Extracted from NGY's 2023 Annual Report on Tanjung Enim PSC which was released today -
On 17 June 2021, the Indonesian Ministry of Energy and Mineral Resources (“MEMR”) approved NuEnergy’s first POD for the Tanjung Enim PSC under a gross split scheme (referred to as Tanjung Enim POD 1) which will allow the project to proceed to field development and surface facility construction. NuEnergy shall carry out the operations and commercial development of the Tanjung Enim POD 1 exclusively. The approval of the Tanjung Enim POD 1 also represents the first CBM POD in Indonesia.
The Tanjung Enim POD 1 approval covers the development of two target areas, in the north and south of the contract area covering ~33km2 (or 13% of the total acreage of the Tanjung Enim PSC) where the Indonesia Research and Development Center for Oil and Gas Technology has confirmed and certified reserves totalling ~164.89 Bscf in these areas. The Company has received the Seller Appointment Letter from the Indonesian Special Taskforce for Upstream Oil & Gas Business Activities (“SKK Migas”) that formally authorises and appoints NuEnergy to sell CBM produced from the Tanjung Enim PSC on SKK Migas’s behalf.
NuEnergy has on 10 February 2023 signed a Heads of Agreement with PT. Laras Ngarso Gede (“Laras Energy”) and was later extended with an Extended Heads of Agreement on 10 August 2023, on similar terms and conditions, for the supply and sale commitment by NuEnergy and the purchase commitment by Laras Energy, of CBM produced from Tanjung Enim’s POD 1. Subsequently, NuEnergy submitted the letter of request for gas allocation and price, to SKK Migas in February 2023 and is now pending the approval of MEMR. Concurrently NuEnergy is working on the draft Gas Sales Agreement (“GSA”) with Laras Energy. NuEnergy is expected to commence with an initial phase of gas sale estimated at 1 million standard cubic feet per day (“mmscfd”) of CBM to Laras Energy, which represents the gradual progress in achieving the 25 mmscfd of gas production as approved under the Tanjung Enim POD 1. The initial gas sales are expected by middle of next year.
In addition, NuEnergy has completed and submitted the environmental impact studies’ application as required under the Tanjung Enim POD 1 and is now pending approval from the Ministry of Environment and Forestry of Indonesia. NuEnergy has also finalised the location of all the proposed well sites and is in the final stage of land acquisition. NuEnergy and SKK Migas representatives have already conducted a site visit and joined in the socialization process with the local community in June 2023. NuEnergy has initiated the procurement process of long lead time items and also appointed some of the service companies necessary for the early gas sales program. NuEnergy has received the technical proposals from shortlisted engineering companies for the front-end engineering design (“FEED”) studies for its Tanjung Enim POD 1. The FEED study is expected to commence in 2024.
NGY Price at posting:
3.7¢ Sentiment: Buy Disclosure: Held
