Conrad Asia Energy has locked in over 90% of its US$320 million Mako Gas Project contracts, maintaining its timeline for first gas in late 2027 while restructuring leadership and progressing Aceh PSC assets.
- Over 90% of Mako project capital contracts awarded
- Project remains fully funded with first gas targeted in Q4 2027
- 1P reserves of 20 mmboe and 2P reserves of 29 mmboe recognised
- Leadership restructure sees CEO step back, Executive Chairman role expanded
- Ongoing farm-in discussions and seismic planning for Aceh PSCs
Mako Gas Project Nears Full Contractual Commitment
Conrad Asia Energy Ltd (ASX:CRD) has secured binding contracts and letters of award covering over US$290 million, more than 90% of the total US$320 million capital expenditure, for its flagship Mako Gas Project in Indonesia’s West Natuna Basin. Key contracts include subsea infrastructure (SURF), conductor support frame (CSF), mobile offshore production unit (MOPU), and drilling rig, with milestone payments already underway. The company maintains its guidance for first gas in the fourth quarter of 2027, with the project fully funded and a substantial contingency in place.
Strategic Infrastructure Milestone Achieved
During the quarter, PT PLN Energi Primer Indonesia completed the technically challenging “hot tap” connection on the West Natuna Transportation System (WNTS) to the Pemping gas pipeline, enabling delivery of Mako gas into Batam and Indonesia’s domestic market. This underwater connection was performed without interrupting gas flow on a pipeline operating at 1,096 psi and 29 metres depth, one of the highest-risk stages in pipeline installation. The development of this infrastructure underpins the commercial viability of Mako, which is currently the largest undeveloped gas field in the West Natuna Basin.
Reserves Recognition and Equity Transactions
For the first time, Conrad booked 1P reserves of 20 million barrels of oil equivalent (mmboe) and 2P reserves of 29 mmboe net to its 76.5% participating interest in the Duyung Production Sharing Contract (PSC) as of year-end 2025. Independent evaluator Gaffney Cline Associates also reported 2P reserves of 330 Bcf (170 Bcf net) and 2C contingent resources of 12 Bcf (9 Bcf net). However, these figures are subject to revision following the completion of several equity transactions, including the transfer of interests from Coro, Empyrean, and Nations Natuna Barat. Post-transactions, Conrad’s effective operated interest will adjust to 22.875%, with a restatement of reserves forthcoming.
Leadership Restructure Reflects Development Phase
In a notable corporate development, CEO Miltos Xynogalas is stepping back from his role effective 31 August 2026, transitioning to focus on Indonesian business activities, partner relations, and government engagement. Peter Botten has been appointed Executive Chairman with an expanded mandate that includes capital markets engagement and oversight of Mako’s development through to first gas. Conrad has commenced a search for a new CEO to lead the company through its next phase as a gas producer. This leadership shuffle follows the successful Mako farm-out and partnership establishment with Nations Natuna Barat in Indonesia.
Aceh PSCs: Seismic and Farm-In Progress
Beyond Mako, Conrad continues to advance its 100% operated interests in the ONWA and OSWA PSCs offshore Aceh Province. Independent reports estimate mid-case 2C contingent resources of 216 Bcf gross (162 Bcf net) across three gas accumulations. A planned 3D seismic program aims to refine resource estimates and unlock further upside potential, facilitating future drilling campaigns and development planning. Discussions with potential equity partners for a minority, non-operated farm-in are ongoing, with several parties accessing the data room.
Financial Position and Operational Discipline
Conrad closed the quarter with US$3.26 million in cash, drawing US$19.95 million under a Carry Loan Agreement to fund development costs including MOPU pre-startup, CSF, SURF, drilling, and general and administrative expenses. Total drawdowns under the facility now stand at US$38.97 million. Operating costs and capital expenditure remain in line with previous guidance, and payments to related parties amounted to US$0.54 million for director fees and remuneration. Safety and environmental performance continue to be strong, with zero incidents reported during the period.
Bottom Line?
Conrad’s Mako project is entering a critical execution phase with major contracts locked in and infrastructure milestones cleared, but upcoming equity transactions and leadership changes introduce variables to watch closely.
Questions in the middle?
- How will the forthcoming restatement of reserves impact Conrad’s net attributable volumes and valuation?
- Who will be appointed as the new CEO, and how might this influence Conrad’s strategic direction?
- What progress will be made on Aceh PSC farm-in negotiations and seismic acquisition in the coming quarters?