NG Energy's Colombian Gas Play: A Steady Flow Toward Growth

NG Energy International Corp. has taken a significant step forward in its Colombian gas operations with recent updates on the Sinu-9 project. The company’s announcement on April 25, 2025, underscores progress in production capacity, reserve upgrades, and strategic partnerships—all critical to unlocking the full potential of one of Colombia’s most prolific gas basins. Let’s dissect the implications for investors.

Production Milestones: Overcoming Technical Challenges

The Magico-1X and Brujo-1X wells are delivering results that outperform historical tests. At full capacity, Magico-1X produced 12.2 MMcf/d at a 50.5/64” choke in April 2025, surpassing its August 2022 performance by 30%. Similarly, Brujo-1X achieved 10 MMcf/d at a 40/64” choke, with minimal condensate production and humidity well below regulatory limits. These improvements, enabled by the INFRAES mobile plant’s dew-point management, confirm the viability of the reservoir when paired with optimized surface infrastructure.

By Q3 2025, NG Energy aims to ramp up production to over 40 MMcf/d via upgrades to the Central Processing Facility. This milestone represents a 300% increase from current levels and sets the stage for the company’s long-term target of 200 MMcf/d by 2027–2028.

Reserves and Resources: A Foundation for Scale

The April 24 reserves update adds critical context. At Sinu-9 (72% working interest), proven (1P) reserves stand at 32.0 Bcf, with 130.1 Bcf in proved plus probable (2P) reserves. Additionally, 125.1 Bcf of contingent resources await development. Meanwhile, the Maria Conchita project (80% working interest) boasts 49.0 Bcf of 1P gas reserves and 195.4 Bcf of prospective resources. Combined, these assets position NG Energy to capitalize on Colombia’s ~$8/MMBtu gas prices, which are among the highest in the region.

The proved reserves alone at Sinu-9 have a before-tax NPV10 of $22.3 million, while the 2P reserves reach $178.8 million. With Colombia’s energy demand growing—driven by industrialization and power generation—NG Energy’s assets are well-positioned to meet this need.

Financial and Strategic Considerations

NG Energy has invested over $100 million in Sinu-9 to date, a significant capital outlay that underscores management’s confidence. The recent sale of a 40% contractual interest in Sinu-9 to Etablissements Maurel & Prom S.A. also signals a strategic move to share development costs and risks. While insiders retain ~32% ownership, the partnership with Maurel & Prom could unlock further financing for infrastructure upgrades and drilling programs.

Risks and Challenges

Despite the progress, execution risks remain. Regulatory approvals for infrastructure expansions could delay timelines, while equipment shortages or delays in the Central Processing Facility upgrades might impede the Q3 2025 target. Additionally, Colombia’s political environment—where energy policies can shift—remains a wildcard.

Conclusion: A High-Reward, High-Conviction Play

NG Energy’s updates paint a compelling picture of a company turning exploration success into commercial production. With 40 MMcf/d achievable in six months and a clear path to 200 MMcf/d by 2028, the company is well-positioned to capitalize on Colombia’s gas market. The reserves data—130.1 Bcf in 2P reserves at Sinu-9 and 195.4 Bcf of prospective resources at Maria Conchita—provide a robust foundation for growth, especially at current gas prices.

However, investors must weigh these opportunities against execution risks. If NG Energy can deliver on its targets, the stock (if listed) or partnership returns could soar. For now, the company’s progress reinforces its status as a key player in Colombia’s energy transition—a region where gas demand is set to grow by ~5% annually through 2030. This is a story to watch closely for those seeking exposure to high-potential, under-the-radar energy plays.