31 January 2024
Coro Energy
Plc
("Coro"
or the "Company" and together with its subsidiaries the
"Group")
Update re Duyung
PSC
Coro Energy PLC, the South East
Asian energy company with a natural gas and clean energy portfolio,
notes the announcement released by Conrad Asia Energy Ltd ("Conrad"
or the "Operator"), the holder of a 76.5% operated interest in the
Duyung Production Sharing Contract (PSC), offshore Indonesia, in
which the Group has a 15% interest.
In its announcement, the Operator
provided an update in respect of, inter alia, activities in respect
of the Mako gas project within the Duyung PSC during the quarter
ended 31 December 2023. In doing so, the Operator has provided an
update on the expected capital costs of the Mako development
project and associated project timings.
An extract of the Operator's
announcement in respect of Duyung PSC developments is set out
below:
·
Considerable
progress has been made in maturing the Mako project during the past
months. The key developments include:
·
Front end
engineering design ("FEED") studies for the Mako development
project have concluded. Based on these studies (and the procurement
process to date), capital costs for Phase 1 are currently estimated
to be US$325 million based on a 100% participating interest, in
line with market trends. Capital expenditures to initial revenues
are currently estimated to be US$250 million (100%). Project costs
and expenditure scheduling are being further optimised to reduce
this amount. The planned development wells are targeted to deliver
120 mmscfd (100%) for a plateau period of seven
years.
·
In Q3 2023, the
Company signed a non-binding term sheet (the "Term Sheet") with
Sembcorp Gas Pte Ltd ("Sembcorp"), a major Singapore energy
company, which outlines the core terms and serves as the basis for
negotiating a definitive Gas Sales Agreement ("GSA"). Subsequent
commercial negotiation between the Minister of Mining and Natural
Resources and Sembcorp has resulted in both improved price formula
and a delay in executing the GSA, and accordingly, Conrad has
agreed with Sembcorp to delay the deadline to finalise a binding
GSA (which will be subject to customary conditions precedent) by
the end of Q2 2024.
·
During the
quarter, Conrad progressed the technical and commercial work with
the West Natuna Transportation System ("WNTS") Joint Venture and
with the support of SKK Migas to negotiate the commercial and legal
terms of access to the WNTS for the transportation of the Mako gas
to Singapore. Despite the good progress, delays have been
encountered and this has required a revision of the project
timeline and finalisation of the GSA.
·
While the
Company continues to strive to reach a Mako final investment
decision ("FID") at the earliest, on the current trajectory of
conclusion of the GSA and gas transportation agreement, FID would
be delayed until mid-2024. Production start-up would commensurately
slip until mid-2026.
·
The [Conrad]
Duyung farm down process is progressing. With the announcement of
the Term Sheet, as well as progress on all other facets of the
project, more parties have expressed interest in the Mako project.
The Company is engaging in confidential discussions with potential
partners regarding acquisition of a Participating Interest in the
Duyung PSC.
·
Conrad has
appointed a financial advisor to assist with the debt funding
portion of its share of the Mako project capital cost. Conrad has
received an indicative term-sheet from one of the potential lenders
to help fund Conrad's share of project costs. Lender selection and
completion of documentation are expected by
mid-2024.
James Parsons, Chairman, commented:
"The improved GSA price formula and optimised capital expenditures (with the introduction of
staged production start-up) underpin both the robust economics of
the Duyung PSC and the likely attractiveness of the project to debt
providers and potential farm in partners. We eagerly await the
outcome of the farm out process and in the meantime will continue
to progress the growth of our renewables portfolio at pace building
on our recent progress in both Vietnam and the
Philippines."
For further information please
contact:
Coro
Energy plc
James Parsons, Executive
Chairman
|
Via Vigo Consulting Ltd
|
Cavendish Capital Markets
Limited (Nominated
Adviser)
Adrian Hadden
Ben Jeynes
|
Tel: 44 (0)20 7220
0500
|
|
|
Hybridan LLP (Nominated Broker)
Claire Louise Noyce
|
Tel: 44 (0)20 3764
2341
|
|
|
Gneiss Energy Limited (Financial Advisor)
Jon Fitzpatrick
Doug Rycroft
|
Tel:
44 (0)20 3983 9263
|
Vigo
Consulting (IR/PR Advisor)
Patrick d'Ancona
Finlay Thomson
|
Tel: 44 (0)20 7390
0230
|
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.