Assets

Overview of
Target Opportunities

MARIA CONCHITA (80% WI)

  • 2P Net Reserves: 25.9 Bcf
  • Management Best Case Estimate: 200 Bcf
  • Management Estimated Future Production: 20 – 30 MMscfd
  • NPV(10): US$130 MM
  • After-Tax IRR: >100%
  • Development block with 3D seismic close to Colombia’s largest gas field
  • NG re-entered Aruchara-1 successfully yielding 14 – 20 MMscf/d

SINU-9 (72% WI)

  • Management Best Case Estimate: 1 Tcf
  • Management Estimated Future Production: 180 MMscfd
  • NPV(10): >US$600 MM
  • After-Tax IRR: >100%
  • Exploratory asset with gas accumulations and oil upside adjacent to Canacol’s Esperanza block
  • Hechizo-1 previously drilled by Ecopetrol in 1992 and tested 10 MMscf/d

TIBURÓN (10-40% WI)

  • Management Best Case Estimate: 2 Tcf
  • Management Estimated Future Production: 400 MMscfd
  • NPV(10): >US$4,000 MM
  • After-Tax IRR: 50%
  • Blue sky exploratory asset with great gas potential
  • NG intends to shoot a seismic survey and likely look for a farm-in partner

Maria Conchita

The Maria Conchita field is located in the Guajira Basin on Colombia’s Caribbean coast. The property neighbors one of the largest natural gas deposits in Colombia, the Chuchupa field, with more than 900 MMboe in reserves and accounting for 40% of Colombia’s daily natural gas output . The Ballena–Barrancabermeja pipeline is located just 14km from the Marica Conchita property and is one of several TGI networks servicing the country with Natural Gas.  NG Energy has secured financing and necessary permitting to build a connection from the Maria Conchita field to the TGI pipeline and commence production in 2021.

Drilling & Re-Entry Plan

1. Aruchara-1

• Successful re-entry in July 2020
• 19 MMcf/d absolute open flow
‒15 MMcf/d average
‒20 MMcf/d peak
• Field estimated future production rates of 14 to 20 MMcf/d (2,500-3,500 boe/d)

2. Istanbul-1

• Well re-entry
• Scheduled for Q1-21 (February)
• Originally drilled by PentaNova in 2018
• The production potential for Istanbul-1 is estimated to be between 3 and 5MMcf/d

3. Tinka-1

• Well re-entry
• Timing TBD
• Originally drilled by Ecopetrol in 1988
– Tested at 3 MMcf/d offering great potential for re-entry

4. Aruchara-3

• New drill
• Timing TBD

5. Aruchara-4

• New drill
• Timing TBD

6. Tinka-2

• New drill
• Timing TBD

A recent study has helped identify new zones of possible accumulations in the limestone of the Tinka area and the sandstones of the Istanbul-1, Aruchara-1 and Tinka 1 area. This study has identified five new possible locations to be drilled for the field development and the benefits to re-enter Istanbul-1 and Tinka 1 and has led to the determination, according to the management estimates, that new prospective resources might exist based on a P50 level could reach a global total of 200 BCF, including the current certified reserves value (34.6 BCF).

Connecting to National Infrastructure

  • Environmental permitting has been granted by the Colombian government for a 14km pipeline connection to national infrastructure with capacity of 20mmcf/d
  • Entered into Memorandum of Understanding (the “MOU“) with GTX International Corp. (“GTX“) pursuant to which GTX has agreed to build and operate the compression facilities and pipeline (the “Pipeline Facilities“) that will extend from the Company’s Maria Conchita field in Colombia to existing national infrastructure.
  • GTX has completed a brokered offering of US$10 million of senior secured convertible debentures, the gross proceeds from the offering of the Debentures will be used to construct the Pipeline Facilities.
  • Transportadora de Gas Internacional (TGI) is ready to build approved connection point
  • MOU provides that the NGE and GTX will enter into a take-or-pay agreement pursuant to which NGE will agree to transport, or pay for, 16 mmcf/d through the Pipeline Facilities for a period of six years at a tariff of US$0.90 per thousand cubic feet (kcf) of gas.
  • NG has letters of intent for take-or-pay contracts with two of the largest utilities in Colombia, EPM and Vanti Gas, for up to 20 mmcf/d at a price of US$5.08/mcf.
  •  NG Energy expect to complete facilities and connections by Spring 2021 and start selling gas into the Colombian Market

Project Layout

Sinu-9

The Sinu-9 Block covers an area of 311,353 acres and is located in the north part of Colombia sharing area in Lower Magdalena and San Jacinto basins, two of the basins with the largest gas and light oil potential in the country. The region has excellent infrastructure with open access to national oil and gas pipelines, 50km port access, and coverage of a reliable electricity grid. The Property boasts a best case management estimate for 1TCF of natural gas which would share the same trend of production from Canacol’s blocks located to the East. NG Energy has secured financing and identified four high probability drilling locations for a 2021 Spring/Summer exploration program.

Flagship Upside Property

  • Canacol’s block to the East has booked natural gas reserves of 559 Bcf and production of 200 MMcf/d
  • Hocol drilled the Arrecife well on its property to the south-west of NG Energy. Test results showed gas production of 3-10 MMcf/d with no production of water
  • The Area has excellent infrastructure with open access to national oil and gas pipelines, and coverage of a reliable electricity grid

1 TCF Exploration Potential

  • The Oligocene-Miocene sequences which are a producer of dry gas in the Magdalena Basin are considered as strong reservoirs in the block.
  • Seismic attributes are a key tool to identify gas zones, very strong 3D seismic imaging based on the early interpretations and has assisted in identification of four near-term drilling locations: Magico, Mago, Hechicero, Hechizo
  • NGE is in the first phase of the exploration program on SN-9. The first stage of that phase includes acquiring 125 km2 of 3D seismic, and drilling two exploration wells (Magico and Mago)
  • The second stage of the first phase of the exploration program is to include drilling two additional wells (Hechicero and Hechizo) and acquiring additional 3D seismic

Phase 1 Exploration

NG Energy has secured a binding commercial offer from CPVEN for drilling and gas well services related to four gas wells for an aggregate cost of US$27.2 million (US$6.8 million per well). Wells are drilled to 4,500 to 6,000 feet over 25 to 30 days.

Development Area

Tiburón

The Tiburón block is in the Upper Guajira on Colombia’s Caribbean coast and belongs to the same basin as the Chuchupa block to its south, one of the most prolific gas blocks in Colombia. Tiburón holds various similarities to the massive offshore Perla and Orca discoveries in Venezuela and Colombia, which hold multi-TCF potential. The team intends to shoot a seismic survey and then evaluate next steps. Due to the high scale nature of the territory, management will most likely consider a farm-in partner to help develop the block

Blue Sky Exploratory Asset

  • The Tiburón block shares the same territory as Chuchupa (6 Tcf), Perla (16 Tcf) and Orca (6 Tcf) fields which are located offshore
  • The Tiburón field is located onshore and is considered a low risk area for operations
  • The field contains highly prospective structures similar to that of the Perla and Orca-1 discovery
  • Management best case estimate is 2Tcf
  • Management estimated future gas production is 400MMscfd
  • NG intends to shoot a seismic survey and look for a farm-in partner

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Latest News

NG ENERGY RECOGNIZED IN THE 2021 TSX VENTURE 50®
February 26, 2021
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NG ENERGY TO RE-ENTER ISTANBUL-1 WELL IN THE MARIA CONCHITA BLOCK IN FEBRUARY 2021
February 11, 2021
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