TIDMCORO
RNS Number : 1415M
Coro Energy PLC
12 September 2023
12 September 2023
Coro Energy Plc
("Coro" or the "Company")
Gas Sales Agreement Heads signed for the Mako Gas Field
Coro Energy PLC, the South East Asian energy company with a
natural gas and clean energy portfolio, announces that the operator
of the Duyung PSC has signed the non-binding Term Sheet with
Sembcorp Gas Pte. Ltd. for a long-term gas sales agreement for the
Mako gas field. Critically, the Term Sheet has been endorsed by the
Indonesian petroleum upstream regulator (SKK Migas).
The Mako gas field was discovered in 2016, and since that time
the resource has been delineated through successful appraisal
drilling. It received formal approval from the Government of
Indonesia for the revised Plan of Development in late 2022. Coro
has a 15% participating interest in the Duyung PSC.
The Term Sheet relates to the sale of Mako gas from start of
production until 2037 for a total sales gas volume (100%) of c 293
Bcf with the potential to increase to c 392 Bcf. Gas sales will be
priced against Brent oil.
Further details of the gas sales agreement will be released to
the market once the agreement is executed.
The parties will now focus on finalising a definitive gas sales
agreement.
An extract of the Operator announcement has been included
below.
Change of Name of Nominated Adviser
The Company also announces that its Nominated Adviser has
changed its name to Cavendish Securities plc following completion
of its own corporate merger.
James Parsons, Chairman, commented:
"I am delighted to have now secured the GSA Heads at the Duyung
PSC, approved by the buyer and, critically, endorsed by the
Indonesian authorities.
This is a critical step in the commercial de-risking of our
project, positioning us perfectly for bids from the operator's
farm-out process, which we expect to play out shortly."
For further information please contact:
Coro Energy plc Via Vigo Consulting Ltd
James Parsons, Executive Chairman
Ewen Ainsworth, Chief Financial Officer
Cavendish Securities plc (Nominated Tel: 44 (0) 20 7220 0500
Adviser)
Adrian Hadden
Ben Jeynes
Vigo Consulting (IR/PR Advisor) Tel: 44 (0)20 7390 0230
Patrick d'Ancona
Finlay Thomson
WH Ireland (Broker) Tel: 44 (0)20 7220 1670 / 44
Harry Ansell (0)113 946 618
Katy Mitchell
Gneiss Energy Limited (Financial Advisor) Tel: 44 (0)20 3983 9263
Jon Fitzpatrick
Doug Rycroft
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation 596/2014 which is
part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended and supplemented from time to time. Upon the
publication of this announcement, this inside information is now
considered to be in the public domain.
The extract of the Operators announcement is as follows:
Subsequent to the end of the reporting period, Conrad signed a
non-binding Term Sheet with SembCorp Gas Pte Ltd. (a Singapore
based major gas and generating utility) which outlines the core
terms and framework as the basis for negotiating of a final binding
Gas Sales Agreement. The parties to the Term Sheet have also agreed
to negotiate, in good faith, a definitive Gas Sales Agreement by
31st December 2023. This date aligns with our targeted date for a
Final Investment Decision for the Mako Project.
The Term Sheet and the framework of included terms have now been
endorsed by the Indonesian petroleum upstream regulator (SKK
Migas). The final Gas Sales Agreement will be subject to approval
by the Minister of Energy and Mineral Resources, SKK Migas, any
other requisite government approvals and other customary conditions
precedent.
The key terms of the Term Sheet relate to the sale of Mako gas
from start of production to the end of the Duyung PSC in 2037, for
a total sales gas volume of 293 Tbtu (c 293 Bcf) with potential
increase to 392 Tbtu (c 392 Bcf) i.e. 71% and up to 95% of the
field's estimated 2C Contingent Resources of 413 Bcf (100%) as
assessed by GaffneyCline Associates (26 August 2022). Gas sales
will be priced against Brent oil.
Conrad will keep the market informed on the outcome of the Term
Sheet as and when it is in a position to do so.
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.
GaffneyCline Associates conducted an independent assessment of
the field and estimates that Mako contains gross field 2C
Contingent Resources of 413 Bcf (100%), with 215 Bcf of 2C
Contingent Resources attributable to Conrad under its Participating
Interest in Duyung (26 August 2022) as outlined in the Company's
IPO prospectus dated 9 September 2022.
Gas sales agreement negotiations have been a focus of the Board
and management of Conrad with tripartite engagements held between
Conrad, a major gas buyer, and SKK Migas. The negotiation of key
terms is now expected to be finalised during the Q3 CY2023. The
continued GSA negotiations will allow the Company to take advantage
of an improved and favourable pricing environment given strong
worldwide gas demand. Discussions with an Indonesian buyer are also
ongoing and depending on the availability of a physical connection
to the domestic market, a portion of the gas may be sold to
Indonesia or the entire quantity may be exported.
Front end engineering design ("FEED") studies were initiated
during Q4 CY2022. Three separate FEED studies are being progressed
for: the mobile offshore production unit ("MOPU") processing
facilities; the subsea umbilicals, risers and flowlines ("SURF");
and, for the conductor support frame ("CSF"). The MOPU processing
and the SURF FEEDs have been completed. The CSF FEED will conclude
in Q3 CY2023. The results of this work are now being integrated and
discussed with SKK Migas.
A geophysical pipeline route survey and a remote operated
vehicle survey of the production manifold in the adjacent Kakap PSC
(through which Conrad intends to export the Mako gas to the West
Natuna Transportation System) have been completed without incident.
A geotechnical survey of the MOPU location and potential well
locations is scheduled over the next few months. Project
optimisation discussions (e.g. precise placement of wells and
facilities in light of the geophysical and geotechnical surveys)
are ongoing with SKK Migas. The procurement process for all major
project equipment and services contracts commenced in Q2
CY2023.
Acquisition of environmental approvals for development is
ongoing. The Government of Indonesia requires environmental permits
for drilling or construction activities within the country.
Included within the required permits is the project Environmental
Impact Assessment (termed "AMDAL" in Indonesia). The Mako project
AMDAL has been submitted to the government for review with approval
expected before the end of the year.
Updated capital and operating costs for the Mako Gas Field
development project will be provided following on-going engineering
work and ongoing procurement activities.
A farm-down process for the divestment of a portion of Conrad's
interest in the Duyung PSC is ongoing with bids expected to be
received soon. Conrad has engaged a global investment bank with a
proven track record in similar transactions to lead the farm-down
process.
Conrad had previously commissioned three studies for the Mako
project namely, a climate change risk assessment a biodiversity
& critical habitat risk assessment and a human rights impact
assessment. The former two studies have been completed (with no
significant impactful findings) and the latter study will be
finalised in early 3Q CY2023. The studies aim to provide
independent adjuncts to the project environmental approval process
required by Indonesian regulations (described above).
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END
UPDSFWSIEEDSELU
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