"This quarter, we navigated previously disclosed operational challenges at Maria Conchita that affected production," said Jorge Fonseca, the Company's Chief Executive Officer. "Despite these challenges, we're turning the corner with strong momentum. Sinu-9 is now producing over 12 MMcf/d, and we're advancing with upgrades at our Central Processing Facility, which will see production capacity at Sinu-9 increasing to over 40 MMcf/d (gross) in Q3 2025, as well as the construction of the twin pipeline with our infrastructure partner INFRAES. With the M&P transaction nearing completion, the drilling of the Aruchara-4 well planned for early July 2025, followed by the workover of the Aruchara-3 well and the completion of the compressor and plant expansion to 28 MMcf/d at Maria Conchita, alongside the tie-in of the Aruchara-4 well, we're poised for robust growth in the second half of fiscal 2025."

"In Q1, the Company successfully got  through the challenging transition of the business from a small, single asset production company to a fast-growth business with two producing gas fields, as well as bringing on a long-term partner in Maurel & Prom to advance the extensive Sinu-9 field quicker and more effectively, all while significantly strengthening the Company's balance sheet and expanding operational capabilities. It is clear to us that the timing of our gas supply into the Colombian domestic market continues to be of critical importance for the country and, in turn, will continue to reward our stakeholders for years to come given the continued tight market," Brian Paes-Braga, Executive Chairman commented.

"Looking into the second half of this year, we could not be more excited to be allocating capital into both Maria Conchita and Sinu-9 through an aggressive drilling program, the Company's most active drill program in its history, as well as seeing our infrastructure partners match our drilling plan with takeaway capacity to ensure quick turnaround from drilling to cash flow. I want to personally thank all of our partners and stakeholders for their commitment, patience as well as tenacity through the Company's transition."

M&P Transaction

During Q1 2025, as disclosed in the Company's news release dated February 10, 2025, the Company entered into a definitive asset purchase agreement with M&P for the sale of a 40% operating working interest in Sinu-9 for total cash consideration of US$150 million. The Company has received an initial payment of US$20 million with the balance of the consideration, US$130 million, to be received upon completion of the transaction. Completion is conditional on the satisfaction or waiver of all the conditions precedent outlined in the definitive asset purchase agreement, including, but not limited to, obtaining all necessary regulatory approvals, including the approval of the Colombian National Hydrocarbons Agency ("ANH"). The application has been filed with the ANH for approval of the transaction.

About NG Energy International Corp.

NG Energy International Corp. is a growth-orientated natural gas exploration and production company focused on delivering long-term shareholder and stakeholder value through the discovery, delineation and development of large-scale natural gas fields in the Americas, supporting energy transition and economic growth. NGE's team has extensive technical and capital markets expertise with a proven track record of building companies and creating significant value in South America. In Colombia, the Company is executing on this mission with a rapidly growing production base and an industry-leading growth trajectory, delivering natural gas into the premium-priced Colombian marketplace (~US$8/MMBtu) with projected triple digit production growth over the next 2-3 years towards a production goal of 200 MMcf/d. To date, the Company has raised over US$200 million in debt and equity and has constructed and commissioned 3 gathering, processing and treatment facilities and associated pipelines with gross processing and transportation capacity of 60 MMcf/d expected in Q3 2025 with significant capital contributions from insiders who currently own approximately 32% of the Company. 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, statements related to future natural gas prices in Colombia, future production volumes at Sinu-9, the timeline for completion of the drilling of the Aruchara-4 well, the timeline for completion of the workover of the Aruchara-3 well, the timeline for completion of compressor expansion activities at Maria Conchita and completion of the Company's transaction with M&P. 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 "Risk Factors" in the Company's most recent Management Discussion and Analysis and its Annual Information Form dated April 28, 2025, which are available for view on SEDAR+ at www.sedarplus.ca. 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, the volatility of pricing for oil and natural gas, the inability to market natural gas production and changes in natural gas sale prices, changing investor sentiment about the oil and natural gas industry, any delays in production, marketing and transportation of natural gas, drilling costs and availability of equipment, regulatory approval risks and environmental, health and safety risks. Forward-looking statements contained herein 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:

Information Regarding the Company's Working Interest Disclosure

With regard to the Company's working interests held in both the Maria Conchita and Sinu-9 Blocks, in both the context of this news release and the Company's previous news releases, the term "working interest", ultimately refers to the rights and obligations agreed to, eventually, materialize a contractual interest in an exploration and production contract before the ANH, subject to the fulfillment of certain conditions. These conditions involve the assumption of financial risks and are generally linked to exploration by virtue of joint operating agreements. Once such conditions are fulfilled, the acquisition of a registered contractual interest, as party of record, in the exploration and production contract may materialize, by way of a request for approval of assignment before the ANH. For this reason, as is common practice within the oil and natural gas industry as a whole, the disclosed "working interest" may not coincide with the Company's current contractual interest in the exploration and production contract.

The assignment and allocation of "working interests" does not affect or undermine, in any way, the rights and obligations of registered parties under the relevant exploration and production contracts. Registered parties remain wholly and totally liable before the ANH, the Colombian authorities and third parties in connection with any and all obligations, risks and liabilities derived from the execution, performance or termination of the exploration and production contracts. Conversely, the rights and obligations that comprise "working interests" are only enforceable vis a vis between the executing parties under private agreements, and have no legal effects before the ANH, the Colombian authorities or third parties.

As of the date hereof, the Company is a party of record and holds a 51% contractual interest, in the exploration and production contract for the Sinu-9 Block granted by and entered into with ANH. However, under the private agreements regarding the working interests in the Sinu-9 Block, the Company holds a 72% working interest. This means a 21% working interest is yet to be assigned and acknowledged as a contractual interest in the exploration and production contract, given the conditions to do so, including ANH approval, are yet to be fulfilled.  Once these conditions are met, the Company will submit an approval request with ANH.

As disclosed in the Company's news release dated February 10, 2025, the Company has agreed to sell a 40% contractual interest in the exploration and production contract for the Sinu-9 Block to Etablissements Maurel & Prom S.A., effective as of February 1, 2025. Additionally, Clean Energy Resources S.A.S. remains the operator of record under such exploration and production contract and before the ANH.

With respect to the Maria Conchita Block, the Company holds 100% of the contractual interest as the sole party and operator of record under the relevant exploration and production contract entered into with the ANH, and holds an 80% working interest under private agreements with third parties.

 

SOURCE NG Energy International Corp.

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