Maurel & Prom to acquire 40% stake in Colombia’s Sinu-9 gas licence

Etablissements Maurel & Prom S.A. (M&P), a prominent independent oil and gas company, has signed a letter of intent to acquire a 40% operated working interest in the Sinu-9 gas licence in Colombia. Valued at $150 million and set to close on February 1, 2025, the acquisition represents a crucial milestone in M&P’s strategy to expand operations in Latin America while addressing Colombia’s critical natural gas shortfall.

How Will Maurel & Prom’s Investment Impact Colombia’s Energy Market?

The Sinu-9 gas block, located in the prolific Sinu San Jacinto basin near Colombia’s Caribbean coast, is set to play a key role in the country’s energy future. Colombia’s natural gas market faces a 30% supply deficit projected by 2026, with high demand driven by urban and industrial growth. M&P’s acquisition aligns with these market needs, as the block provides access to proven gas reserves and operational infrastructure.

As of December 31, 2023, Sinu-9 boasts gross proven and probable (2P) reserves of 158.8 billion cubic feet (bcf) and possible (3P) reserves of 340.8 bcf. Net to M&P’s 40% stake, the reserves total 63.5 bcf (2P) and 136.3 bcf (3P), demonstrating substantial production potential. With first gas already achieved in November 2024, the asset is positioned to deliver immediate value to Maurel & Prom while supporting Colombia’s energy needs.

What Makes the Sinu-9 Gas Block a Strategic Asset?

Sinu-9 is a high-potential gas block spanning 1,260 square kilometres in the Lower Magdalena Valley. Its proximity to established infrastructure, including the Promigas pipeline and the Jobo connection point, ensures seamless distribution of natural gas to Colombia’s industrial and urban centres.

The block currently supports gross production of 40 million cubic feet per day (mmcfd), translating to 16 mmcfd net to M&P’s interest. Future development plans aim to significantly enhance production levels, with multiple leads and prospects ready for drilling within the next 18 months.

Additionally, the asset is fully permitted, with environmental clearance from Colombia’s National Authority of Environmental Licences (ANLA) for 22 wells across 11 locations. This regulatory approval paves the way for accelerated exploration and development activities, positioning Maurel & Prom to maximise the block’s potential.

Why Is Maurel & Prom Returning as an Operator in Colombia?

Maurel & Prom has a long-standing presence in Colombia, with over 20 years of operational experience in the region. This transaction marks the company’s return as an operator of producing assets, leveraging its expertise to unlock value in a stable, OECD-regulated energy market.

CEO Olivier de Langavant emphasised the strategic importance of the acquisition, stating: “Sinu-9 offers a unique opportunity to apply our operational capabilities in a prolific basin with proven reserves and significant growth potential. This acquisition strengthens our commitment to Colombia and positions M&P as a key contributor to its energy security.”

Historically, Maurel & Prom has invested nearly $1 billion in Colombia, yielding strong returns and establishing the region as a cornerstone of its global operations. This new acquisition complements the company’s existing portfolio across Africa and Latin America, diversifying its revenue streams while reducing reliance on Brent-linked pricing.

What Challenges and Opportunities Lie Ahead for Colombia’s Gas Market?

Colombia’s natural gas sector is at a critical juncture. Declining production from mature fields and limited new developments have created a structural supply shortfall. Spot prices for domestic gas exceeded $8 per mmBtu in late 2024, reflecting the country’s heavy reliance on liquefied natural gas imports and offshore development projects with high costs.

Sinu-9 represents a cost-effective alternative to these challenges, offering locally sourced natural gas with significant scalability. The block’s location in a prolific basin with geological continuities enhances its appeal, as does its potential to attract further investment into Colombia’s energy sector.

What Are the Financial Terms of the Acquisition?

The $150 million transaction will be fully funded through M&P’s existing cash reserves and available credit facilities, which stood at $260 million as of December 31, 2024. The agreement includes a 12-month option for Maurel & Prom to acquire an additional 5% working interest from NG Energy for $18.75 million under the same terms.

Closing of the transaction is contingent upon regulatory approvals, including clearance from Colombia’s National Hydrocarbons Agency (ANH), as well as the execution of a definitive agreement.

A Transformative Move for Maurel & Prom and Colombia’s Energy Sector

M&P’s acquisition of a 40% stake in Sinu-9 underscores its commitment to strengthening its presence in Colombia while addressing the country’s pressing energy needs. By leveraging its operational expertise and investing in proven reserves, M&P is poised to play a pivotal role in stabilising Colombia’s natural gas supply.

As Colombia grapples with growing energy demand and rising gas prices, Sinu-9 offers a timely and scalable solution. This transaction not only marks a new chapter for Maurel & Prom but also highlights the strategic importance of localised gas production in ensuring energy security.