It may have taken longer than initially forecasted, but NG Energy (TSXV: GASX) has officially transitioned from a gas explorer to a gas producer as of this morning. The firm has seen its Maria Conchita gas field connected to pipeline infrastructure and has begun flowing gas.
The company has connected to the Colombian National Gas Transportation System through Transportadora de Gas Internacional in northern Colombia. The pipeline is connected to the firms Instanbul Platform, which is presently connected to both the Aruchara-1 and Istanbul-1 wells, found within the Maria Conchita field.
The plant has reportedly begun the stabilization process as well as the injection of gas from Aruchara-1.
“”We are pleased to finally, after many delays caused by negotiations with communities and interruptions generated from the COVID 19 pandemic, to have finally hooked up. We are ready to deliver gas to our customers and generate steady cash flow for the Company for many years to come,” commented CEO Serafino Iancono.
Gas flowing from the field has largely been sold already by the company, with an agreement signed in May resulting in the company being paid upfront for the first 15 days of production. That pre-sale saw the company sell 3.5 million MMSCFD of gas at US$5.08 per MMBTU, which amounts to US$277,368 and represents 80% of expected gas production during the start up phase.
As part of that arrangement, 80% of gas produced at the field through to December 2022 has been sold at a price of US$5.08 per MMBTU, which is estimated to be 16 MMSCFD. Once the contract expires, NG Energy intends to enter into a firm uninterruptible gas contract at more favorable prices.
The development follows the company last week revealing that testing at its first well in the SINU-9 block producing 15 MMSCFD with 76 feet of net pay.
NG Energy last traded at $1.14 on the TSX Venture.
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