NG Energy (TSXV: GASX) is evidently on the cusp of production getting underway at its Maria Conchita block in Colombia. The firm this morning announced it has received an initial advanced payment for the first 15 days of production from the block.
The prepayment comes from that of Energy Transitions SAS ESP, and Plus + SAS ESP, whom will be purchasing the gas on an ongoing basis as the natural gas field gets into production. The prepayment itself amounted to US$277,368.00, based on a contracted price of US$5.08 per MMBTU.
The figure paid up front represents 80% of the gas expected to be produced during the first 15 days of production from the gas field. Production was calculated at 3.5 million standard cubic feet per day, or MMSCFD, with production thereafter to steadily increase to 16 MMSCFD. The initial flow is being reduced so as to not stress future performance of the well.
“This initial prepayment marks a major milestone for the Company as it begins to monetize its gas. We look forward to keeping our shareholders and the market informed as gas begins to flow and we increase production to the targeted 16 MMSCFD,” commented CEO Serafino Iacono.
A five year gas trading contract is expected to be entered into with Energy Transitions by year end, with gas in the interim expected to be purchased under an interruptible gas supply agreement.
Further, the company stated earlier this month that it currently anticipates production to begin by the end of the month. The firm at the same time indicated that spudding of the first well at Sinu-0 is also to occur this month.
NG Energy last traded at $0.94 on the TSX Venture.
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