Mr. Brian Paes-Braga reports

NG ENERGY ANNOUNCES THE SALE OF A 40% WORKING INTEREST IN SINU-9 FOR US$150 MILLION

NG Energy International Corp. has entered into a letter of intent with Etablissements Maurel & Prom SA, pursuant to which NG Energy will sell a 40-per-cent operating working interest in the Sinu-9 block to Maurel & Prom for total cash consideration of $150-million (U.S.), with an effective date of Feb. 1, 2025.

Highlights:

• NG Energy has entered into a letter of intent to sell a 40-per-cent operating working interest in Sinu-9 to Maurel & Prom for total cash consideration of $150-million (U.S.) (approximately $215-million).
• Maurel & Prom is a globally recognized upstream energy company headquartered in Paris, supported by its controlling shareholder, Pertamina, the state oil company of Indonesia, with almost two centuries of operating experience across Africa, Latin America and Europe.
• The transaction significantly derisks the development of Sinu-9, one of Colombia's largest onshore natural gas fields, by securing a strong, well-capitalized operating partner with a proven record in technical and operational excellence. This partnership accelerates the delivery of natural gas, a key resource in Colombia's energy transition strategy while ensuring the country's energy needs are met reliably over the long term.

Sinu-9 covers an area of approximately 311,353 acres in the department of Cordoba, Colombia, and is fully permitted with environmental approval granted by the National Authority of Environmental Licences to drill 22 wells from 11 locations. As of Dec. 31, 2023, Sinu-9 has:

• Company gross 1P reserves of 26.7 billion cubic feet (37.0 billion cubic feet project gross) of natural gas;
• Company gross 2P reserves of 114.36 billion cubic feet (158.8 billion cubic feet project gross) of natural gas;
• Company gross 3P reserves of 245.3 billion cubic feet (340.8 billion cubic feet project gross) of natural gas;
• Company gross unrisked best estimate contingent resources (development pending) of 130.billion cubic feet;
• Company gross unrisked best estimate prospective resources of 131.0 billion cubic feet.

Maurel & Prom will assume its proportional share of NG Energy's carry commitments related to Sinu-9 on closing of the transaction. M&P will have a 12-month option from closing of the transaction to increase its working interest by an additional 5 per cent for a cash payment of $18.75-million (U.S.).

Brian Paes-Braga, chairman and chief executive officer, commented: "Bringing on an operational partner such as Maurel & Prom at Sinu-9 is a game changer for NGE. It allows NGE to maintain a significant 32-per-cent stake in Sinu-9 while at the same time welcoming a distinguished operational partner with in-country expertise, which we expect will increase both speed and certainty in unlocking the full potential of this giant oil and gas field. This initiative demonstrates NGE's commitment to delivering long-term value creation for our shareholders through cost-effective acquisition, delineation and development of early-stage transition energy assets. The transaction puts NGE in an excellent position to advance the development of Maria Conchita while expediting the advancement of Sinu-9 into one of Colombia's largest natural gas fields. The transaction allows us to maintain exposure and unlock value from what we view as world-class assets in Colombia while providing cash proceeds to support our continued evaluation of opportunities, both domestically and internationally, in addition to providing a meaningful return to our shareholders in the near term."

Maurel & Prom is a global, publicly listed oil and gas exploration and production company headquartered in Paris with almost two centuries of operational history, including over 20 years as an oil and gas operator. M&P currently holds exploration and production interests in Latin America and Africa and has a strong technical and operating record in these jurisdictions. M&P is an arm's-length party to the company and is supported by its controlling shareholder, Pertamina, an Indonesian state-owned oil and natural gas corporation. Given M&P's current and outstanding cash position and undrawn portion of its credit facilities, NG Energy's board of directors and advisers have comfort in the financing of the transaction.

Mr. Paes-Braga continued: "Maurel & Prom is a world-class company, founded in the 1800s and supported by Pertamina, the state oil company of Indonesia. It is with great honour and excitement that NGE will be partnering with such a well-managed and operated business, which has an extensive track record of developing energy assets across the globe as well as deep experience in Colombia. We believe that this partnership will increase the pace of development of Sinu-9 as we welcome an international operational partner of this calibre to ensure that Colombians get the natural gas they need to continue to live and grow as a country."

Closing of the transaction is subject to negotiation and execution of a definitive agreement, the receipt of regulatory approvals (including the approval of the Agencia Nacional de Hidrocarburos), and the satisfaction of other customary closing conditions.

BofA Securities Inc. and Peters & Co. Ltd. are acting as lead financial advisers to NG Energy in connection with the transaction.

Wildeboer Dellelce LLP is acting as legal counsel to NG Energy in connection with the transaction.

Production guidance update

Maurel & Prom and NG Energy will be working collaboratively to determine the updated development plan for Sinu-9 for the fiscal year ending Dec. 31, 2025, which will be announced in conjunction with closing of the transaction; at that time, NG Energy will also be able to provide updated corporate guidance.

Sinu-9 testing and commissioning update

Following the company's press release dated Nov. 4, 2024, NG Energy has connected Brujo-1X and Magico-1X to Central Processing Facility 1 (CPF-1) at Sinu-9 and is encouraged by the production results from both wells, affirming better-than-expected productivity and strong reservoir performance. The results are summarized below:

• Brujo-1X DST-2 averaged 7.9 million cubic feet per day over 15 days at an average choke of 28/64ths inch; prior to closing the well, the company tested a choke of 40/64ths inch and reached production of 13.8 million cubic feet per day.
• Brujo-1X DST-4 averaged eight million cubic feet per day over five days at an average choke of 32/64ths inch.
• Magico-1X averaged 7.6 million cubic feet per day over five days at an average choke of 34/64ths inch.

During this initial production testing phase, it was determined that CPF-1 would require additional equipment to handle small amounts of condensates in order to ramp up production and realize the full potential of both Brujo-1X and Magico-1X. These field characteristics are not uncommon in Colombia, with examples such as La Creciente that have analogous molecule specifications. The company and its infrastructure partner have successfully acquired and assembled approximately 70 per cent of the necessary equipment at site and anticipate completing the installation, commissioning and ramp-up of production starting in early February. Ramp-up is expected to reach 10 million cubic feet per day during the month of February, with full production expected early Q2 as additional equipment arrives to site and wells are reopened.

Additionally, the company executed a take-or-pay arrangement on a mobile plant with its partner, Infraes, that will provide additional processing capacity, inclusive of the required equipment to handle the condensates, of up to an additional 10 million cubic feet per day. The mobile plant will bring total gas processing capacity at Sinu-9 to 50 million cubic feet per day upon completion of the activities described above.

Capital allocation strategy

The transaction, which allows NG Energy to capture immediately value on a portion of its working interest in Sinu-9, will enable NG Energy to provide shareholders with meaningful value. NG Energy intends to implement an updated capital allocation strategy upon closing of the transaction that will be a disciplined and balanced approach to invest in various growth opportunities, have the flexibility to potentially pursue the repurchase of its common shares, as well as potentially reward shareholders through dividends. NG Energy anticipates that further details surrounding the company's capital allocation strategy will be disclosed upon closing of the transaction.

About NG Energy International Corp.

NG Energy 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 developing countries, supporting energy transition and economic growth. NG Energy's team has extensive technical and capital markets expertise with a proven 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 (approximately $8 per million British thermal units) with projected triple-digit production growth over the next two to three years toward a production goal of 200 million cubic feet per day. The company expects to achieve a greater-than-150-per-cent increase in 2024 and has seen a 551-per-cent year-over-year increase in 3P reserves, a 314-per-cent year-over-year increase in 2P reserves and a 241-per-cent increase in 1P reserves. To date, over $100-million (U.S.) has been invested in the exploration and development of Sinu-9 and Maria Conchita with significant contributions from insiders who currently own approximately 32 per cent of the company.

We seek Safe Harbor.