NG Energy International : Management Discussion and Analysis - Q3

NG ENERGY INTERNATIONAL CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

The following is management's discussion and analysis ("MD&A") of the operating and financial results of NG Energy International Corp. ("NG" or the "Company"), formerly CruzSur Energy Corp., for the three and nine months ended September 30, 2021, as well as information and expectations concerning NG's outlook based on currently available information.

This MD&A should be read in conjunction with NG's interim condensed consolidated financial statements for the three and nine months ended September 30, 2021 as well as the audited annual consolidated financial statements for the year ended December 31, 2020 (collectively, the "Financial Statements") prepared in accordance with International Financial Reporting Standards ("IFRS," as defined below), together with the accompanying notes.

This MD&A contains forward‐looking information about our current expectations, estimates, projections and assumptions. See the reader advisory for information on the risk factors that could cause actual results to differ materially and the assumptions underlying our forward‐looking information. Additional information on the Company, its financial statements, this MD&A and other factors that could affect NG's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

All dollar values are expressed in US dollars, unless otherwise indicated, and are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standard Board ("IASB").

This MD&A is prepared as of November 24, 2021.

Non‐GAAP Measures

Certain financial measures in this document may not have a standardized meaning as prescribed by IFRS, and therefore are considered non‐GAAP measures. These measures may not be comparable to similar measures presented by other issuers. These measures have been described and presented in order to provide shareholders and potential investors with additional measures for analyzing our ability to generate funds to finance our operations and information regarding our liquidity. The additional information should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. The definition and reconciliation of each non‐GAAP measure is presented in the Operating Results, Financial Results and Liquidity and Capital Resources sections of this MD&A.

CORPORATE OVERVIEW AND UPDATE

NG is an oil and gas company incorporated in Canada and is engaged in the acquisition, exploration, development, and exploitation of oil and natural gas assets in Colombia. The Company's current asset portfolio is comprised of one appraisal and two exploration natural gas assets in Colombia. Assets previously held in Argentina were disposed of in October 2020 (see below). NG's common shares are listed on the TSX Venture Exchange ("TSX‐V") under the symbol "GASX".

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Non‐brokered Private Placement

In October 2021, the Company closed a non‐brokered placement of 8,000,000 units, at a price of C$1.00 per unit, for gross proceeds of $8,000,000 Canadian Dollars ("C$"). Each unit consists of one common share and one share purchase warrant entitling the holder to purchase one additional share at a price of C$1.20 for a period of 24 months from the date of issuance, expiring on October 22, 2023, and are subject to potential accelerated expiry in the event the closing price of the common share of the Company on the TSX‐V is equal to or exceeds C$2.00 for twenty consecutive trading days.

In connection with the completion of the placement, the Company has paid a C$6,000 cash commission and issued an aggregate 141,600 units, on the same terms as those issued in the financing to eligible parties who introduced subscribers.

Bought Deal Financing

In February 2021, the Company closed a bought deal private placement, pursuant to which a syndicate of underwriters purchased 7,400,000 units and exercised its option to purchase an additional 1,110,000 units, an aggregate of 8,510,000 units at a price of C$1.15 per unit for aggregate gross proceeds to the Company of $7,712,586 (C$9,786,500). Each unit consists of one common share of the Company and one‐ half of one common share purchase warrant, with each whole warrant entitling the holder to purchase one common share at a price of C$1.75 until February 10, 2024.

In connection with the offering, the underwriters received a cash commission equal to 6% of the gross proceeds raised and 510,600 non‐transferable broker warrants equal to 6.0% of the aggregate number of units sold. Each broker warrant is exercisable into one common share at a price of C$1.15 per share for a period of 36 months from the closing of the financing. The net proceeds of the Offering will be used for working capital and general corporate purposes.

Repayment of Maria Conchita Loan by way of Non‐Brokered Private Placement

In parallel with the aforementioned bought deal financing, the Company completed a non‐brokered private placement offering of 429,300 units, on the same terms as those issued pursuant to the bought deal financing, for a deemed value of $388,452 (C$493,695). No fees or commissions were paid to the underwriters in connection with the private placement. The issuance of these units was completed as repayment of the outstanding balance of the Maria Conchita Loan of $350,000 plus accrued interest. Of the units issued, 224,500 units were indirectly acquired by two of the Company's directors.

Settlement of services for shares

In February 2021, pursuant to a Memorandum of Understanding with Panacol Oil and Gas Corp. ("Panacol"), the Company issued an aggregate of 4,000,000 common shares at a deemed price of C$1.49 per share. 2,800,000 common shares were issued in satisfaction of project management services provided by Panacol and 1,200,000 common shares to Landsons Investment Corporation for services provided towards obtaining the environmental and social licenses for the SN‐9 project.

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Appointment of New Directors

In July 2021, the Company announced the appointment of D. Jeffrey Harder and Humberto Calderton Berti as directors of the Company. At the same time, the Company announced the resignation of Mr. Frank Giustra as a director of the Company.

COVID‐19 Pandemic

More than a year after being declared a global pandemic by the World Health Organization in March 2020, COVID‐19 continues to impact global economic conditions. Global financial markets, and commodity prices in particular, have experienced significant volatility and uncertainty. The crisis has caused periodic delays in the Company's Colombian exploration activities planned due to temporary restrictions on exploration activities implemented by the Colombian government. The scale and duration of these developments remain uncertain but could impact the Company's operations, future net earnings, cash flows and financial condition.

Disposition of Alianza

In October 2020, the Company announced the acceptance of an offer to sell Alianza Petrolera Argentina S.A. ("Alianza"), the Argentine subsidiary through which NG operated the SRDE Asset and held interest in the Mariposa Asset.

Under the terms of the offer, the purchaser acquired Alianza and assumed all rights and responsibilities relating to the oil and gas assets and general operations of Alianza. As consideration, the purchaser granted a royalty of 7% to the Company calculated on the net profit of oil production from the SRDE Asset, after applicable royalties and operating costs, up to total royalty payments of $100,000. The transaction also included the assumption by the purchaser of all responsibilities for any existing and future liabilities as well as a guarantee of indemnity for potential claims against NG and its related companies.

COLOMBIAN OIL AND NATURAL GAS PROPERTIES

NG has working interests in the Maria Conchita Block, the SN‐9 Block, and the Tiburon Block. Below is a detailed description of each block:

Maria Conchita Block

The Maria Conchita Block is located in the Department of La Guajira, Colombia, and neighbors the Chuchupa Block to its north, which is one of Colombia's largest gas fields with an initial 900 mmboe in place and currently accounts for approximately 40% of Colombia's daily natural gas output. The Chuchupa Block has been under production for over 35 years, operated by Chevron in association with Ecopetrol, S.A. Production from the Chuchupa Block has been decreasing over the last several years, creating a need for new natural gas discoveries to replace it. The Maria Conchita Block is in close proximity to both of Colombia's gas trunk lines, Transportadora de Gas Internacional ("TGI") and Promigas.

The E&P Contract for the Maria Conchita Block (the "Maria Conchita E&P Contract") is a 2009 contract between the Agencia Nacional de Hidrocarburos ("ANH") of Colombia and MKMS Enerji Sucursal Colombia ("MKMS"), a wholly‐owned subsidiary of NG, for the exploration and production of conventional

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hydrocarbons in the Maria Conchita area. The Company maintains an 80% working interest in the Maria Conchita Block with 20% being held by private joint operation partners. The Maria Conchita E&P Contract had an initial exploration term consisting of 6 one‐year exploration phases, that are followed by a 24‐year production period from the date when commerciality is declared. Phase 1 was completed with the acquisition, processing and interpretation of 120 km2 of 3D seismic. The Phase 2 commitment was fulfilled with the drilling of the Istanbul‐1 well (see below). In late 2018, NG notified the ANH of its intention not to proceed to Phase 3 of the exploration program and to relinquish the areas of the Maria Conchita Block not covered by the ongoing Evaluation Program. The Maria Conchita Block originally covered an area of approximately 60,076 acres. Subsequent to the relinquishment, the Company maintains 32,518 acres under the Evaluation Program.

Reserves Analysis

In March 2021, the Company announced the results of the year end 2020 reserve report for the Maria Conchita Block prepared by Petrotech Engineering Ltd. The results of this resource analysis defined a total of six prospects by using 3D seismic data and geobody mapping to detect the gas accumulation in the Miocene sands and one limestone section within the Aruchara and Tinka areas of the Maria Conchita Block with a confirmation of the best estimate Prospective Resources of 194.9 Bcf and 2P Reserves of 34.6 Bcf, exceeding management expectations and confirming the possibility to produce high gas volumes from the block. The Company decided to push towards initial production from the Aruchara‐1 well at Maria Conchita, re‐enter and test the Istanbul‐1 well and receive final environmental approvals. The Company currently has net 27.7 Bcf of gas and 5 Mbbl of condensate of proved and probable undeveloped reserves (from gross 34.6 Bcf of gas) in the Maria Conchita Block. Once the evaluation studies have been completed and the field has been declared commercial, further studies will be performed related to extensive tests in the field for other possible re‐entries and new wells to be drilled as part of a possible development plan.

Current Objectives

The Company's primary focus is establishing the necessary infrastructure to connect the Aruchara‐1 well to the nearby main gas line by late 2021, with the objective of monetizing its natural gas resources, capitalizing on a premium pricing market in Colombia of over $5/MMBtu. In December 2020, the Company announced that it had entered into a Memorandum of Understanding (the "MOU") with GTX International Corp. ("GTX") pursuant to which GTX is to build and operate the production facilities and pipeline (the "Pipeline Facilities") that will extend from the Company's Maria Conchita field in Colombia to existing national gas transportation infrastructure. GTX completed a brokered offering of $10 million of senior‐ secured debentures (the "Debentures") that bear interest at a rate of 15% per annum, payable monthly and which mature six years from the issuance date. GTX's financing provides the necessary funding to build the infrastructure needed to begin delivering gas to the market, with expectations to commence in 2021. GTX will build, own, operate and maintain the Pipeline Facilities, which will have a capacity of 20 mmcf/d. Additionally, the MOU provides that the Company and GTX will enter into a take‐or‐pay agreement (the "ToP Agreement") pursuant to which NG will agree to transport, or pay for, 16 mmcf/d through the Pipeline Facilities for a period of six years (the "Guaranteed Commitment") at a tariff of $0.90 per thousand cubic feet (kcf) of gas. The ToP Agreement will have a term of 18 years and the Company's Guaranteed Commitment will convert after six years into payment for only the capacity that is used.

Despite delays due to the COVID‐19 pandemic and the difficulties of mobilization on Colombian roads because of the social unrest and blockades that the country is experiencing, construction of the Pipeline

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Facilities continues forward. The construction of the remaining gas pipeline to the platform will be installed once the procedures for prior consultation with the local communities are completed, which have suffered delays due to the social circumstances that currently surround indigenous communities in Colombia. Furthermore, NG consultants continue to advance the studies and procedures required by Colombian government agencies to begin the production phase of the Aruchara‐1 well. Once all permits have been obtained and the construction of the facilities has been completed, gas production should begin in late 2021.

Exploration Activities

The current Evaluation Program for the Maria Conchita Block consists of geological and geophysical studies and an evaluation of re‐entries on the existing wells and will expire in March 2022 with the option to present a development plan of the field later during the 2022 year. In early 2021, the Company decided to complete a feasibility study on the covered Istanbul‐1 well prospective area, evaluating the following aspects: condition of environmental licensing, social aspects of the area of direct influence of the project, mechanical integrity, integral costs of intervention and new wells to be drilled to sustain a production capacity close to 20 mmcf/d. Based on the results of this study, in May 2021, the Company re‐entered the Istanbul‐1 well and preliminary testing in several zones encountered gas that was tested for flow rates. The purpose of the re‐entry of the Istanbul‐1 well was to repair wellbore damage, evaluate the potential extension of the Aruchara‐1 well producing zones, and define the production potential of new identified gas zones.

The existence of gas was tested in all the evaluated zones, with presence of water, and it was established that the intervals 8,396 to 8,416 feet and 8,426 to 8,438 feet present good gas production potential, expanding the prospects of the area. Based on the above, it was decided by management to complete the well temporarily, while identifying the best procedure to prevent water from influencing gas production. With this objective, existing technologies are being analyzed and the best mechanism is being defined to put the well into continuous production as soon as possible. NG has engaged professional consultants to design the re‐entry (without rig) of the Istanbul‐1 well and deploy de‐watering capillary technology to deal with water that exists downhole. The Company and its contractors are in the final stages of defining procedures for a ten‐day program, including all required governmental approvals, and anticipate completion before the end of the year. The objectives of the program are designed to determine the effectiveness of the technology to remove water and to estimate the real capacity and potential of the gas production from the well without the liquid load. The Company is advancing conversations to begin selling the gas production from the field following assembly of all GTX production facilities. This production would be transported via truck ahead of the pipeline being completed. The Company is also in the process of signing an agreement with TGI for the tie‐in of the Maria Conchita pipeline, enabling the Company to transport the gas produced from the Aruchara‐1 well and subsequent wells in the Maria Conchita Block through TGI's main pipeline and sell it in central consumption centers within Colombia. The remaining flow lines are expected to be laid and tied into the TGI main line by the end of the year.

The Istanbul‐1 well re‐entry is part of the ongoing evaluation program of the Maria Conchita field after the successful re‐entry in the Aruchara‐1 well (drilled by Texaco in 1980) and on the recent geological evaluation of prospective resources as required by the ANH. The re‐entry of the Aruchara‐1 well was completed in August 2020 as a result of implementing the work program approved by the ANH to 1) repair a gas leak detected during 2020 which was duly reported to the National Authority of Environmental Licences ("ANLA"), and 2) confirm the gas accumulation tested in the year 1980. After drilling the cement

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