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Conrad Petroleum Announces the Completion of Internal Study and 3rd Party Audit Confirming Significant Resource Upgrade


SINGAPORE, 26 May 2020 - Conrad Petroleum Ltd the operator of Duyung PSC, offshore Indonesia, is pleased to announce the results of its internal subsurface study and a subsequent independent resource audit of the Mako gas field located within the license.

Following the successful drilling campaign completed in late 2019, Conrad carried out an internal, comprehensive field review that was concluded in April 2020. The review covered all subsurface and surface aspects of the development of the field and indicated significantly higher overall resource volumes than previous estimates, along with the potential for considerably higher daily production rates of high-quality dry gas.

Subsequently the Company engaged Gaffney Cline and Associates (“GCA”) to complete an independent resource audit for the Mako Gas Field.

GCA's audit, dated 22ndMay, 2020, confirmed Conrad's internal resource estimates and provided a significant upgrade for the Mako Gas Field compared to their previous audit of January 2019. The 2C (contingent) recoverable resource estimates have been increased to 495Bcf, an increase of approximately 79% compared with the 2019 audit. In the upside case, the 3C (contingent) resources have increased by approximately 108% compared with the 2019 audit. With the latest upgrade, Mako has been shown to be one of the largest gas fields ever discovered in West Natuna Basin, and is currently by far the largest undeveloped resource in the immediate area.

Results of the updated resource audit

The revised estimates of gross (full field) recoverable dry gas audited in the May 2020 GCA audit are:

Contingent Resource Estimate

January 2019 GCA Audit

May 2020 GCA Audit

Increase

 

Bcf

Bcf

%

1C (Low Case)

184

287

56

2C (Mid Case)

276

495

79

3C (High Case)

392

817

108

 

The full field resources above are classified in the May 2020 GCA audit as contingent. Gas volumes are expected to be upgraded to reserves when certain commercial milestones are achieved, including execution of a gas sales agreement and a final investment decision ("FID").

Miltos Xynogalas, CEO, commented:“The GCA audit results are extremely gratifying not only because they confirm the large resources of the Mako Field, but also because they endorse the high-quality technical work performed by Conrad. Over the last three years, the company drilled three successful wells and undertook numerous rigorous technical studies. Our efforts, supported by our joint venture partners, have proven the high value resources of the Mako accumulation and have brought the field closer to development. It is a tremendous achievement for a relatively young company such as Conrad to be able to identify and mature almost 0.5 Tcf of gas resources at Mako, resources that lie close to existing infrastructure and well-established gas markets. The Company is now positioned to take the project to FID, the next and very critical milestone in our road map to production.”

David Johnson, Executive Chairman, said:“Mako has the potential to deliver gas to address both the aspirations of the Indonesian government and pipeline gas needs of the Singaporean market. We look forward to the development of a domestic Indonesian market for West Natuna gas and are excited to work with Singapore to extend the fruitful partnership between Indonesian-based West Natuna producers and Singapore-based gas users.”

About the Duyung PSC

The Duyung PSC covers approximately 890 km2in the Riau Islands province, situated in the offshore Indonesian waters of the Natuna Sea. It is close to the West Natuna Transportation System (WNTS), a natural gas pipeline connecting three producing blocks in Natuna Sea to Singapore. WNTS currently supplies approximately 0.4 billion cubic feet (Bcf) of natural gas per day to Singapore. Conrad is the operator and owns a 76.5% participating interest in Duyung. Its partners Coro Energy Plc and Empyrean Energy Plc own participating interests of 15% and 8.5%, respectively.

About Conrad Petroleum

Conrad Petroleum is a private oil and gas upstream company domiciled in Singapore with operational headquarters in Jakarta, Indonesia. The Company has an asset base focused on the shallow waters offshore Indonesia, predominantly targeting natural gas near existing infrastructure. Conrad Petroleum is the holder and operator of three Production Sharing Contracts (PSCs) in offshore Indonesia: Duyung PSC (76.5% WI), Offshore North X-ray PSC (100% WI) and Offshore Mangkalihat PSC (100% WI). More information on the Company can be found at www.conradpetro.com.

The volumes included in this announcement are in accordance with SPE standards. Bcf means billion standard cubic feet of gas; and MMscf/d means million standard cubic feet of gas per day.



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