Coro Energy PLC (AIM:CORO) executive chair James Parsons told investors that improving terms for the Mako field, in the Duyung PSC, will likely boost the attractiveness of the project for potential partners and investors.
It comes after the operator, Conrad Asia Energy, updated on the field development project amid ongoing negotiations over a gas sales agreement.
Coro holds a 15% interest in Mako (the Duyung production sharing contract) alongside AIM-quoted peer Empyrean Energy PLC (AIM:EME), whilst Conrad has 76.5%.
The project's Phase 1 capital costs are currently estimated at US$325 million, with efforts ongoing to optimise further and reduce expenditures, Coro highlighted.
Negotiations over the project’s gas sales agreement (GSA) are ongoing and are now expected to be finalised by the second quarter of 2024.
It comes after a non-binding term-sheet was signed in the third quarter of 2023 and subsequent talks with Singapore energy company Sembcorp and the Indonesian authorities resulted in an improved pricing formula (but also an extension to the GSA process).
An investment decision for the project is now expected by "mid-2024", resulting in an anticipated start of production by "mid-2026".
A farm-down process is progressing, the company added, with the project operator Conrad Asia Energy seeking to offload some project equity to a new partner – so far a term sheet has been signed with one party, and further parties have also expressed interest, Empyrean noted.
Conrad has meanwhile appointed an advisor to assist with debt funding elements of its anticipated project financing, with an indicative term sheet in place with one potential lender.
"The improved GSA price formula and optimised capital expenditures (with the introduction of staged production start-up) underpin both the robust economics of the Duyung PSC and the likely attractiveness of the project to debt providers and potential farm in partners,” Coro chair Parsons said in a statement.
“We eagerly await the outcome of the farm out process and in the meantime will continue to progress the growth of our renewables portfolio at pace building on our recent progress in both Vietnam and the Philippines."