Coro Energy PLC (AIM:CORO) chairman James Parsons described himself as ‘delighted with progress’ as the company’s flagship asset, the Mako gas project, in the Duyung PSC, Indonesia, advanced through key milestones.
The company, in a statement, told investors that the partners in the Mako project have approved an updated development plan which was subsequently submitted to the government for approval.
Also the partners commissioned a new competent persons report (CPR) which has been prepared by GaffneyCline & Associates (GCA) for Mako.
The consultant described “compelling” project economics including an internal rate of return estimated at 51% and a net present value to Coro of US$87mln (US$577mln gross).
GCA’s report highlighted some 42bn cubic feet of net entitlement 2C resources, net to Empyrean, covering the life of the project.
The consultant noted an anticipated plateau production rate of 120 MMscf/d for six years, and, GCA estimate the capital expenditure required to first gas at US$251mln, US$38mln net to Coro. The consultant said that a reserve-based lending debt structure would be appropriate to fund the development.
“We are delighted with progress on our flagship asset, the Duyung PSC,” James Parsons said in the statement.
Parsons added that the teams would now move to finalise a long-awaited gas sales agreement which he says will be a significant milestone “on the path to building material value for our investors”.
“As demonstrated by the US$87mln NPV10 (net to Coro) reported in the CPR, recent structural increases in global gas markets very much now favour Coro Energy and the Mako gas field," Parsons said.