NG Energy International (TSXV: GASX) investors received a surprise news release last night, with the company revealing that there is a prospective resource on the Sinu 9 Block – and not for natural gas. As it turns out, in addition to gas, light crude oil is present on the property.
Found within the Sinu San Jacinto Basin in Colombia, the Sinu 9 Block has long been viewed as the most significant asset held by the company. Long term shareholders had been anticipating the oncoming drilling of the property as part of a multi-well drill program in search of natural gas, beginning with the Magico-1 well. The decision to begin with Magico-1 was the result of a new seismic evaluation conducted by the company.
As it turns out, that seismic evaluation provided additional information to the company. Last night, the firm revealed prospective resources on the property, with a best estimate of 279.3 million barrels of light crude oil, which after taking into account the firms 72% working interest, translates to 201.1 million barrels of unrisked prospective resources. The low estimate currently is pegged at 54.9 million barrels of oil attributable to NG Energy, while the high estimate sits at 438.2 million barrels of oil.
The prospective resources is found within the leads subcategory. The company also indicated that limited seismic coverage within the northern portion of the block has present a complete structural and stratigraphic interpretation of the block. The property is believed to contain both the Maco and San Cayetano formations.
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NG Energy has indicated it now intends to drill a twin well that offsets the stratigraphic well found on the property, which will be done to enable the company to evaluate the light oil in these sedimentary sections. Following the success of this, the firm then intends to carry out 2D or 3D seismic surveys to better map the property for potential discoveries.
Data for the prospective resources is based on the ANH LA X-1 Stratigraphic Well, which has been drilled to a depth of 4,455 feet, and features a net pay of 68.0 feet.
The firm indicated that it remains too early to identify the potential cost of putting the property into production for light crude, or for providing a timeline of such.
NG Energy last traded at $1.61 on the TSX Venture.
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