NG Energy Enters Three Year Agreement For Sale Of 8,000 MMBTU Of Gas

NG Energy International (TSXV: GASX) continues to see demand for its natural gas produced in Colombia. The firm this morning indicated it has entered into a three year agreement for the sale of natural gas produced at the Maria Conchita gas field under a binding letter of intent.

The arrangement, entered into with Plus+ Energy ESP, will see the company sell up to 8,000 MMBTU per day under a firm volume purchase agreement, or what equivalates to the firms 80% participating interest in the gas fields production.

“We are very pleased to have received a binding letter of intent for the sale of our gas from Maria Conchita and look forward to fulfilling further demand, from the country of Colombia, as we develop more wells at both our Maria Conchita and SINU-9 blocks,” commented NG Energy CEO Serafino Iancono.

Most notably, the company has seen a price increase on the sale of its gas. Previously arrangements entered into with Plus+ Energy were pegged at US$5.08 per MMBTU. In the current contract, the sale price has climbed by 28%, with NG Energy locking in the supply agreement at US$6.50 per MMBTU.

READ: NG Energy Spuds Second Well At SINU-9 Gas Field

Production at the gas field is said to currently amount to 4,355 MMBTU per day, with production slated to increase to 20,740 MMBTU per day. Sales to date have been made to Grupo Vanti and Enel Colombia on an interruptible basis, and production in excess of the Plus+ Energy agreement will continue to be sold on an interruptible basis. The most recent pricing on these interruptible sales is said to be US$5.08.

NG Energy last traded at $0.80 on the TSX Venture.

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