/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
- Option to acquire 25% working interest in the VMM39 block with
upcoming drilling in an established oil basin.
- Submission being prepared to drill and test SINU-9 oil
prospect.
VANCOUVER, BC, Aug. 9, 2023
/CNW/ - NG Energy International Corp. ("NGE" or the
"Company") (TSXV: GASX) (OTCQX: GASXF) wishes to provide an
update on the Company's oil prospects and provide further details
on its previously announced option to acquire a 25% working
interest (WI) in the VMM39 Block (the "Option"). The Option
is exercisable by the Company, in its sole discretion and for no
additional consideration, upon completion of the San Diego-1X exploration well located in the
VMM39 Block.
The Company intends to advance prospective resources (leads) at
both VMM39, as a non-operating partner of Clean Energy, and Sinu-9
blocks to serve as a complementary strategy and based on success,
provide potential cash flow to further advance the Company's
growing natural gas business.
"NG Energy continues to be focused on providing the critical
transition fuel of natural gas to Colombians; however, we feel it
important to our shareholders to advance a strategy that tests
potential latent value that is sitting within our Company's current
concessions, like Sinu-9, as well as provides potential near term
cash flow to continue to capitalize and advance our gas business,"
commented Serafino Iacono, CEO of NG
Energy.
VMM39 Block
- VMM39 is located in the center of Colombia in the Middle Magdalena Basin, which
is responsible for historic production of greater than 1.4 billion
barrels of oil.
- The VMM39 block hosts significant potential for light oil with
associated gas and is well-positioned in the middle of strategic
oil and gas infrastructure in Colombia, located just 60km from the largest
refinery in the country, the Barrancabermeja Refinery.
- The Company will participate in the San Diego-1X exploration well with an option
to acquire a 25% WI in the block.
Sinu-9 Block (72% WI) – Oil Prospect
- In 2022, the Company identified light crude resources in the
Western Region of the Sinu-9 block.2
- Using Isochron data and the previously drilled ANH LA X-1
stratigraphic well, which contains good oil shows in various
sections of the cores, the Company identified unrisked best
estimate prospective resources (leads) of 279 million barrels of
oil.3,4
- The Company is preparing to submit an application to the ANH in
order to test these prospective resources upon receipt of approval
to drill.
Note, there is no certainty that any portion of the resources
will be discovered. If discovered, there is no certainty that it
will be commercially viable to produce any portion of the
resources.
________________________________
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1Ecopetrol
announces commerciality in two oil fields in Santander, October 11,
2021
(https://www.ecopetrol.com.co/wps/portal/Home/en/news/detail/Noticias-2021/ecopetrol-announces-commerciality-two-fields-santander).
|
2 As
disclosed in the Company's press release dated March 24, 2022
entitled "NG Energy Announces Light Crude Oil Prospective
Resources in Sinu 9 Block".
|
3 Risked
prospective resources can be estimated once the lead is upgraded to
prospect. Lead is defined as a potential accumulation within a play
(a family of geologically similar fields, discoveries, prospects
and leads) that requires more data acquisition and/or evaluation to
be classified as a prospect.
|
4 Estimates
of Prospective Resources are from the Company's report entitled
"Evaluation of the Interests of NG Energy International Corp. in
the Prospective Resources within the Sinu 9 Block in the Sinu San
Jacinto Basin of Colombia" prepared by Petrotech Engineering Ltd.,
an independent qualified reserves and resources evaluator, in
accordance with the COGE Handbook with an effective date of
February 28, 2022.
|
Details on Transaction for VMM39
The Company's acquisition of the Option (the
"Transaction") was completed pursuant to an investment and
option agreement dated July 31, 2023
among CleanEnergy Resources S.A.S. ("Clean"), MKMS Enerji
Sucursal Colombia, a wholly owned subsidiary of the Company, and
the Company. The Transaction is an arm's length transaction and
subject to final approval of the TSX Venture Exchange.
Pursuant to the Transaction, the Company has issued a total of
6,592,000 common shares at a deemed price of C$0.80 per share for total share consideration of
approximately US$4,000,000 (the
"Issued Shares"). 3,296,000 Issued Shares will be subject to
a four-month hold period under applicable securities laws, with the
remaining 3,296,000 Issued Shares subject to a one-year hold
period. Additionally, pursuant to the Transaction, the Company paid
Clean cash consideration in the amount of US$5,500,000 as an investment into the
development activities at the San
Diego-1X exploration well located in the VMM39 Block.
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 SN-9, a 311,353
acres block which is adjacent to Canacol's Nelson field, as well as
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.sedarplus.ca) 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 and
our statements related to anticipated business plans or
strategies, including future drilling activities in the Sinu-9
Block and the TSX Venture Exchange's approval of the
Transaction. 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 anticipated business plans or strategies,
including future drilling activities in the Sinu-9 Block and the
TSX Venture Exchange's approval of the Transaction 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.
Information Regarding
Prospective Resources
This news release discloses estimates of the Company's
prospective resources. There is no certainty that it will be
commercially viable to produce any portion of such prospective
resources. Estimates of prospective resources involve additional
risks over estimates of reserves. The accuracy of any resources
estimate is a function of the quality and quantity of available
data and of engineering interpretation and judgment. While
resources presented herein are considered reasonable, the estimates
should be accepted with the understanding that reservoir
performance subsequent to the date of the estimate may justify
revision, either upward or downward.
Prospective Resources are defined in the COGE Handbook as
those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from undiscovered accumulations by
application of future development projects. Prospective
resources have both an associated chance of discovery5
and a chance of development6. Prospective
Resources are further subdivided in accordance with the level of
certainty associated with recoverable estimates assuming their
discovery:
- Low Estimate: This is considered to be a conservative
estimate of the quantity that will actually be recovered. It is
likely that the actual remaining quantities recovered will exceed
the low estimate. If probabilistic methods are used, there should
be at least a 90 percent probability (P90) that the quantities
actually recovered will equal or exceed the low estimate.
- Best Estimate: This is considered to be the best estimate of
the quantity that will actually be recovered. It is equally likely
that the actual remaining quantities recovered will be greater or
less than the best estimate. If probabilistic methods are used,
there should be at least a 50 percent probability (P50) that the
quantities actually recovered will equal or exceed the best
estimate.
- High Estimate: This is considered to be an optimistic
estimate of the quantity that will actually be recovered. It is
unlikely that the actual remaining quantities recovered will exceed
the high estimate. If probabilistic methods are used, there should
be at least a 10 percent probability (P10) that the quantities
actually recovered will equal or exceed the high estimate.
Prospective resources are not, and should not be confused
with, reserves or contingent resources. "Prospective Resources" are
those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from undiscovered accumulations by
application of future development projects. Prospective Resources
have both an associated chance of discovery and a chance of
development.
There is no certainty that any portion of the prospective
resources will be discovered. If discovered, there is no certainty
that it will be commercially viable to produce any portion of the
prospective resources or that the Company will produce any portion
of the volumes currently classified as prospective
resources.
The estimates of prospective resources involve implied
assessment, based on certain estimates and assumptions, that the
resources described exists in the quantities predicted or
estimated, as at a given date, and that the resources can be
profitably produced in the future. Actual prospective resources
(and any volumes that may be reclassified as reserves) and future
production therefrom may be greater than or less than the estimates
provided herein.
The resource estimates presented above are subject to certain
risks and uncertainties, including those associated with the
drilling and completion of future wells, limited available
geological and geophysical data and uncertainties regarding the
actual production characteristics of the reservoirs, all of which
have been assumed for the preparation of the resource
estimates.
_________________________________
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5 The chance
that an exploration project will result in the discovery of
petroleum is referred to as the Chance of Discovery.
|
6 The chance
that an accumulation will be commercially developed is referred to
as the Chance of Development.
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SOURCE NG Energy International Corp.