Conrad wins Indonesian acreage containing gas discoveries

Natural gas-focused Conrad Asia Energy has been named as the winning bidder for the Offshore North West Aceh (ONWA) and Offshore South West Aceh (OSWA) PSCs located offshore northwest and southwest of the Aceh Province of Indonesia.

ONWA and OSWA were offered under the Indonesia Petroleum Bidding Round (IPBR) 2022 first licencing round for which Conrad submitted its bids on 5 September 2022. Conrad will operate and hold a 100 per cent participating interest in both blocks.

Due to the deep-water environment and the lack of exploration in large parts of each block, notwithstanding the existing discoveries in the shallow water, the blocks are deemed by the Indonesian authorities as “frontier” with corresponding fiscal arrangements which are attractive and favourable compared to other Indonesian PSCs. The deeper water areas are underexplored, but recent seismic surveys have delineated leads with multi TCF potential, with existing seismic showing flat spots and gas chimneys, indicating evidence of the presence of hydrocarbons.

Conrad now has 60 days to discuss and formally accept the offers with the relevant authorities.

The total committed work program for each PSC is $15 million and includes geological studies for 2023, 500 square kilometres of 3D seismic acquisition for 2024 and the drilling of a well for 2025. Most of the funding will come from farm-in partners as the PSCs are progressed and from the commencement of cashflow from the Mako offshore gas field in Indonesia.

Conrad informed earlier this week it had received approval from the Indonesian government for its revised development plan for the Mako gas field.

According to Conrad, the new PSCs contain hydrocarbon potential around the existing shallow-water gas discoveries close to shore and in the underexplored deep-water portions of the blocks. The water depths in the two working areas vary between 5 metres and 1,500 metres, with the existing discoveries located in water depths of less than 100 metres.

Conrad intends to acquire 3D seismic data in the most prospective areas, where it expects to achieve higher exploratory success rates, further de-risking the exploration potential.

The ONWA block comprises total acreage of 9,182 square kilometres and contains the Meulaboh-1 and Meulaboh East-1 gas discovery wells. The OSWA block covers 10,700 square kilometres and contains the Singkel-1 gas accumulation. These discoveries have all been successfully flow tested at commercial rates and are close to shore, offering near-term, low-cost commercialisation opportunities.

The company is in the process of obtaining a third-party competent persons report for the known gas discoveries in both blocks.

Conrad Managing Director and Chief Executive Officer, Miltos Xynogalas, commented, “The award of these two PSCs is a transformational event for Conrad as these blocks contain discoveries that significantly increase our resource base and offer the opportunity for Conrad to add several gas projects to its existing large Mako gas project. Conrad’s initial scoping study of gas markets in the region has been positive and we are optimistic of commercialising these discoveries.

“The potential upside for Conrad is the exploratory opportunity in the deep water, where we have already identified a host of high-impact gas plays. These are potentially each multi-trillion cubic feet in size, with gas chimneys and flat spots, indicating evidence of hydrocarbons. Our best leads are in 1,000 metres of water which by global standards is not deep. Conrad has a 100 per cent working interest in these blocks and will be seeking partners to join the exploration efforts in these areas.”