NG ENERGY PROVIDES DEVELOPMENT AND OPERATIONAL UPDATE FOR SINU-9 AND MARIA CONCHITA
Sinu-9 -
Substantial progress has been made over the past month by the Company and the
The remaining activities required to complete the construction of the Phase 1 infrastructure (with expected completion dates) are as follows:
- Brujo Platform and civil works: scheduled for completion by the first week of July;
- Brujo-1X well completion: scheduled for completion by the end of July;
- Brujo-Magico flowline: scheduled for completion by the end of July;
- Pipeline connection equipment installation and completion of the 32 km pipeline (as defined by INFRAES S.A.S E.S.P): scheduled for completion by the end of July (see figure 1); and
- Final equipment shipments from
Houston have been ordered and are on the way to site with final installations scheduled for completion by the first week of August.
The Company remains on track to allow for project completion and subsequent production testing and ramp up to begin in Q3, 2024.
Figure 1 – 32 km Pipeline Progress
Figure 2 – Jobo Connection point
Figure 3 – Official delivery point to Promigas
Maria Conchita – Production Optimization
A comprehensive analysis of the compression system at the Maria Conchita production facilities is underway to determine the potential for increasing gas production rates. Further, in July, the H4 zone at Aruchara-3 will be tested to evaluate production potential of the fractured zones. With these activities underway, the Company maintains production at an average rate of 18 MMcf/d with 78% of this production sold under natural gas sales contracts with a term of 3 to 5 years. The balance of the production from
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About
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 the timeline for completion of the construction of Phase-1 infrastructure at Sinu-9, the timeline for production testing at Sinu-9, the potential for increasing production rates at Maria Conchita, the testing of Aruchara-3 at Maria Conchita, the Company's future production volumes and production growth, growth in the Company's reserve volumes and domestic shortages in
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
Neither the
Abbreviations
The abbreviations set forth below have the following meanings:
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Natural Gas |
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MMcf/d |
million cubic feet per day |
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MMBtu |
one million British thermal units |
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Other |
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3P reserves |
Proved + Probable + Possible reserves |
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2P reserves |
Proved + Probable reserves |
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1P reserves |
Proved reserves |
Information Regarding the Preparation of Reserves and Resource Information
The Company's Form 51-101F1 – Statement of Reserves Data and Other Oil and Gas Information for the fiscal year ended
The report entitled "Evaluation of the P&NG Reserves and Resources of
The report entitled "Evaluation of the P&NG Reserves and Resources of
For additional information regarding the
Sinú-9
Report, the Maria Conchita Report and the reserves information contained in this news release please see the 2023 51-101F1 filed on SEDAR+ on
Caution Respecting Reserves Information
The determination of oil and natural gas reserves involves the preparation of estimates that have an inherent degree of associated uncertainty. Categories of Proved, Probable and Possible reserves have been established to reflect the level of these uncertainties and to provide an indication of the probability of recovery. The estimation and classification of reserves requires the application of professional judgement combined with geological and engineering knowledge to assess whether or not specific reserves classification criteria have been satisfied. Knowledge of concepts including uncertainty and risk, probability and statistics, and deterministic and probabilistic estimation methods is required to properly use and apply reserves definitions.
The recovery and reserve estimates of natural gas liquids and natural gas reserves provided herein are estimates only. Actual reserves may be greater than or less than the estimates provided herein. The estimated future net revenue from the production of the disclosed natural gas reserves does not represent the fair market value of these reserves.
Information Regarding Reserves
Reserves are estimated remaining quantities of commercially recoverable oil, natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date, based on the analysis of drilling, geological, geophysical and engineering data; the use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Reserves are further classified according to the level of certainty associated with the estimates and may be subclassified based on development and production status.
"Proved reserves" are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated Proved reserves.
"Probable reserves " are those additional reserves that are less certain to be recovered than Proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated Proved plus Probable reserves.
"Possible reserves " are those additional reserves that are less certain to be recovered than Probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated Proved plus Probable plus Possible reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of Proved plus Probable plus Possible reserves.
The qualitative certainty levels referred to in the definitions above are applicable to "individual reserves entities" (which refers to the lowest level at which reserves calculations are performed) and to "reported reserves" (which refers to the highest-level sum of individual entity estimates for which reserves estimates are presented). Reported reserves should target the following levels of certainty under a specific set of economic conditions:
- at least a 90% probability that the quantities actually recovered will equal or exceed the estimated Proved reserves; and
- at least a 50% probability that the quantities actually recovered will equal or exceed the sum of estimated Proved plus Probable reserves.
A qualitative measure of the certainty levels pertaining to estimates prepared for the various reserves categories is desirable to provide a clearer understanding of the associated risks and uncertainties. However, the majority of reserves estimates will be prepared using deterministic methods that do not provide a mathematically derived quantitative measure of probability. In principle, there should be no difference between estimates prepared using probabilistic or deterministic methods.
Each of the reserve categories (Proved and Probable) may be divided into developed and undeveloped categories as follows:
"Developed Producingreserves " are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.
"Developed Non-Producing reserves " are those reserves that either have not been on production, or have previously been on production, but are shut-in, and the date of resumption of production is unknown.
"Undeveloped reserves " are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g., when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves classification (Proved, Probable and Possible) to which they are assigned and expected to be developed within a limited time.
In multi-well pools it may be appropriate to allocate total pool reserves between the developed and undeveloped subclasses or to subdivide the developed reserves for the pool between developed producing and developed nonproducing.This allocation should be based on the estimator's assessment as to the reserves that will be recovered from specific wells, facilities and completion intervals in the pool and their respective development and production status.
Estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. Additionally, all estimates of future net revenue, whether calculated without discount or using a discount rate, do not represent fair market value.
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