Sunda Energy, the AIM-quoted exploration and appraisal company focused on gas assets in the Asia-Pacific region, has announced that its wholly owned subsidiary SundaGas Banda Unipessoal, Lda. ('SundaGas') has entered into a letter of intent with Finder TIMOR-LESTE B.V. to work together to secure a drilling rig for the two companies' drilling campaigns offshore Democratic Republic of Timor-Leste.
Background
SundaGas operates the TL-SO-19-16 Production Sharing Contract, in partnership with its government-owned joint venture partner TIMOR GAP Chuditch Unipessoal Lda. The PSC contains the Chuditch gas field where SundaGas plans to drill the Chuditch-2 appraisal well.
Finder is a wholly owned subsidiary of Finder Energy Holdings and operator of the Kuda Tasi and Jahal ('KTJ') fields, offshore Timor-Leste, also in partnership with TIMOR GAP. Finder is preparing to drill at least three wells as part of its development of the KTJ fields, on which it is planning to take a Final Investment Decision by mid-2026.
Letter of Intent for Drilling Collaboration
In the LOI, SundaGas and Finder agree to collaborate on a proposed combined Timor-Leste drilling campaign, including: (i) seeking to contract a mutually acceptable and technically suitable drilling rig for the KTJ and Chuditch-2 wells; (ii) seeking to align contracts for other necessary materials and services (as appropriate); (iii) coordinating to the extent possible on project management, planning and execution activities; and (iv) providing each other with the necessary support and information to efficiently and expeditiously execute the drilling campaign. The LOI will terminate on the earlier date of either a formal rig share agreement being executed by the parties or 31 October 2026, unless extended by mutual agreement. Either party has the right to terminate the LOI at any time.
Operational Plan
As the KTJ wells will be drilled in water depths of around 400m, Finder requires a semi-submersible rig (rather than a jack-up). However, many semi-submersible rigs can operate in shallower waters (Chuditch-2 location is around 65m), and indeed the original Chuditch-1 discovery was drilled with a semi-submersible unit by Shell. Finder is already advanced in its plans to secure a suitable semi-submersible rig which will be suitable for both locations.
Minor amendments to the well engineering design for Chuditch-2 will be required with a different rig type, and this work will commence shortly. Finder and SundaGas have also initiated discussions around project management and logistics planning.
Under the LOI, it is anticipated that Chuditch-2 drilling will be planned to commence as early as possible in 2027 subject to rig availability.
Rationale for Drilling Collaboration
Securing a rig to drill Chuditch-2 has proved challenging, largely due to the expected short duration (35 to 40 days) of the campaign, with no immediate follow-up work for the rig. The opportunity to share a rig with Finder, which plans to drill three development wells on KTJ, means a combined duration of operations of almost 200 days, making it a far more attractive proposition for contractors.
For both Sunda and Finder, the LOI is expected to provide the opportunity for significant operational synergies and savings, despite the changes to the operational plan for Sunda, including the use of a semi-submersible unit.
PSC Extension Request
Noting that KTJ wells are expected to be drilled in 2027, and given time required to prepare for the amended campaign, SundaGas has submitted a request on behalf of the Chuditch joint venture to upstream regulator Autoridade Nacional do Petróleo ('ANP') to extend the current contract period of the PSC (which expires on 18 June 2026) and ANP is currently considering that request.
Further updates regarding operational preparations for Chuditch-2 and the PSC will be provided in due course.
Dr Andy Butler, CEO of Sunda Energy, commented:
'I am delighted with the plans agreed with Finder to align our planned drilling activities with their KTJ development project. This collaborative initiative would create many potential synergies and help both parties effectively achieve their respective operational goals. Although this plan pushes back drilling of Chuditch-2 further from our earlier schedule of Q2 2026, the sharing of a drilling rig, along with certain materials and services, would considerably enhance the achievability of the project. I look forward to working closely with Finder on a shared drilling campaign and thank ANP and TIMOR GAP for their ongoing support of our shared efforts to develop Timor-Leste's offshore energy resources.'
Source: Sunda Energy
