Conrad Asia Energy, the ASX-listed Asia-focused natural gas exploration and development company, has provided an overview of activities for the period ending 31 March 2023.
Highlights
- Front End Engineering Design ('FEED') studies for the Mako development project is progressing and on schedule.
- Negotiation of the key terms of the Mako gas sales agreement between a Singapore buyer and the Indonesian regulator (SKK Migas) is expected to be finalised during the June quarter, with the Mako gas field being an important strategic gas asset for both countries.
- The Mako gas field is the largest undeveloped and fully appraised gas field in the West Natuna Basin. Gas is exported from the basin by pipeline to Singapore. The Competent Person Report commissioned as part of the IPO late last year estimated the Mako gas field would generate gas sales of approximately US$2.4 billion net to Conrad.
- Conrad has engaged a global investment bank with a proven track record in similar transactions has been engaged to lead a farm-down process for the divestment of a portion of Conrad’s interest in the Duyung Production Sharing Contract ('PSC'). Bids are expected to be received during the June quarter and the industry response to date has been encouraging.
- Conrad signed two new PSCs, Offshore North West Aceh (Meulaboh) ('ONWA') and Offshore South West Aceh (Singkil) ('OSWA').
- The Aceh PSCs are expected to increase the company’s resource base and add projects with future growth potential. In aggregate, the two Aceh PSCs cover some 22,000 km2 in both shallow- and deep-water areas.
- As the shallow-water areas of ONWA & OSWA contain numerous flow-tested gas discoveries, the Company has commissioned a Competent Persons Report to independently assess the size and value these resources. This is expected to be finalised in June.
- The deep-water areas of ONWA & OSWA hold multi Tcf exploration potential and the Company has delineated several large structures and has initiated a mapping exercise to assess and create an inventory of leads and prospects across the area.
Conrad Managing Director and Chief Executive Officer, Miltos Xynogalas, commented:
'The first quarter has been another important period for the Company, with two new Production Sharing Contracts, as well as the continued advancement of the FEED studies and gas sales negotiations for Mako. We are expecting the terms for the GSA to be finalised in during the second quarter.
In January, Conrad was awarded two PSCs which was a transformational event for the Company, with these blocks containing discoveries that are expected to significantly increase our resource base and provide Conrad the opportunity to add several gas projects to its existing large Mako gas project. We continued to advance the Front-End Engineering Design (“FEED”) studies or the Mako development project, with three separate studies being initiated during Q4 2022. All studies are progressing on schedule.
The Competent Persons Report on the two Aceh PSCs will be completed by June. We expect the report to underscore the importance of these assets. I would like to thank shareholders for their ongoing support to date as we look forward to an exciting period to come.'
Duyung PSC - Mako Gas Field 76.5% Participating Interest, Operator
Conrad holds a 76.5% operated interest in the Duyung PSC via its wholly owned subsidiary, West Natuna Exploration Limited. Duyung is located in the Riau Islands Province, Indonesian waters in the West Natuna area, approximately 100 kilometres to the north of Matak Island and about 400 kilometres northeast of Singapore.
Gas sales agreement (“GSA”) negotiations have been a focus of the Board and management of Conrad with tripartite engagements held between Conrad, a Singapore gas buyer, and SKK Migas (the Indonesian regulator). The negotiation of key terms is expected to be finalised during Q2 CY2023. The continued GSA negotiations will allow the Company to take advantage of an improved and favourable pricing environment given strong worldwide gas demand and low supply.
Front End Engineering Design (“FEED”) studies were initiated during Q4 2022, with three separate FEED studies currently being progressed for the Mobile Offshore Production Unit processing facilities; the Subsea Umbilicals, Risers and Flowlines; and for the Conductor Support Frame. A geophysical pipeline route survey has commenced and the FEED studies and survey will be completed by Q2 CY2023.
The process to acquire environmental approvals for development is ongoing. The Government of Indonesia requires certain environmental permits for any company to conduct any drilling or construction activities within the country. Baseline surveys are planned to be acquired during early Q2 2023 and the approval process is expected to conclude during Q3 CY2023.
Aceh PSCs 100% Participating Interest, Operator
Conrad was awarded two new PSCs, Offshore North West Aceh (Meulaboh) and Offshore South West Aceh (Singkil) during the Quarter. The PSCs are operated by wholly owned Conrad subsidiaries ONWA PTE Ltd and OSWA PTE Ltd. Conrad holds a 100% participating interest in each block, with each PSC having a 30-year tenure.
Both PSCs contain flow-tested gas discoveries in shallow water that were made in the 1970s. The Company has engaged an independent reserve engineering firm to produce Competent Persons Reports to determine potential contingent resources for these discoveries. Conrad anticipates that the reports will be issued during the second quarter.
BPMA, the Aceh regulator, has approved Conrad’s proposed CY2023 work program and budget, which are in accordance the PSC Year 1 work obligations. The work program comprises mainly inhouse studies intended to generate a comprehensive geological evaluation for both PSCs and will provide the basis for future activities in the areas. Additionally, the Company will perform an Environmental Baseline Assessment for each PSC. Conrad continues its efforts to establish a representative office in Banda Aceh as per the obligations to the local government and has initiated a stakeholder assessment of the PSC areas.
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Source: Conrad Asia Energy
