic feet per day (MMcf/d), with production projected to reach between 20.0 and 29.3 MMcf/d by year-end.

The Canadian energy company, focused on natural gas exploration and production, noted that Promigas S.A. E.S.P. has completed calibration of the Jobo connection point, enabling the commencement of gas sales. NG Energy completed drilling operations on the Brujo-1X well, which has three production zones, and began extracting from the lowest zone with a tubing head pressure (THP) of 1,750 PSI. Initial production outperformed previous drill stem test results, leading the company to aim for over 10 MMcf/d as production scales up with a wider choke. Production at Sinu-9 is expected to ramp up as additional zones of the Brujo-1X well and the Magico-1X well are activated. The company forecasts a gradual increase to approximately 29.3 MMcf/d by December. Sinu-9 has a long-term goal to become a significant contributor to Colombia’s natural gas supply.

Corporate Update and Financial Position

NG Energy also reported an increase to its line of credit facility with Macquarie Group by an additional US$12 million, raising the total to US$25.6 million. This funding will support the expansion of infrastructure at Sinu-9 and provide assurances to Colombia’s Agencia Nacional de Hidrocarburos as Phase II of the Sinu-9 development progresses.

In March 2024, Macquarie Group had already committed US$50 million in financing, part of a larger US$100 million credit facility. This recent increase in credit is designated for advancing the Sinu-9 project, including the construction of additional pipeline capacity, expected to increase by up to 76 MMcf/d over 15 months as outlined in a Memorandum of Understanding with INFRAES.

In connection with the credit facility, NG Energy will issue Macquarie 5,714,286 common share purchase warrants, allowing the purchase of one common share at C$0.98 until December 29, 2028. This issuance awaits approval from the TSX Venture Exchange. The announcement comes amid growing concerns about Colombia’s natural gas supply, as recent discussions on potential gas rationing highlight vulnerabilities in the country’s energy infrastructure. NG Energy’s production at Sinu-9 is expected to contribute significantly to the Colombian gas market, which has seen increasing demand pressures.

NG Energy specializes in the development of large-scale natural gas fields, primarily in Colombia. The company’s production goals aim to meet the country’s premium-priced gas demand, currently estimated at approximately US$8/MMBtu. With a target of reaching 200 MMcf/d, NG Energy projects substantial growth over the next few years, following a year-over-year increase in reserves across all categories (3P, 2P, and 1P). To date, over US$100 million has been invested in its Sinu-9 and Maria Conchita projects, with a substantial portion contributed by insiders holding roughly 32% of the company’s equity.

Photo courtesy Promigas