Natural gas-focused company Conrad Asia Energy (ASX:CRD) reports it has signed Production Sharing Contracts (PSCs) for the North West Aceh (Meulaboh) and South West Aceh (Singkil) PSCs located offshore of the Aceh Province in Indonesia.
Under the PSCs the company will operate and hold a 100% participating interest in both blocks, which are consistent with its core strategy of developing assets with the potential to supply gas to the rapidly expanding South East Asia markets.
The company notes that the acquisition of the PSCs comes following the offering of both blocks under the Indonesian Petroleum Bidding Round (IBPR) 2022 first licensing round, in which Conrad Asia Energy submitted bids on 5 September 2022.
Due to the natural deep-water environment and the lack of exploration in large parts of each block, the blocks have been interpreted by the Indonesian Government as “frontier” with recent seismic surveys having delineated prospective leads that boast gas potential.
“The award of these 2 PSCs is a transformational event for Conrad”
Speaking on the licence acquisition, Conrad Asia Energy Chief Executive Officer (CEO) and Managing Director Miltos Xynogalas said: “The award of these 2 PSCs is a transformational event for Conrad as these blocks contain discoveries that ‘significantly’ increase our resource base and offer the opportunity for Conrad to add several gas projects to its existing large Mako gas project. Conrad’s initial scoping study of gas markets in the region has been positive and we are optimistic of commercialising these discoveries and delivering a portfolio of growth opportunities to our shareholders.
There is a ‘significant’ upside for Conrad in the exploratory opportunities that exist in both the shallow – and the deep-water areas, where we have already identified a host of high impact gas plays. Conrad has a 100% working interest in these blocks and will be seeking partners to participate in exploration efforts in these new years.
These blocks are consistent with our company strategy of being focused on gas in offshore locations within Asia, in order to build our gas portfolio in the region, with potential to supply gas to the rapidly growing markets in South East Asia.”
The company also notes that the total committed work program for each PSC stands at US$15 million, including the geological studies for 2023, 500km-square of 3D seismic acquisition for 2024 and the drilling of a well for 2025.
Costs of the 2023 commitments are expected to be funded from the company’s recent public offering on the ASX, while the costs for subsequent activities will be from various sources including farm-in partners following the maturing of the PSCs and commencement of cash flow from the Mako gas field.
Conrad Asia Energy is an ASX-listed natural gas explorer that is focused on natural gas within the shallow waters offshore of the southeast Asian country of Indonesia via its wholly-owned subsidiaries. The company specialises in the identification and acquisition of undervalued, overlooked and/or technically misunderstood gas assets.
With the PSCs now secured, Conrad Asia Energy announces that it intends to initiate independent prospectivity reviews of the deep-water exploration potential of the PSCs.
Images: Conrad Asia Energy Ltd