Extracted from NGY's Half-Year Report ended December 2023 on...

Extracted from NGY's Half-Year Report ended December 2023 on Tanjung Enim PSC -

On 17 June 2021, the Indonesian Ministry of Energy and Mineral Resources (“MEMR”) approved NuEnergy’s first Plan of Development (“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 coal bed methane (“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 secured the environmental permit dated 26 September 2023 from the Ministry of Environment and Forestry for the Tanjung Enim POD 1. With the approval, NuEnergy is now in a position to work towards the final preparations for early gas production for the Tanjung Enim asset.

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, before commencing gas sales. NuEnergy will commence with a modest phase of initial gas sales, estimated at 1 mmscfd of CBM which is
part of the 25 mmscfd of gas production approved under the Tanjung Enim POD 1.

On 10 February 2023, NuEnergy signed a Heads of Agreement with PT Laras Ngarso Gede (“Laras Energy”), which was later extended on 10 August 2023 and 3 January 2024 respectively, for the supply and sale commitment by NuEnergy and the purchase commitment by Laras Energy, of CBM produced from Tanjung Enim’s POD 1. NuEnergy is continuing to develop its CBM market survey and business development and continuing to identify additional end users
in South Sumatra capable of converting their generators and trucks from diesel-based to gas power-based.

NuEnergy has identified locations for four early gas sales wells, a production facility and the subsequent flow lines for the early generation of gas at Tanjung Enim. NuEnergy will complete the land acquisition process and carry out land clearing and drilling site preparation activities on these identified locations in due course. 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.

On 22 May 2023 the Directorate General of Oil & Gas from MEMR (“Migas”) announced a new simplified gross revenue split proposal of 95% to Contractor and 5% to Government for the unconventional gas industry, to enhance project profitability, flexibility and technological innovation for unconventional gas industry players. This represents an improvement of about 9% in the split for the contractor, on the previous framework. Further detail on this proposed split
has yet to be announced by the Government.