Regulatory Approvals Pending as NuEnergy Pushes Toward Indonesian Gas Commercialisation

Drilling Progress at Tanjung Enim

NuEnergy Gas Limited (ASX – NGY) has reported significant operational progress in its June 2025 quarterly update, focusing on its flagship Tanjung Enim Production Sharing Contract (PSC) in South Sumatra, Indonesia. The company successfully completed drilling the first two of four planned wells under its early gas sales initiative, aiming to deliver initial gas sales of 1 million standard cubic feet per day. The first well, TE-B06-001, was drilled to 411 metres, intersecting multiple coal seams indicative of coal bed methane (CBM) presence.

Following drilling, NuEnergy installed a Progressive Cavity Pump (PCP) system equipped with real-time remote monitoring capabilities. This technology is designed to enhance production efficiency and reduce downtime, marking a critical step towards stable gas output. Dewatering activities are underway, with encouraging gas build-up observed.

Commercialisation and Agreements

In parallel with operational advances, NuEnergy has finalized the terms of a Gas Sales and Purchase Agreement (GSPA) with PT Perusahaan Gas Negara (PGN), Indonesia’s leading natural gas distributor and a subsidiary of state energy giant PT Pertamina. The agreement, pending formal signing upon government approval, represents a vital commercial milestone that will enable NuEnergy to monetize its gas production and supply the growing Indonesian market.

The Ministry of Energy and Mineral Resources (MEMR) has received recommendations from SKK Migas, the upstream oil and gas regulator, regarding gas allocation and pricing, which are key to progressing the GSPA. This regulatory engagement underscores the strategic importance of NuEnergy’s project within Indonesia’s energy landscape.

Broader Portfolio Activity

Beyond Tanjung Enim, NuEnergy continues to advance its other South Sumatra assets. At the Muralim PSC, dewatering and gas flaring tests have confirmed gas flows, with SKK Migas conducting site verification. This discovery could grant NuEnergy up to three years to submit a Plan of Development (POD) for further advancement.

Meanwhile, at the Muara Enim PSC, environmental permitting is underway, with technical approvals awaited for water management. NuEnergy is preparing a pre-POD proposal, aiming to submit it in the second half of 2025. The company is also in the process of relinquishing its interest in the Muara Enim II PSC, streamlining its portfolio to focus on higher-value assets.

Strategic Outlook

NuEnergy’s clear strategy is to integrate its coal bed methane assets in South Sumatra into a cohesive CBM hub, supplying sustainable clean energy to Indonesia’s rapidly growing market. The company’s focus on moving from exploration to production and commercialization reflects a disciplined approach to unlocking shareholder value while supporting Indonesia’s energy transition goals.

With drilling operations progressing smoothly and commercial agreements nearing completion, NuEnergy is positioning itself as a significant player in Indonesia’s unconventional gas sector. The coming months will be critical as regulatory approvals and production ramp-up unfold.