Arbitration battle looms in Asia as Empyrean challenges Conrad’s withdrawal notice

November 18, 2025, by Melisa Cavcic

Conrad Asia Energy’s wholly-owned subsidiary, West Natuna Exploration Limited (WNEL), has served Empyrean Energy, an AIM-listed oil and gas exploration company, with a notice of election of remedy and forced withdrawal, after the duo had been knee-deep in talks regarding the settlement of outstanding cash calls over the past few months.

Illustration; Source: Conrad Asia Energy

The notice comes shortly after Coro Duyung, a subsidiary of Coro Energy in Southeast Asia, amended the end date for the sale of its 15% interest in the Duyung PSC, holding the Mako field in the West Natuna Sea off the coast of Indonesia, bringing Conrad’s WNEL closer to increasing its 76.5% stake in the asset, while the remaining 8.5% interest is held by Empyrean Energy.

While disclosing the receipt of a notice of election of remedy and forced withdrawal, the latter explains that the notice was issued while it was engaged over several months in “constructive and good-faith” discussions regarding the basis for and, if appropriate, settlement of valid outstanding cash calls, in line with the dispute-resolution procedures set out in the joint operating agreement (JOA) dated May 21, 2020.

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Empyrean elaborated: “At the time the notice was received, the formal dispute-resolution process under the JOA between the parties was ongoing. Empyrean has advised WNEL/Conrad that, should they wish to cease negotiation, the dispute under the JOA should be referred to arbitration.

“Empyrean also notes that the parties had made progress in recent discussions and that an “in-principle”, verbal understanding regarding the disputed cash-call amounts (which total US$789,815 including interest) had been reached, subject to contract.”

The company claims to be aware that Coro Energy previously disputed certain cash calls issued by WNEL/Conrad but reached a separate settlement. The AIM-listed company reiterates that it will not agree to dispose of its participating interest in the Duyung PSC at a material discount to its assessed value. The firm has formally requested that WNEL/Conrad withdraw the notice, which has not been done.

Empyrean underlined: “The intended effect of the notice is that Empyrean is deemed to have proposed to withdraw under the JOA and Empyrean’s participating interest is deemed to have been transferred to WNEL. As noted above Empyrean’s position is that the dispute-resolution process is active and ongoing and no such remedies may be exercised under the JOA.”

The firm has received legal advice on the matter, as it rejects that the notice was issued validly, and intends to take all necessary action to protect its interests. Empyrean notes that Conrad entered into a trading halt on the ASX on November 11, 2025, pending an announcement in relation to the completion of the proposed farm down of its 75% stake in the Duyung PSC. The Asian player then requested a voluntary suspension of its securities two days later and trading in its securities remains in suspension.

As a result, the AIM-listed player, which was advised that the notice purports to frustrate the tag-along provisions in the JOA, is adamant that it remains committed to “a cooperative, commercial and transparent” resolution of the dispute and continues to reserve all of its rights regarding any loss, damage or costs arising from actions taken by the other player that the firm considers being contrary to the JOA or associated agreements.