Signing of Letter of Intent to Acquire 40% Operating Interest in Sinu-9 Gas License in Colombia By Investing.com

PARIS–(BUSINESS WIRE)–Regulatory News:

Maurel & Prom (Paris:MAU):

• To produce and prepare for development, offshore gas assets, which are technically available with existing basic equipment.
  • It is located in the district of Sinu San Jacinto and is connected to the Promigas pipeline with direct access to urban and industrial areas on the northern coast of Colombia.
  • High quality property with newly updated facilities
  • First gas hit in November 2024 as part of ongoing long-term exploration
  • Current facilities are in place for gross production of up to 40 mmcfd (16 mmcfd net to 40% realized operating profit) with development expected to increase production beyond this initial level.
• Verified sites with extensive research and top reviews
  • A prolific center, with many productive fields in the area and strong geological development
  • Total proved and probable (2P) and probable plus probable (3P) reserves of 158.8 bcf and 340.8 bcf as of December 31, 2023 (respectively 63.5 bcf and 136.3 bcf net to 40% earned interest in work)
  • Lots of prospects, several of which are committed to digging in the next 18 months
• Fundamentals are very strong for the Colombian domestic gas market
  • A strategic source of gas for the undersupplied Colombian market, which is expected to account for 30% of demand by 2026.
  • Spot domestic gas prices above $8/mmBtu from Q4 2024
  • Supply shortages are expected to last at least the next five years, while new gas reserves in the country will come with high development costs (offshore fields)
• Strategic opportunity for M&P to grow in Colombia
  • M&P has been in the country for over 20 years
  • Cash flow diversification: non-Brent-linked earnings in the OECD oil and gas stable
  • It assumes a purchase price of $150 million (as of March 1, 2025), which is fully funded from M&P’s existing cash resources and existing services.
  • M&P will have an option 12 months from closing to acquire an additional 5% operating interest in Sinu-9 from NG Energy under the same terms ($18.75 million assumed on the date of same process)

Etablissements Maurel & Prom SA (“M & P”, Group) is pleased to announce that it has entered into a memorandum of understanding with NG Energy International Corp. (NG Energy), listed on the TSX Venture Exchange of Toronto, to acquire a 40. % working interest in the Sinu-9 gas license in Colombia for a consideration of $150 million as of February 1, 2025 Pursuant to the letter of intent, the parties have agreed to use their best efforts to promptly enter into an express agreement consistent with the letter of intent.

Olivier de Langavant, Chief Executive Officer of M&P, announced: This acquisition represents an important step in M&P’s growth, bringing the Group part of an advanced and highly anticipated gas license operation. The asset is in the first stage of development, which allows us to use our operational knowledge to improve all existing resources and bring a domestic gas source to the Colombian market. This marks an important milestone in our history in Colombia, re-establishing M&P as a national brand with the greatest potential for organic growth. NG Energy has done a great job of bringing this property to the first gas, and we look forward to expanding the relationship as Sinu-9 partners..

Asset description

The Sinu-9 gas field is located in the Lower Magdalena Valley, 75km from the Caribbean coast of Colombia, and covers an area of ​​approximately 1,260 square kilometers in the department of Córdoba. The Sinu-9 gas field is located in the Sinu San Jacinto region, close to producing gas blocks held by Canacol and Hocol. NG Energy is currently the operator of the block and has a 72% working interest in the license, alongside Desarrolladora Oleum, SA DE CV (15%), Clean Energy Resources SAS (7.8%), and FG Inc. (5.2%).

The site has established infrastructure with access to the Promigas pipeline, which is the northernmost line of Colombia, in the Jobo region.

Sinu-9 achieved first gas production in November 2024, under the ongoing long-term test of the Magico-1X and Brujo-1X wells. There are facilities in place for gross production of up to 40 mmcfd (16 mmcfd net to 40% of earned profit), and further development will increase production significantly beyond this initial level .

The field had 2P and 3P reserves of 158.8 bcf and 340.8 bcf, respectively, as of December 31, 2023 (63.5 bcf and 136.3 bcf of 2P/3P reserves at 40% discovered working interest), based on NG Energy’s latest confirmed sources. a report prepared by Sproule International Limited (Sproule), an independent qualified reserve evaluator, whose report was prepared using the guidelines listed in the Canadian Oil and Gas Evaluation Handbook.

Sinu-9 has extensive exploration and exploration, in a very gas-rich field with many producing fields in the area. Many features and prospects are set to be drilled in the next 18 months and are expected to significantly increase the resource base.

Sinu-9 is fully licensed with an environmental permit issued by the National Environmental Licensing Council (ANLA) of Colombia to drill 22 wells from 11 locations. The infrastructure is fully operational for the first phase of development, with 40 mmcfd of total treatment and offshore capacity.

M&P experience in Colombia

The group has been operating in Colombia for more than 20 years, and this business marks its return as a manufacturer of furniture products in the country. M&P has successfully invested nearly $1 billion in Colombia to date, delivering strong returns. Colombia is a stable oil and gas management region, well known to M&P, which complements our other operations throughout Africa and Latin America. With near-term growth and asset development, the proposed operation positions M&P to build size and scale in Colombia to leverage its operational capabilities.

Due to the reduction of large mature fields, the natural gas market in Colombia is currently facing an imbalance between domestic production and demand, leading to higher prices and reliance on imports. while natural gas is imported. Domestic spot gas prices have been at an all-time high and exceeded $8 per mmBtu from Q4 2024. This supply shortage is expected to last until at least 2030, with the development of production capacity e more will come at a higher cost.

Funding

The $150 million consideration will be financed from M&P’s existing cash resources and available credit facilities ($260 million as of December 31, 2024).

Conditions

The closing of the transaction is subject to the negotiation and execution of a definitive agreement between the parties, the receipt of regulatory approval, including the approval of the Colombian National Hydrocarbons Agency (ANH), and the satisfaction of other customary closing conditions.

M&P will have an option 12 months from closing to acquire an additional 5% interest in Sinu-9 from NG Energy under the same terms: $18.75 million, on the same date of 1 March 2025.

Counselors

Hannam & Partners is acting as the exclusive financial advisor to M&P. Herbert Smith Freehills LLP, Torys LLP, and MartÃnez Quintero Mendoza González Laguado & De La Rosa are acting as legal advisors to M&P.

About NG Energy

NG Energy International Corp. is a growth-oriented natural gas exploration and production company listed on Toronto’s TSX Venture Exchange, and focused on delivering long-term shareholder and stakeholder value through discovery, and the development of large natural gas fields in developing countries. , to support energy transition and economic growth. The NG Energy Group has extensive experience in markets and capital markets with a proven track record of building companies and creating great value in South America. To date, more than $100 million has been invested in the exploration and development of its two main gas assets in Colombia, Sinu-9 and Maria Conchita. For more information, you can visit the NG Energy website (www.ngenergyintl.com).

Vocabulary

French			English
cubic feet	pc	cf	cubic feet
cubic meters per day	Mpc/j	mmcfd	cubic meters per day
billions of cubic meters	Gpc	bcf	billions of cubic meters
a gun	b	bbl	barrel
barrels of oil per day	b/j	bopd	barrels of oil per day
million barrels	Mrs	mmbbls	million barrels
barrels of oil equivalent	bep	come on	barrels of oil equivalent
barrels of oil equivalent per day	bp/j	boopd	barrels of oil equivalent per day
million barrels of oil equivalent	Mbep	plant	million barrels of oil equivalent

For more information, please visit www.maureletprom.fr/en/

This document may contain forward-looking statements regarding Maurel & Prom’s financial condition, results, business strategy and industry. By their very nature, forecasts involve risk and uncertainty based on events or conditions that may not occur in the future. These forecasts are based on assumptions that we believe are reasonable, but which may prove to be incorrect and are subject to a number of risk factors, such as price fluctuations, changes in exchange rate, uncertainty related to the estimation of our oil resources, actual values ​​of oil production rates and related costs, operational problems, political stability, legal or regulatory changes, even wars, terrorism and damage.

Maurel & Prom is listed on Euronex (EPA:) Paris
“””” PEA-PME and SRD are eligible
Isin FR0000051070 / Bloomberg MAU.FP / Reuters MAUP.PA

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Source: Maurel & Prom SA