Conrad Asia Energy has completed the sale of a 75% non-operated interest in the Duyung PSC, triggering a US$4 million payment from PT Nations Natuna Barat. The company says the transaction leaves it with a 22.875% operated interest and fully funds the US$320 million Mako gas development.
- 75% Duyung PSC interest transfer completed
- US$4 million second payment received
- US$320 million Mako development described as fully funded
- 22.875% operated interest retained after final settlement steps
- First gas still targeted for Q4 2027
75% Duyung Farm-down Reaches Completion
Conrad Asia Energy Ltd (ASX:CRD) has completed the transfer of a 75% non-operated participating interest in Indonesia’s Duyung Production Sharing Contract to PT Nations Natuna Barat, turning a long-running funding transaction into cash in the bank. Completion triggered the second US$4 million tranche of the agreed US$16 million consideration.
The Indonesian Ministry of Energy and Mineral Resources approved the transfer on 27 August 2026, after which the remaining conditions were satisfied. Conrad received the first US$5 million tranche in March; a further US$7 million is due when commercial production begins, while the balance of the consideration is linked to production revenues until 75% of past costs have been recovered.
Mako Funding Secured While Conrad Retains Operatorship
Conrad says the transaction leaves it fully funded for the US$320 million development of the Mako gas project, with substantial contingencies included in the funding package. It will retain a 22.875% operated interest in the Duyung PSC through its interests in WNEL Holdings once the final steps of its settlement with Empyrean Energy are completed, including the issue of an 8.5% interest in WNEL Holdings to Empyrean.
That structure gives Nations the majority non-operated position while preserving Conrad’s operatorship and an economic stake in the field. The company said Mako reached final investment decision earlier this year and that development work is now under way, with first gas targeted for the fourth quarter of 2027. The project is intended to supply gas for power generation in Batam, which Conrad identifies as an emerging regional data-centre hub.
Reserves Restatement and Production Milestones Remain
The completion removes a key transfer condition, but it does not eliminate the execution milestones ahead. Conrad still needs to complete the final Empyrean settlement steps, issue the remaining equity interest and publish a restatement of reserves and resources. The next major cash event under the farm-down terms is the US$7 million payment tied to commercial production rather than construction progress.
Conrad also plans to evaluate additional structures near the Mako field using 3D seismic data already acquired across the Duyung PSC. Those opportunities sit alongside the immediate task of delivering the approved development on schedule. The fourth-quarter 2027 first-gas target remains subject to the approvals, costs, equipment availability, development execution and other risks outlined by the company.
Bottom Line?
The farm-down has converted a major ownership transfer into near-term cash and funding certainty, but Conrad’s retained value now depends on completing settlement steps and delivering first gas in 2027.
Questions in the middle?
- When will the final Empyrean settlement steps and reserves restatement be completed?
- How will Mako development progress against the fourth-quarter 2027 first-gas target?
- What production revenue will ultimately flow to Conrad from its retained 22.875% operated interest?