Conrad secures juicy Indonesian gas discoveries with plenty of upside
Conrad Asia has expanded its gas footprint in Indonesia after it was confirmed as the winning bidder for two production sharing contracts offshore Aceh.
As previously noted, the company had the right to match the bidding process for both the Offshore North West Aceh (ONWA) and Offshore South West Aceh (OSWA) PSCs after conducting joint technical studies over the past four years.
Where it gets really exciting for Conrad Asia Energy (ASX:CRD) is that the both PSCs have existing discoveries that were made in the 1970s but never developed despite flowing gas to surface at potentially commercial rates due to low prices and poor regional demand at the time.
Neither of those factors are playing a major role in the market these days, presenting the company with a potentially rapid path towards commercialisation.
“The award of these two 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,” managing director Miltos Xynogalas said.
“Conrad’s initial scoping study of gas markets in the region has been positive and we are optimistic of commercialising these discoveries.
“The potential upside for Conrad is the exploratory opportunity in the deep water, where we have already identified a host of high impact gas plays.
“These are potentially each multi trillion cubic feet in size, with gas chimneys and flat spots, indicating evidence of hydrocarbons. Our best leads are in 1,000 metres of water which by global standards is not deep.”
He added that the company has a 100% interest in both PSCs and will seek partners to join its exploration efforts.
Conrad was first granted the two joint study areas offshore Aceh in 2018 before the Indonesian Government subsequently offered them under the Indonesia Petroleum Bidding Round (IPBR) 2022 first licensing round.
Due to the deep-water environment and the lack of exploration in large parts of each block, notwithstanding the existing discoveries in the shallow water, the blocks are deemed by the Indonesian authorities as “frontier” with corresponding fiscal arrangements which are attractive and favourable compared to other Indonesian PSCs.
The company added that recent seismic surveys have delineated leads with multi TCF potential.
Existing gas discoveries are located in water depths of less than 100m, located within pinnacle reefs, and Conrad has already identified another seven leads to mature for future drilling.
While historical success rates using older 2D seismic resulted in a 35% success rate, the company plans to acquire 3D seismic data in the most prospective areas, where it expects to achieve higher exploratory success rates, further de-risking the exploration potential.
ONWA covers 9,182km2 and contains the Meulaboh-1 and Meulaboh East-1 gas discovery wells while the 10,700km2 OSWA block contains the Singkel-1 gas accumulation.
These discoveries have all been successfully flow tested at commercial rates and are close to shore, offering the company near-term, low-cost commercialisation opportunities.
This article was developed in collaboration with Conrad Asia Energy, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.