Coro Energy acquires interest in Duyung PSC, Indonesia

Under the agreement, Coro will pay a cash and shares consideration of US$4.8 million and contribute US$10.5 million toward the 2019 drilling campaign, in order to earn a 15% stake in the PSC. The cash element of the consideration is being subscribed/underwritten by institutional investors, including cornerstone investor Lombard Odier Asset Management (Europe) Limited, on terms which have been announced separately today.

Highlights

• Acquisition of a 15% direct interest in the Duyung PSC, West Natuna basin, offshore Indonesia, which contains the shallow water Mako gas field together with low risk step out exploration upside.
• Independent review by Gaffney Cline & Associates ascribed gross 2C resources of 276 billion ft3 (48.78 million boe) of recoverable dry gas in the Mako field with gross 3C resources of 392 billion ft3 (69.3 million boe) representing additional field upside.
• Total consideration of US$4.8 million, comprising US$2.95 million in cash and US$1.85 million in Coro shares, plus US$10.5 million in partial funding of the 2019 drilling programme for a 15% interest, representing an effective acquisition price of US$0.34/MMBtu on a 2C basis.
• Identified exploration targets, both above and beneath the field, include the Tambak prospect (scheduled for 2019 drilling) with mid-case prospective resource potential of approximately 250 billion ft3 and a chance of geological success (‘CoS’) of 45% and the Mako Shallow prospect with mid-case resource potential of 100 billion ft3 and a CoS of 75%.
• The field development plan has been submitted to the Indonesian authorities for approval.
• The field is located close to the West Natuna Transportation System offering the potential to sell gas into the Singapore market, where a Heads Of Agreement has been recently signed with a gas buyer.
• Favourable gas pricing in the developed Singapore market, with piped gas competing with LNG import.

James Menzies, Chief Executive Officer, commented:

"Mako is a high quality asset with a great address: a large undeveloped resource in a prolific basin and close to existing infrastructure with capacity, providing access to a hungry market in Singapore. We are also excited by the exploration potential to more than double the size of the resource - this is very significant, high value, low risk step out exploration located above and beneath the field itself.

The operator, Conrad Petroleum, has done a great job in bringing the project forward and advancing the technical understanding of the field and the surrounding prospects, and we are delighted to now be working with them. We see this as a potential hub for wider value creation in the region and look forward to reporting on our further progress shortly."

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/11022019/coro-energy-acquires-interest-in-duyung-psc-indonesia/