Finder brings Timor-Leste oil project closer to drilling with Hakuryu-5 contract

Hakuryu-5 secured for three-well campaign

Finder Energy Holdings Limited (ASX:FDR) has taken a significant execution step at its Kuda Tasi and Jahal project by contracting the Hakuryu-5 semi-submersible drilling unit from ENEOS Drilling. The contract covers three firm development wells, with drilling scheduled to begin between 1 December 2027 and 15 March 2028, subject to the contract’s conditions being satisfied.

The estimated 150-day programme includes drilling and completing the wells for production, installing wellheads and Christmas Trees, and leaving them ready for connection to the Petrojarl I FPSO. The gross joint venture cost is approximately US$42.3 million under the stated assumptions, although the final amount will depend on the actual operating period and applicable rates. Finder said it expects to fund its share primarily through project debt financing being progressed with Barrenjoey DCM.

The rig award converts a previously unresolved part of the development schedule into a defined contract. Finder’s October rig negotiations had been identified as one of the remaining hurdles before the company’s targeted 30 November 2026 FID, alongside financing and other major project agreements.

Optional wells add flexibility, while approvals remain

Finder can add two wells on the same terms by giving notice no later than the contract commencement date. Those slots could accommodate participation by other operators, create potential cost and operational synergies, or be used for exploration and appraisal drilling aimed at possible tie-back opportunities within PSC 19-11. The announcement does not commit the company to drilling either optional well.

The contract is conditional on approvals from the KTJ joint venture, the Timor-Leste government and Finder’s board by 31 December 2026. ENEOS parent company and board approvals are required by 16 November 2026. Finder must also provide staged bank guarantees totalling US$19.3 million on a gross basis, with its share expected to be supported by a facility within the proposed debt package.

Those funding requirements are the less glamorous but material counterpart to the rig headline. The contract can be terminated in certain circumstances, including if a site survey identifies additional mooring equipment and the parties cannot agree who will bear the related equipment and logistics costs. Finder also faces customary early termination payments if it cancels for convenience or defaults in specified circumstances.

Long-lead equipment moves toward execution

The rig commitment sits alongside procurement and service arrangements already advanced for the campaign. Sumitomo is supplying casing, production liner and completion tubing; OneSubsea is fabricating three Christmas Trees; AGR is providing integrated drilling management; and SLB is supplying upper-completion equipment. Finder has also acquired wellheads from another joint venture after inspection.

Finder said these commitments are intended to position the project for execution after FID. The immediate test is whether the remaining approvals, financing arrangements and major project agreements can be completed by the company’s 30 November target, rather than whether the drilling plan can be described in increasingly concrete terms.