Conrad Raises A$9 Million at 12% Discount in Two-Tranche Placement

Capital Raise Details and Structure

Conrad Asia Energy Ltd (ASX: CRD), an Asia-focused natural gas exploration and development company, announced firm commitments to raise approximately A$9 million through a two-tranche placement of CHESS Depositary Interests (CDIs) priced at A$0.65 each. The placement is split into a Tranche 1 raising about A$6.1 million from institutional and sophisticated investors using existing placement capacity, and a Tranche 2 raising approximately A$2.9 million from directors and senior management, subject to CDI holder approval at the upcoming AGM.

The issue price reflects a discount of roughly 12% to the last closing price and recent volume-weighted average prices, a common feature in capital raises designed to incentivize investor participation. The placement is not underwritten but attracted strong demand exceeding expectations, signaling robust investor confidence in Conrad’s strategic direction.

Insider Confidence and Strategic Use of Funds

Notably, all directors and senior management are participating in the raise with a combined commitment of A$3 million, underscoring their conviction in the company’s prospects. Managing Director and CEO Miltos Xynogalas highlighted this insider support as a positive endorsement of Conrad’s ability to achieve critical upcoming milestones.

The proceeds will primarily fund general project costs and administrative expenses, ensuring Conrad remains well-capitalized to progress key objectives. These include finalizing binding gas sale agreements for the Mako Gas Field, concluding the farm-down process for the Duyung Production Sharing Contract (PSC), making a final investment decision (FID) on Mako, and advancing gas commercialization initiatives in Aceh.

Project Outlook and Market Positioning

The Mako Gas Field, located in the Natuna Sea offshore Indonesia, is one of the largest gas discoveries in the region and Conrad’s flagship asset. The company’s focus on undervalued and technically complex gas assets, combined with a low-cost development approach, positions it well to unlock value in these projects. The recent finalization of the Mako Gas Sales Agreement and settlement with Coro Energy have cleared significant hurdles, setting the stage for imminent farm-out arrangements and investment decisions.

Beyond Mako, Conrad is actively pursuing opportunities in Aceh, Indonesia, with ongoing discussions with potential partners that could further diversify and strengthen its asset base. The company’s board, led by industry veteran Peter Botten, brings deep upstream experience, which adds credibility to its development strategy.

Next Steps and Market Implications

The timetable for the placement sees Tranche 1 CDIs issued and trading by early May, while Tranche 2 awaits shareholder approval at the June AGM. Investors will be watching closely for the AGM outcome and subsequent progress on the Mako FID and farm-down processes, which are pivotal for Conrad’s near-term value creation.

While the placement discount is typical for such capital raises, it may exert some short-term pressure on the share price. However, the strong insider participation and clear funding pathway for key milestones provide a solid foundation for medium-term growth prospects.