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JAKARTA (RambuEnergy) – Empyrean Energy Plc, a London AIM listed oil and gas explorer with interests in China, Indonesia and the United States, said that the Indonesia’s Ministry of Energy and Minerals has approved the Plan of Development (PoD) for the Mako Gas Field at the Duyung PSC in Indonesia.
“The POD approval by the Ministry of Energy and Mineral Resources in Indonesia is another important milestone in progressing the Mako Gas Field towards production. Tenure has now been secured on the Duyung PSC out to 2037 which reduces risk and adds intrinsic value to the project,” Tom Kelly, CEO of Empyrean, said.
“Importantly, the POD approval is also crucial to advancing negotiations of the heads of agreement into a gas sales agreement with the buyer in Singapore for the off-take of Mako gas. It also paves the way for appraisal later in the year that can increase resources at Mako and hopefully test the deeper Tambak prospect,” he said.
The Mako Field is a very large gas accumulation with a lateral extent of approximately 340 square kilometres located adjacent to underutilised infrastructure and a strong energy market.
The Duyung PSC covers approximately 890 km2 in the Riau Islands Province, situated in the offshore Indonesian waters of the South China Sea, and is proximal to the West Natuna Transportation System (WNTS), a gas pipeline to markets in Singapore.
WNTS currently supplies approximately 0.4 billion cubic feet (Bcf) of natural gas per day to Singapore. In June 2017, Empyrean participated in the successful Mako South-1 exploration well. A recent resource audit by Gaffney Cline & Associates (RNS dated 21 Jan 2019) reported contingent 2C resources of 276 Bcf in the Mako Gas Field.
The Duyung PSC is 100% owned and operated by West Natuna Exploration (WNEL). WNEL shareholders consist of Singapore’s Conrad Petroleum (90%) and Empyrean Energy (10%).
The Duyung PSC is operated by Singapore-based Conrad Petroleum.
The Duyung PSC covers an offshore permit of approximately 1,100km2 in the prolific West Natuna Basin. The main asset in the block is the Mako shallow gas discovery. In addition, numerous prospects and leads have been identified in the block using 3D seismic data.
Empyrean participated in the appraisal well Mako South-1 in June 2017. The well was drilled using a jackup rig located in water depths of 308 ft. The well reached a TD of 1,707 ft on 22 June 2017.
Coro Acquistion
In February this year, Coro Energy signed an agreement to acquire a 15% direct interest in the Duyung Production Sharing Contract (PSC) in the West Natuna Basin, offshore Indonesia from West Natuna Exploration (WNEL).
The West Natuna Basin comprises the shallow water Mako gas field, which is located 16km from the West Natuna Transportation System.
Under the terms of the binding conditional agreement, Coro Energy will pay a $4.8m cash and shares consideration, which consists of $2.95m in cash and $1.85m in shares.
Coro Energy will also contribute $10.5m toward the drilling campaign for 2019 to acquire the stake in the Duyung PSC.
Gross-Split PSC Scheme
In January, West Natuna Exploration Ltd has agreed to change the production sharing contract (PSC) scheme of Duyung Working Area (WA) to gross-split based from previously cost-recovery based.
The PSC contract was signed on Jan. 16, 2007, based on cost-recovery PSC scheme. The change of the contract has no impact on the operator’s right to develop the block until Jan. 16, 2037. The Duyung block, which is 100-percent owned by West Natuna Exploration Ltd, covers 926.94 square kilometers.
West Natuna Exploration Ltd is the second PSC that changed its contract to gross split-based PSC contract, after Eni East Sepinggan signed on Dec. 11, 2018. (*)
Written by Staff Writer
Edited by Roffie Kurniawan (email: roffie.kurniawan@gmail.com)
