UK-Listed Coro Buys Stake in Indonesian Asset

AIM-listed Coro Energy has bought a 15% stake in the Duyung production sharing contract in the West Natuna basin, offshore Indonesia which contains the Mako gas field.

Coro has signed a binding conditional agreement with West Natuna Exploration (WNEL), which is 100% owner and operator of the Duyung PSC, Coro said February 11. The shareholders of WNEL are Singapore-based Conrad Petroleum (90%) and the AIM-listed Empyrean Energy (10%).

Coro will pay a total of $4.8mn, comprising $2.95mn in cash and $1.85mn in shares, plus $10.5mn in partial funding of the 2019 drilling programme for a 15% interest, representing an effective acquisition price of $0.34/mn Btu on a 2C basis. The cash and share component of the consideration will be paid pro rata to the existing owners of WNEL, Conrad and Empyrean, who will become direct shareholders in the field.

After the deal, the owners of the Duyung PSC will be Conrad (76.5%), Empyrean (8.5%) and Coro (15%).

"Mako is a high quality asset with a great address: a large undeveloped resource in a prolific basin and close to existing infrastructure with capacity, providing access to a hungry market in Singapore. We are also excited by the exploration potential to more than double the size of the resource - this is very significant, high-value, low-risk step-out exploration located above and beneath the field itself,” said Coro CEO James Menzies.

This is the second time Coro has bought stake in an Indonesia asset. In September last year, it entered Indonesia with the acquisition of a 42.5% interest in the Lengo gas field, offshore East Java. Lengo field is in the shallow water Bulu production-sharing contract.

“Following on from Coro's entry into the Bulu gas field earlier this year, the company's next step is directly in-line with its strategy of building a southeast Asian portfolio of fields with associated exploration upside. Coro intends to further build on these positions in the East Java and West Natuna basins and to continue to seek out these value accretive deals,” it said.

Empyrean said it would receive cash consideration of $295,000 and consideration shares with a value of $185,000.