Etablissements Maurel & Prom (M&P) has announced its entry into a letter of intent with NG Energy International (NG Energy) to acquire a 40% operated working interest in the Sinu-9 gas licence in Colombia.
The proposed transaction is valued at $150m, effective from 1 February 2025. Both parties have committed to finalising a definitive agreement in alignment with the terms outlined in the letter of intent.
The Sinu-9 gas block is situated in the Lower Magdalena Valley, approximately 75km from Colombia’s Caribbean coast, covering an area of around 1,260 square kilometres in the Córdoba department.
Located within the Sinu San Jacinto basin, it is adjacent to gas-producing blocks operated by Canacol and Hocol. NG Energy is currently the operator of Sinu-9 and holds a 72% working interest, alongside Desarrolladora Oleum (15%), Clean Energy Resources (7.8%), and FG Oil & Gas (5.2%).
The block benefits from established infrastructure, including access to the Promigas pipeline, Colombia’s northern natural gas trunk line, via the Jobo connection point.
Sinu-9 commenced initial gas production in November 2024 under long-term testing of the Magico-1X and Brujo-1X wells. Existing infrastructure supports gross production capacity of up to 40 million cubic feet per day (mmcfd), with M&P’s proposed 40% stake corresponding to 16 mmcfd. Plans for further development aim to significantly expand production beyond these levels.
As of 31 December 2023, NG Energy reported gross 2P (proved and probable) reserves of 158.8 billion cubic feet (bcf) and 3P (proved, probable, and possible) reserves of 340.8 bcf. M&P’s 40% working interest would equate to 63.5 bcf of 2P reserves and 136.3 bcf of 3P reserves, according to an independent evaluation by Sproule International Limited.
Sinu-9 offers substantial exploration and appraisal potential within a prolific gas basin. Numerous leads and prospects are ready for drilling within the next 18 months, with the potential to significantly boost the resource base. The block has full environmental approval from Colombia’s National Authority of Environmental Licences (ANLA) to drill 22 wells across 11 locations.
Infrastructure for the initial development phase includes treatment and export facilities with a gross capacity of 40 mmcfd.
M&P has a history of successful operations in Colombia, where it has invested nearly $1 billion over the past two decades. This acquisition marks M&P’s return as an operator of producing assets in the country.
The $150m consideration for the acquisition will be financed using M&P’s existing cash reserves and credit facilities, which totalled $260m as of 31 December 2024.
Completion of the transaction is subject to the execution of a definitive agreement, regulatory approvals from the Colombian National Hydrocarbons Agency (ANH), and other standard closing conditions.
M&P will also have a 12-month option post-closing to acquire an additional 5% working interest in Sinu-9 from NG Energy for $18.75m, with the same effective date of 1 February 2025.
Hannam & Partners is acting as the exclusive financial advisor to M&P, while Herbert Smith Freehills, Torys, and Martínez Quintero Mendoza González Laguado & De La Rosa are providing legal counsel.
