Extracted from NGY's Half-Year report ended December 2023 on Muara Enim II PSC -
The Muara Enim II PSC expired on 31 March 2019. Pending the extension of the PSC, the Board took the approach to impair the full carrying value of Exploration and Evaluation expenditure in the financial year ended 30 June 2019 of $6,231,964 and to record a provision for potential penalty of $2,097,169 (USD1,500,000) in relation to the unfulfilled firm commitment under the PSC. Nevertheless, NuEnergy has on 9 February 2023, obtained the letter of approval from MEMR dated 7 February 2023, for an additional exploration period of 24 months until 29 January 2025 to complete the exploration firm commitments. The additional exploration period will enable NuEnergy to gather gas production data in order to proceed with reserves certification to fulfill a POD submission requirement. This will enable the Muara Enim II PSC to migrate from exploration to development status.
During the period, NuEnergy undertook a geological study and preliminary survey for three selected core hole well locations to fulfil the PSC’s firm commitments. From the geological study, it appears that the coal seam of the Muara Enim II PSC is contiguous to our Tanjung Enim PSC, NuEnergy’s advanced CBM asset and which is in the midst of being developed. The result from the drilling of these core hole wells will confirm the coal seam lateral distribution hence the extensiveness of the gas resource.
Coring operation is on track to complete before the exploration period deadline. NuEnergy is currently preparing the drilling program and the environmental permit for coring activities to be completed by 29 January 2025.
NGY Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
