• Institutional and sophisticated investors have oversubscribed for a $13m placement and an SPP which could deliver another $2m from retail investors
  • Proceeds ensure Conrad Asia Energy can continue to progress its Mako gas field towards production
  • Funds will also be used to complete a 3D seismic survey across the shallow water Aceh gas discoveries where Conrad is looking to fast track commercial opportunities for its four offshore gas discoveries

 

Special Report: Conrad Asia Energy is raising up to $15m to progress its Mako gas field towards production and fast-track commercial opportunities for its four offshore gas discoveries.

The company, which is chaired by former Oil Search managing director and AGL chairman Peter Botten, has a large inventory of gas development opportunities in Indonesia, any one of which could transform it into a major regional gas supplier.

While many of the richest opportunities are located with the Offshore North West Aceh (Meulaboh) and Offshore South West Aceh (Singkil) production sharing contracts (PSCs), Conrad Asia Energy’s (ASX:CRD) immediate focus is on the cornerstone Mako gas field in the 76.5% owned Duyung PSC.

Mako has a best estimate (2C) contingent resource of 413 billion cubic feet of gas that is matched with easy access to infrastructure, such as an existing West Natuna pipeline that carries gas from three third-party production facilities in the South Natuna Sea, near Indonesia, to an onshore receiving facility in Singapore.

It has been assessed to contain gas comprising 98% methane gas with insignificant impurities and a high permeability reservoir with excellent productive capability.

The company has already been awarded a plan of development for the field, completed front end engineering design, and key terms for a gas sales agreement with Sembcorp Gas and SKK Migas. Singapore relies on gas for 95% of its power needs and is scheduled to build four new gas fired power stations over the next two years.

Pipeline gas will deliver Singapore secure, inexpensive gas with a lower carbon emissions than LNG.

 

Funded for further progress

CRD has now received firm commitments from new and existing institutional and sophisticated investors for a $13m placement priced at 95c per CHESS Depositary Interest (CDI), with demand exceeding anticipated commitments for CDIs under the offer.

This represents a 13.5% discount the 10-day volume weighted average price (VWAP) of the company’s CDIs to 30 January 2024.

Proceeds from the placement will be used to complete a 3D seismic survey across the shallow water Aceh gas discoveries and continued project costs associated with the Mako gas project, as well as general working capital.

It ensures that CRD will remain well funded through a number of near-term goals designed to further de-risk the Mako gas project and progress other key initiatives.

These include finalising the gas sales agreement for Mako to supply gas to Singapore, concluding the Duyung PSC farm-down process, finalising project financing discussions, making a final investment decision for Mako, and maturing gas commercialisation initiatives in Aceh.

CRD will also be offered to eligible securityholders the opportunity to subscribe for a further $30,000 worth of new CDIs to raise up to a further $2m.

 

Firmly focused on finalising sale agreements

“We are delighted with the support we have received from new and existing institutional investors, who have demonstrated their confidence in our ability to meet key upcoming milestones that will help deliver the Mako development project,” CRD managing director Miltos Xynogalas said.

“Following the recent completion of the FEED studies and approval of the environmental impact assessment (AMDAL), which are significant steps, we are now firmly focused on finalising gas sale agreements by mid-2024 and progressing and completing engagement with potential debt finance providers and farm-in partners to reach a final investment decision in mid-2024.

“We are also excited by the prospects of our other project area in Aceh, which is currently being evaluated for commerciality in the shallow water gas discoveries, as well attracting partners into our deeper water high impact exploration portfolio where multi trillion cubic feet gas targets have been delineated.”

 

 

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.

Read MoreOil & Gas

Featured Companies

You might be interested in