NG Energy Sells 40% Interest In Sinu-9 For US$150 Million, Reducing Ownership To Minority Interest

NG Energy (TSXV: GASX) is set to become a minority stakeholder in the Sinu-9 Block in Colombia, following a letter of intent the company has signed as a means of securing funding. The LOI will see the company sell a 40% operating working interest in the block to Etablissements Maurel & Prom S.A.

The sale of the 40% interest is said to be for a cash figure of US$150 million, with Maurel & Prom also holding a 12-month option to acquire an additional 5% interest for a cash payment of US$18.75 million.

The sale, which is subject to a definitive agreement being entered, is to have an effective date of February 1, 2025.

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“Bringing on an operational partner such as Maurel & Prom at Sinu-9 is a game changer for NGE. It allows NGE to maintain a significant 32% stake in Sinu-9, while at the same time welcoming a distinguished operational partner with in-country expertise, which we expect will increase both speed and certainty in unlocking the full potential of this giant oil and gas field,” commented Brian Paes-Braga, CEO and Chairman of NG Energy.

Maurel & Prom is a publicly listed oil and gas exploration and production company that is based in Paris. The company currently holds both exploration and production interests in Latin America and Africa. The firms controlling shareholder is Pertamina, which is an Indonesian state-owned oil and gas corporation.

“The Transaction puts NGE in an excellent position to advance the development of Maria Conchita, while expediting the advancement of Sinu-9 into one of Colombia’s largest natural gas fields. The Transaction allows us to maintain exposure and unlock value from what we view as world class assets in Colombia, while providing cash proceeds to support our continued evaluation of opportunities, both domestically and internationally, in addition to providing a meaningful return to our shareholders in the near term,” continued Paes-Braga.

The Sinu-9 Block covers 311,353 acres of land in the Department of Cordoba, Colombia. The block is fully permitted, and contains government approval to drill 22 wells from 11 different locations. As of December 31, 2023, the block is said to have gross 3P reserves of 245.3 Bcf of natural gas.

Production from the block as of November 4 sat at 8.3 MMcf/d, with the company projecting year end production of 29.3 MMcf/d, with that production coming from two wells.

Prior to the this latest transaction, NG Energy had a 72% working interest in the Sinu-9 Block.

NG Energy last traded at $1.70 on the TSX Venture.


Information for this story was found via the sources mentioned within the article. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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