/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
- Funding led by incoming Chair and associates to take NGE to
cash flow positive
- After 6 years and approximately US$100 million spent on the acquisition and
development of Maria Conchita, Sinu-9 and Tiburon, NGE enters "high
growth phase" of its journey to become a reliable energy transition
fuel source for Colombia.
VANCOUVER, BC, July 6, 2023
/CNW/ - NG Energy International Corp. ("NGE" or the
"Company") (TSXV: GASX) (OTCQX: GASXF) announces today that
Mr. Ronald Pantin will be
transitioning from his role as Executive Chairman to Director, as
well as the upcoming retirement of Mr. Gordon Keep and Mr. Jeffrey Harder from the Board (the "Board
Changes"). The Company is also pleased to announce that upon
the Board Changes coming into effect, Mr. Brian Paes-Braga will be appointed as Chair of
the Company's Board of Directors. Mrs. Luz Stella Murgas, Mr. Don Sewell and Mr. Brian
O'Neill will also be appointed to the Board of
Directors.
"I wish to thank Ronald Pantin
for his dedication and leadership as he and a very small,
technically driven team built NGE's assets into what they are
today, robust natural gas deposits with significant growth in
reserves and resources since inception as well as a growing
production base, providing Colombians with critical cleaner energy
for their transition away from coal. Without his perseverance,
in-country expertise and steadfast belief in NGE's assets,
especially through COVID, I struggle to see how this company would
be where it is today. I am looking forward to our continued
collaboration in his role as a Director of the Company. I also wish
to thank Gordon Keep and
Jeffrey Harder for their efforts and
service to the Board" said Mr. Serafino
Iacono, CEO and Director of NGE. "I am also looking forward
to working with Brian Paes-Braga in
his new role as Chair of the Board. Having worked with Brian for
many years now and observing his career, I know how his talents
will benefit all our stakeholders as we enter the next phase of the
company's growth. I also wish to welcome Don Sewell, Brian
O'Neill and Luz Stella
Murgas. This is an exciting time for NGE, as the new members
of the Board will bring their capital markets expertise and
business acumen to the table, as they work with me and the rest of
our management team to take NGE to new levels."
Mr. Brian Paes-Braga is a
Canadian-born entrepreneur, merchant banking executive, and author.
Currently, he serves as Managing Partner at SAF Group, a leading
structured credit and merchant banking group which builds, invests,
finances, and advises high growth companies as well as provides
flexible and long-term capital solutions to public and private
corporations while providing stable returns for investors through
its structured credit arm. As an executive, Mr. Paes-Braga was
Founder and CEO of Lithium X Energy Corp., a lithium resource
company which, within 2.5 years, raised approximately CDN$53 million and was acquired in an all-cash
deal for CDN$265 million. Mr.
Paes-Braga was formerly Chair of the board of directors of
Thunderbird Entertainment, a global multi-platform entertainment
company creating award-winning programming for the world's leading
digital platforms, and a former board member of DeepGreen Metals
(now TMC the metals company Inc.), which closed a >US$2 billion go-public transaction on the NASDAQ
in September 2021 and aims to supply
the world with ethical, clean metals harvested from the deep ocean
floor.
"I am excited for the opportunity to support the entire
executive team at NGE, its Board, very patient shareholders, and
all other stakeholders as we endeavour to build a domestic clean
energy producer. Natural gas has become globally recognized as an
important fuel in the energy transition. Colombia is in great need of these new
discoveries, as well as production, as it faces a natural gas
deficit as early as 2025. Additionally, stable premium-pricing
creates an excellent foundation to build a high growth, free cash
flowing energy company. I believe the significance of the Brujo-1
discovery has been largely overlooked and that Sinu-9 is destined
to become a critical bridge and cleaner energy source for the next
generation of Colombians, as the country transitions to renewable
energy. I have been a shareholder of NGE since 2017, when the
Company acquired its interest in Maria Conchita, Sinu-9 and
Tiburon. Since then, NGE has raised approximately US$100 million and deployed it across these
assets, resulting in a company today with a small, yet stable,
production base and rapid growth in reserves and resources. Looking
forward, NGE has the opportunity to have an industry leading growth
trajectory, which sees our assets growing from a current production
base of 7mmcfd. Our strategic plan sees this initial base more than
doubling every year for the next 5 years, toward our corporate goal
of getting to 200mmcfd, nearly 20% of Colombia's current requirements.1 I
look forward to supporting Serafino, Federico Restrepo, Jorge
Fonseca and the rest of the management team in advancing the
Company's assets, including the high impact prospects of oil on the
Northern flank of Sinu-9 and the potential giant gas target at
Tiburon. I am determined to support all stakeholders as we advance
our current portfolio of assets and ultimately, endeavour to become
a global energy company. I am honoured that I will assume the role
as Chair from industry veteran Ronald
Pantin and look forward to our continued work together,"
said Mr. Brian Paes-Braga, Incoming
Chair of NGE.
Mr. Paes-Braga continued "I want to personally thank our
long-standing shareholders for their patience in this company
through COVID and some of its growing pains. I plan to do
everything in my power to reward you for this patience by
supporting our management team in executing on our strategic plan
as well as sharing with the markets just how unique this value
proposition is. I also want to personally welcome our new
stakeholders in this funding round. My focus will be supporting the
Company in corporate governance, attracting new institutional
investors and best in class partners for our Company's development,
as well as opportunistically assessing potential M&A
opportunities as NGE enters this very exciting chapter of high
growth."
"With this financing, led by our incoming Chair, Brian Paes-Braga, the Company is set to be cash
flow positive, resulting in over US$1
million a month in free cash flow as we drill and complete
the Aruchara-3 well" Jorge Fonseca,
Chief Financial Officer of NGE remarked. "We are laser-focused on
continuing to execute on our strategy to be an asset-light, high
free cash flow generating energy business which focuses on
attracting best in class partners at the upstream, midstream and
downstream levels of our business as we continue our journey to
becoming a critical solution to Colombia's growing energy needs."
The Offering
The Company further announces a financing commitment of up to
CDN$30,000,000 led by incoming Chair
Brian Paes-Braga and a group of
strategic investors (the "Strategic Investors"), which will
include significant insider participation from the Company. The
non-brokered private placement offering will be for the issuance
and sale of up to 30,000 convertible senior secured debenture units
(the "Debenture Units") at an issuance price of CDN$1,000 per Debenture Unit (the "Offering
Price"), for aggregate total gross proceeds of up to
CDN$30,000,000 (the
"Offering"). Completion of the Offering is contingent upon
approval of the TSX Venture Exchange ("TSXV"), compliance
with applicable Canadian securities laws, and completion of
satisfactory due diligence by the Strategic Investors, anticipated
to be completed within 30 days of this announcement.
Each Debenture Unit will consist of: (i) one 10.0% convertible
senior secured debenture with a principal amount of CDN$1,000 (each, a "Convertible
Debenture") maturing three (3) years from the closing of the
Offering (the "Maturity Date"); and (ii) 1,000 common share
purchase warrants of the Company (each, a "Warrant"), with
each Warrant entitling the holder thereof to purchase one common
share of the Company (a "Common Share") at an exercise price
equal to CDN$0.90 for a period of
three (3) years from the closing date of the Offering.
The principal amount of each Convertible Debenture will be
convertible, for no additional consideration, at the option of the
holder, in whole or in part, at any time and from time to time,
into Common Shares prior to the earlier of: (i) the close of
business on the Maturity Date; and (ii) the business day
immediately preceding the date specified by the Company for
redemption of the Convertible Debentures upon a Change of Control
(as defined in the indenture that will govern the Convertible
Debentures) at a conversion price equal to CDN$0.70 per share.
Proceeds of the Offering will be allocated towards drilling and
rework activities at the Aruchara-3 and Aruchara-1 wells,
respectively, to fill pipeline capacity at Maria Conchita and at
Sinu-9, for Company costs required to move forward with midstream
partners as well as remaining payables on Magico-1 and
Brujo-1. The Company will use the balance of the proceeds for
working capital.
Corporate Update
Maria Conchita Aruchara-1 Production
- Aruchara-1 has achieved consistent production flow rates of
7mmcfd and is selling the natural gas on the spot market at an
average sales price of US$5.50
/mcf.
Maria Conchita Aruchara-3 Development Well
- ANH approval was granted in May for the drilling of the
Aruchara-3 development well.
- The Company has made significant progress on the required civil
works ahead of the arrival of the drill rig and spudding, which is
expected to commence in July.
- The Company expects to tie the Aruchara-3 well into existing
production from Maria Conchita during the second half of the
year.
Sinu-9 Midstream Agreements
- The Company continues to finalize agreements and term sheets
with both Kronos and Promigas for gas offtake from Sinu-9 and will
continue to keep the market apprised of the progress.
Colombian Gas Market
Update
The advancement towards increasing production is timely and the
Company is very encouraged by recent domestic Colombian spot market
pricing which traded above US$6.50
per mcf this month. The stable price premium observed in
Colombia over the last decade has
room for further improvement with the supply demand fundamentals
present in the market and may increase with the arrival of the
first El Niño in almost four years.
Additions to the Board of
Directors
Mrs. Luz Stella Murgas has worked
in the energy sector for more than 18 years and is the active
Executive President of NATURGAS, the Natural Gas Association in
Colombia. She served as Vice
President of Promotion and Areas Allocation at the National
Hydrocarbons Agency, where she promoted foreign investment,
especially for the development of offshore exploration and
production. She also worked as Exploration Manager at the same
entity. Mrs. Murgas also worked at Ecopetrol (Colombia´s National
Oil and Gas Company) as a tax advisor for the entire value chain of
the business for eight years. She also participated in determining
the initial stock value for the company's IPO, as well as in its
internationalization process. In addition, she held the position of
Executive Director of her legal consulting firm with an
emphasis on environmental, social, and business affairs for the
development of projects in the mining and energy sectors. She has a
Law degree from the Universidad del Rosario and is a tax law
specialist from the same University.
Mr. Don Sewell is a private and
public company finance executive and former energy investment
banker. Mr. Sewell currently serves as the Chief Financial Officer
of a private global energy transition-focused royalty company in
addition to leading energy transition investments for SAF Group.
Prior to, he served as the Chief Financial Officer of a TSX-listed
consumer-packaged goods company and spent several years in the
energy investment banking groups of a big six Canadian bank and an
independent energy investment dealer. Mr. Sewell brings a broad
range of experience in corporate finance, capital markets,
governance and securities regulatory matters given his public
company leadership experience, in addition to advising on the
completion of several billion dollars in energy sector M&A
transactions and capital raises. Don holds a BSc degree from
McGill University and is a CFA
charterholder.
Mr. Brian O'Neill is Vice
President of SAF Growth at the SAF Group. He is a former director
of Gold-X Mining which was sold to Gran Colombia Gold (now
Aris Gold). He spent nearly a decade
in the practice of law with leading Canadian law firm, McCarthy
Tétrault LLP. His practice began in the areas of corporate and
commercial law, with a focus on mergers and acquisitions, corporate
reorganizations, corporate finance, intellectual property, and
commercial transactions. He then shifted his practice to focus on
corporate tax matters, with a particular emphasis on the
tax-related aspects of mergers and acquisitions and corporate
reorganizations. Mr. O'Neill received his B.Sc. Honours in
Molecular Genetics, with first-class standing, and his LL.B., with
distinction, from the University of
Alberta. He is a member of the Law Society of British Columbia and has completed CPA
Canada's In-Depth Tax Course.
The appointments of Mr. Paes-Braga, Mrs. Murgas, Mr. Sewell and
Mr. O'Neill are subject to regulatory approval and the completion
of the Offering.
The Company also announces that, with the filing of the
financial materials, its principal regulator, the British Columbia
Securities Commission, has lifted the cease trade order of
May 10, 2023. Effective at the
opening, Monday, July 10, 2023,
trading will be reinstated in the securities of the Company.
About NG Energy International
Corp.
NG Energy International Corp. is a publicly traded E&P
company on a mission to provide a clean and sustainable solution to
Colombia's energy needs. The
Company intends on executing this mission by producing and bringing
gas to the premium priced Colombian gas market from the blocks,
SN-9, a 311,353 acres block which is adjacent to Canacol's Nelson
field, as well Maria Conchita, a 32,518-acre block located in the
region of La Guajira. NGE's team has extensive technical expertise
and a proven track record of building companies and creating value
in South America. For more
information, please visit SEDAR (www.sedar.com) and the Company's
website (www.ngenergyintl.com).
Cautionary Statement Regarding Forward-Looking
Information
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news
release, including, without limitation, the information contained
in this news release regarding any development forecast, our
statements related to the use of proceeds of the Offering, our
statements related to the completion of the Offering,
the drilling of the Aruchara-3 well, the tie in of the
Aruchara-3 well into existing production in Maria Conchita, the
Company's target production capacity and the Sinu-9 Midstream
Agreements. Any statement that involves discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives, assumptions, future events or performance (often but
not always using phrases such as "expects", or "does not expect",
"is expected", "anticipates" or "does not anticipate", "plans",
"budget", "scheduled", "forecasts", "estimates", "believes" or
"intends" or variations of such words and phrases or stating that
certain actions, events or results "may" or "could", "would",
"might" or "will" be taken to occur or be achieved) are not
statements of historical fact and may be forward-looking
statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Factors
that could cause actual results to differ materially from those
anticipated in these forward-looking statements are described under
the caption "Risks Factors" in the Company's most recent Management
Discussion and Analysis and its Annual Information Form dated
June 30, 2023, which are available
for view on SEDAR at www.sedar.com. These risks include but are not
limited to, the risks associated with the oil and natural gas
industry, such as exploration, production and general operational
risks, volatility of pricing for oil and natural gas, changing
investor sentiment about the oil and natural gas industry,
competition in the markets where the Company operates, any delays
in production, marketing and transportation of natural gas,
drilling costs and availability of equipment, regulatory approval
risks and environmental risks. Forward-looking statements contained
herein, including but not limited to the Company's
statements related to the use of proceeds of the Offering,
statements related to the completion of the Offering, the drilling
of the Aruchara-3 well, the tie in of the Aruchara-3 well into
existing production in Maria Conchita, the Company's target
production capacity and the Sinu-9 Midstream Agreements are
made as of the date of this news release, and the Company
disclaims, other than as required by law, any obligation to update
any forward-looking statements whether as a result of new
information, results, future events, circumstances, or if
management's estimates or opinions should change, or otherwise.
There can be no assurance that forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, the reader is cautioned not to place undue reliance on
forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Abbreviations
The abbreviations set forth below have the following
meanings:
Natural Gas
|
mcf
|
thousand cubic feet
|
mmcfd
|
million cubic feet per
day
|
_________________________
|
|
1 Bolsa
Mercantil De Colombia, Gestor Del Mercado De Gas Natural En
Colombia, July 5, 2023 Daily Report,
https://www.bmcbec.com.co/sites/default/files/2023-07/Informe%20diario%202023.07.05.pdf.
|
SOURCE NG Energy International Corp.