NG Energy provides Sinu-9 development update and announces transition of board of directors and senior management

NG Energy International release

CALGARY, AB, August 6, 2024 – NG Energy International Corp. (“NGE” or the “Company”) (TSXV: GASX) (OTCQX: GASXF) is pleased to provide a development update for its flagship Sinu-9 gas project in Colombia as well as changes to its board of directors (the “Board”) and senior management team.

Sinu-9 Phase 1 Infrastructure Development Update

Since the Company last provided a development update in its June 27, 2024 news release, the Company, with its field partners Clean Energy Resources S.A.S. and Desarrolladora Oleum and infrastructure partners Surenergy S.A.S. E.S.P. and INFRAES S.A.S E.S.P., has made significant progress across all activities and is now in the final stages of completing construction activities for the successful completion of its Phase 1 infrastructure project at Sinu-9. Currently, as part of NGE’s commitment to local communities, there are over 140 local workers building this critical energy project for Colombia. The Company is delighted to report that its relationships with local communities are strong and continue to strengthen and that there have been no blockades or stoppages since its June 27, 2024 news release. Facilities equipment mobilization and assembly is in the final stages and pipeline connections are nearing completion, which will enable early production by the end of August and full production in September.

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: the final stage of completing bases for all production and treatment facilities, auxiliary civil and complementary works is expected to be complete by mid-August;
• Brujo-1X well completion: the Brujo-1X well has been successfully completed and is ready for production with 3 1/2" tubing, packers and sleeves, enabling commingled production or, if necessary, production from separate zones tested via DSTs during drilling. These tests achieved flow rates of up to 21 MMcf/d from the upper zone alone. The wellbore brine has been displaced, and gas has been flared at the rig flare. The well has been shut down and is now ready to commence production as soon as facilities are completed, pending connection to the Central Processing Facility (CPF), which is currently under its final stage of construction;
• Brujo-1X flowline to platform: expected to be completed by mid-August to allow for early production;
• Magico-1X flowline to platform: expected to be completed by the end of September to add additional natural gas to the system to get to the full 30 MMcf/d capacity;
• Gathering, treatment and compression facilities (Surenergy S.A.S E.S.P): the treatment plant and two compressors have been successfully loaded in Cartagena and mobilization to site is underway to allow for an expedited production start with additional compressors to be moved by the end of August (from Brujo-1X); and
• Pipeline connection equipment installation and completion of the 32km pipeline (INFRAES S.A.S E.S.P): the pipeline is 100% complete and is in the final stage to be prepared and ready to connect the pipeline to the CPF.

As of the end of July, the total workforce for the Sinu-9 Phase 1 infrastructure project reached a milestone of approximately 160 individuals, comprising staff, contractors, and local workers. With all final construction activities nearing completion, commissioning of Phase 1 for early production is expected in the next three to four weeks and full production is expected to commence within the next six to eight weeks.

Maria Conchita Operational Update

Further to the Company’s June 27, 2024, news release, the Company has completed its production optimization activities at Maria Conchita and is now completing production planning and geological studies to test and successfully produce natural gas from the discovered H4 zone from the Aruchara-3 well.

Board and Senior Management Transition

The Company has accepted Serafino Iacono’s resignation as director and Co-Chairman of the Board. Mr. Iacono has been a member of the Board since June 3, 2019, and has served as Co-Chairman of the Board since March 22, 2024. In addition to being a member of the Board, Mr. Iacono served as a member of the compensation committee and has previously served as the Company’s Chief Executive Officer from June 3, 2019 until March 22, 2024. In connection with his resignation, Mr. Iacono has voluntarily agreed to lock-up his shareholdings in the Company for a period of eight months.

The Company has also accepted Federico Restrepo-Solano’s resignation as a director of NGE. Mr. Restrepo-Solano resigned as the Company’s President and Chief Development Officer effective July 3, 2024. Mr. Restrepo-Solano has been a member of the Board since June 3, 2019, and had served as the Company’s President and Chief Development Officer from December 1, 2022 until July 3, 2024. In addition to being a member of the Board, Mr. Restrepo-Solano served as a member of the compensation committee. In connection with his resignation, Mr. Restrepo-Solano has voluntarily agreed to lock-up his shareholdings in the Company for a period of eight months.

Both Mr. Iacono and Mr. Restrepo-Solano are stepping down as members of the Board to pursue other endeavors. Mr. Iacono and Mr. Restrepo-Solano remain strong supporters of the Company and intend to continue to support the Company’s growth in consulting roles, as local resources in Colombia, and as shareholders.

The Company further announces the appointment of Mr. Don Sewell as the President of the Company. Mr. Sewell has been integrally involved in the Company’s operations and, in particular, the advancement of the Sinu-9 Phase 1 infrastructure project, for the past twelve months since being appointed to the Board on July 31, 2023.

Mr. Don Sewell is a private and public company finance executive and former energy investment banker. Mr. Sewell currently serves as the Chief Financial Officer of a private global energy transition-focused royalty company in addition to leading energy transition investments for SAF Group. Previously, he served as the Chief Financial Officer of a TSX-listed consumer-packaged goods company and spent several years in the energy investment banking groups of a big six Canadian bank and an independent energy investment dealer. Mr. Sewell brings a broad range of experience in corporate finance, capital markets, operations, governance and securities regulatory matters, given his public company leadership experience and having advised on the completion of several billion dollars in energy sector M&A transactions and capital raises. Don holds a BSc degree from McGill University and is a CFA charterholder.

Brian Paes-Braga, Chief Executive Officer and Chairman of NGE, commented, “I would like to express my deepest appreciation and gratitude to Serafino Iacono and Federico Restrepo-Solano, two of the founders of NGE, for their unwavering service, personal financial commitment and dedication to the Company over these past years. I wish them both all the best in their future endeavours and appreciate their important ongoing support of NGE. I am delighted to announce Don Sewell as our new President. Having observed his increasing involvement in the Company's day-to-day operations over the past year and having worked with him for a few years now, I am confident in his ability to drive growth, support NGE in growing our organization and culture and drive operational excellence in this new role as we transition from explorer to a substantial producer of natural gas.”

Mr. Paes-Braga continued, “These organizational changes come as we near the completion of our Phase 1 infrastructure project at Sinu-9 and build the foundation for accelerated future growth. I want to again personally thank all of our partners, employees and consultants for their heroic efforts in bringing this greenfield Sinu-9 project into reality, resulting in much needed energy for Colombians.”

Following Mr. Iacono’s resignation, Mr. Paes-Braga will serve as the sole Chairman of the Board and the board will decrease from eight members to six members.

In connection with the appointment of Mr. Sewell as President, he will be granted 1,195,000 RSUs, subject to vesting and performance requirements and 300,000 stock options, bearing an exercise price of $1.18.  The stock options will expire five years from the date of grant and will vest in four equal tranches over the next four years.