SundaGas Banda Unipessoal, a wholly owned subsidiary of the UK-based and AIM-listed Baron Oil, has wrapped up the sale of a partial interest in a gas field offshore Timor-Leste to Timor Gap Chuditch Unipessoal, its existing joint venture partner and a wholly owned subsidiary of Timor Gap, the Timor-Leste national oil and gas player.
The duo entered into a memorandum of understanding (MoU) at the end of January 2024 concerning the transfer of an additional 15% working interest to Timor Gap in the Chuditch production sharing contract (PSC), also known as TL-SO-19-16 PSC and Chuditch PSC. A few days later, the companies signed an agreement to make the sale of the 15% non-operated interest possible. At the time, the completion was subject to the receipt of approval from Timor-Leste’s National Petroleum Authority (ANP).
According to Baron Oil, the sale has now been completed and Timor Gap will make a cash payment to SundaGas of around $1 million to cover back costs within 30 days. This agreement has a value of about $8.5 million, made up of reimbursement for back costs of around $1 million and the offset of future spending, which is estimated to be around $7.5 million in 2024.
While SundaGas has retained operatorship of the Chuditch PSC with a 60% working interest, Timor Gap has a 40% interest, made up of a working interest of 15%, plus its original 25% interest carried to first gas. As a result, Timor Gap will be responsible for paying 20% of all costs related to the PSC, including the drilling of the planned Chuditch-2 appraisal well.
This well will be drilled and flow tested in late 2024, subject to rig and drilling services availability and the completion of drill financing. The TL-SO-19-16 license is situated in the south of the former joint petroleum development area with Australia, which transitioned to Timor-Leste exclusive jurisdiction following a maritime border treaty in August 2019.
Located approximately 185 km south of Timor-Leste, 100 km east of the producing Bayu-Undan field, and 50 km south of the Greater Sunrise potential development, the Chuditch PSC covers an area of about 3,571 km2, in water depths of 50-100 m, and contains the Chuditch-1 gas discovery drilled by Shell in 1998.