(Alliance News) - Empyrean Energy PLC on Tuesday said that key terms for a long-term gas sales agreement have been agreed for a production sharing contract in which it has an interest.
The oil and gas development company said that Conrad Asia Energy Ltd, which operates the Duyung production sharing contract in Indonesia, announced that Conrad Asia's subsidiary West Natuna Exploration Ltd had signed a non-binding key terms with Sembcorp Gas Pte Ltd, a Singapore-based gas buyer.
Empyrean Energy has an 8.5% interest in the Duyung PSC.
The terms have been endorsed by SKK Migas, the petroleum upstream regulator in Indonesia, for a first long-term gas sales agreement for the Mako gas field, located in the Duyung PSC.
Under the terms, approved gas output will start from Mako in 2025 until the end of the Duyung PSC in 2037, for a total forecast sales gas volume of 293 billion cubic feet with potential to increase to 392 billion cubic feet. Gas sales will be priced against Brent oil, Empyrean Energy explained.
Chief Executive Officer Tom Kelly said: "Focus will now be on converting this significant milestone into a binding gas sales agreement. The existing terms will be welcomed by those parties currently participating in the sell down process to fund the development of the Mako gas field. The Mako gas field is the largest undeveloped gas discovery in the West Natuna Sea and is considered significant for energy security in the region and the transition from coal to cleaner sources of energy."
Empyrean Energy shares fell 6.4% to 0.91 pence each on Tuesday morning in London.
By Tom Budszus, Alliance News reporter
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Empyrean (EME)