Conrad Asia Energy, the ASX-listed Asia-focused natural gas exploration and development company, has provided an overview of activities for the period ending 30 September 2023.
Highlights
- Conrad signed a non-binding term sheet with Sembcorp Gas Pte Ltd, a wholly-owned subsidiary of Sembcorp Industries Ltd, Singapore’s leading power and energy utility. The Term Sheet outlines the core terms and serves as the basis for a definitive gas sales agreement ('GSA'), which parties have agreed to negotiate in good faith by 31st December 2023. This aligns with our target date for a final investment decision for the Mako project. These commercial terms bolster the development of Mako and support Conrad’s plan to sell down some of its 76.5% participating interest in the project.
- Two of the three front end engineering design ('FEED') studies for the Mako development project have been concluded and the third is on track for completion by mid-November 2023.
- The Duyung farm down process is ongoing, and with the announcement of the Term Sheet for the gas sales, more parties have expressed interest in the Mako project.
- Conrad has continued to identify and evaluate options for commercialisation of shallow-water gas discoveries in the recently acquired Offshore North West Aceh (Meulaboh) ('ONWA') and Offshore South West Aceh (Singkil) ('OSWA') Production Sharing Contracts ('PSCs'). A report prepared by THREE60 Energy completed in May this year, ascribes a net present value ('NPV') of US$88 million to the Aceh PSCs net to Conrad on its net attributable resources of 161 bcf in three of the four discoveries. The Company continues to build out the portfolio of leads and prospects in both the deep- and shallow-water areas of the Aceh PSCs. To this end, a detailed geotechnical study to assess and create an inventory of leads has been commissioned. This project is expected to be concluded by year end. The deeper water areas have several large structures with multi-trillion cubic feet of gas potential. Seismic studies over some of these structures show gas chimneys and flat spots, indicating the potential presence of hydrocarbons.
Conrad Managing Director and Chief Executive Officer, Miltos Xynogalas, commented: 'Conrad reached a significant milestone in the third quarter by signing the term sheet with Sembcorp Gas Pte Ltd for the sale of our gas to Singapore. The terms for sale of export gas were endorsed by SKK Migas, the Indonesian petroleum upstream regulator. Partnering with a major player in the Singapore energy and power sector and being entrusted by the Indonesian government to deliver on such an important project underscores Conrad’s credibility and solid position within the industry.
We expect to finalise the GSA within the next few months and target first gas during 2025.
We are extremely pleased with the progress in the Mako FEED. Tendering of major contracts is ongoing, from which will emerge a revised view of project costs. We are also excited about discoveries in the Aceh PSCs where we are evaluating commercialisation options and a high impact exploration portfolio. We expect to complete a detailed analysis of our prospects and leads portfolio and share the findings with our shareholders over the next few months.
The growing interest in the farm-down has been encouraging and takes us closer to our goal of becoming a leading gas producer in the fastest growing market in the world. The farm-down, the completion of the GSA and the FEEDs are on track to allow final investment decision within the next few months.'
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Source: Conrad Asia Energy
