It appears that it is full steam ahead for NG Energy’s (TSXV: GASX) Sinu-9 project in Colombia. The company, whom was halted midday yesterday pending news, this morning finally released what has been much anticipated by investors – the company has received the required permits to proceed with exploration and development of its SN9 block.
The announcement is a major milestone for the company, with the property referred to as its “crown jewel block” by Executive Chairman Ronald Pantin.
“We will start our exploration program focusing on the Magico/Mago/Hechicero area, which shows strong evidence of gas bearing formations due to the presence of class 6 AVO interpretations with several flat and bright spots,” commented Pantin.
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Work on the property is to begin immediately, with construction of the road and pad for the first well on site to be the first order of business. The firm currently anticipates drilling to begin by the first week of November, with the drilling rig currently standing by waiting to roll.
A four-well drill program is currently outlined for the property, with the first well referred to as Magico-1X. The program will be then followed by drilling at the Mago, Hechicero and Hechizo zones on the concessions.
The Magico / Mago / Hechicero area currently has an unrisked best estimate prospective resource of 193 BCF, while Hechizo has a prospective resource estimate of 269 BCF. The latter also has a contingent resource estimate of 51.4 BCF.
Under the current approvals obtained by the company, NG Energy is permitted to construct civil works, production infrastructure and conduct exploratory drilling on the property. The company is also permitted to construct up to 11 locations for a total of 22 wells.
The block itself consists of 311,353 acres within the Lower Magdalena and San Jacinto basins in Colombia, the largest such basins with gas and light oil potential within the nation. The block features open access to pipelines, and reliable electricity.
It is also directly adjacent to Canacol Energy (TSX: CNE), whom is the largest independent gas producer in the country. The most recently drilling well, which is immediately east of the firms SINU-9 property, tested 35.5 MMcf/d in 402 feet of payzone.
NG Energy last traded at $1.26 on the TSX Venture.
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