Conrad Asia Energy has secured a pivotal Gas Sales Agreement with Indonesia’s state utility PLN, linking Mako gas prices to the Indonesian Crude Price and advancing its farmout strategy while increasing its stake in the Duyung PSC to 91.5%.
- Finalized Gas Sales Agreement with PLN linking Mako gas price to Indonesian Crude Price
- Exclusive farmout negotiations underway for Duyung PSC with preferred partner
- Acquisition agreement to increase Conrad’s Duyung PSC stake from 76.5% to 91.5%
- Substantial 2C contingent and prospective gas resources in Mako and Aceh PSCs
- Quarter-end cash position of US$1.04 million with active funding strategies
Strategic Gas Sales Agreement Secures Domestic Market Access
Conrad Asia Energy Ltd (ASX:CRD) has marked a significant milestone in the first quarter of 2025 by finalizing a Gas Sales Agreement (GSA) with PT PLN Energi Primer Indonesia (PLN), Indonesia’s state-owned electricity utility. This follows a directive from the Indonesian Ministry of Energy and Mineral Resources (MEMR) mandating that all gas from the Mako Gas Field be supplied to the domestic market in Batam to meet surging local demand.
Crucially, the GSA links the Mako gas price to the Indonesian Crude Price (ICP), a pricing mechanism akin to Brent oil-linked LNG contracts. This linkage maintains economic parity with previous pricing structures approved for both domestic and export sales, thereby preserving the intrinsic value of Mako gas and enhancing the project’s commercial viability.
Expanding Control Over Mako Through Stake Acquisition
In a complementary development, Conrad has agreed to acquire Coro Energy’s 15% Participating Interest (PI) in the Duyung Production Sharing Contract (PSC), which hosts the Mako Gas Field. Upon regulatory and shareholder approvals, Conrad’s stake will rise to 91.5%, consolidating its operational control and increasing net attributable 2C contingent resources to 231 billion cubic feet (Bcf).
This transaction not only streamlines project governance but also positions Conrad to negotiate farmout agreements and financing arrangements with greater clarity and flexibility. The company is currently in exclusive discussions with a preferred partner for a farm-down of the Duyung PSC, aiming to secure a Sale and Purchase Agreement imminently.
Robust Resource Base and Development Progress
Beyond Mako, Conrad holds 100% interests in two Production Sharing Contracts offshore Aceh, Indonesia, containing combined gross 2C contingent resources of 214 Bcf and prospective resources exceeding 15 trillion cubic feet (Tcf). The company is actively exploring commercialisation pathways, including small-scale LNG infrastructure development in collaboration with PGN, Indonesia’s leading gas distributor.
On the development front, Conrad continues to advance engineering and procurement activities for the Mako project, including fabrication of the Mobile Offshore Production Unit (MOPU) and critical compressor packages. Negotiations with infrastructure partners and regulators are progressing to secure transportation access and finalize cost estimates ahead of the targeted Final Investment Decision (FID) in the coming months.
Financial Position and Funding Outlook
Conrad closed the quarter with US$1.04 million in cash, reflecting a significant one-time deposit of US$0.98 million for compressor engineering services. Operating and investing cash outflows totaled US$2.63 million, including exploration and development expenditures. The company is actively managing its funding position through farmout negotiations, settlement agreements with joint venture partners, and potential equity raises if required.
Management remains confident in sustaining operations and advancing project milestones, supported by the strengthened commercial framework and resource base.
Looking Ahead
With the GSA signature imminent and the consolidation of its Mako stake underway, Conrad Asia Energy is poised for a pivotal phase of growth. The company’s ability to navigate regulatory approvals, secure farmout partners, and execute the FID will be critical to unlocking the full value of its Indonesian gas assets.
Bottom Line?
Conrad’s strengthened position in Mako and strategic gas sales deal set the stage for a transformative development phase.
Questions in the middle?
- When will the Gas Sales Agreement with PLN be officially signed and take effect?
- How soon can Conrad finalize the farmout agreement and secure associated financing for Mako development?
- What are the potential impacts of ICP-linked pricing volatility on Conrad’s project economics and cash flow?