Empyrean Energy advises that Conrad Asia Energy and its wholly owned subsidiary West Natuna Exploration ("WNEL") have signed an agreement with PT Nations Natuna Barat ("Nations"), a subsidiary of the Arsari Group, to farm into the development of the Mako gas field in the Duyung ("Duyung") Production Sharing Contract ("PSC") and provide financing for 100% of project development costs and associated working capital.

Highlights

• Conrad, WNEL and Nations have signed definitive documentation for Nations to acquire a 75% non-operated Participating Interest ("PI") in the Duyung PSC. Following the Transaction, WNEL will retain a 25% PI, which is expected to be fully carried through Mako commercial production (subject to Indonesia government approvals).
• Under the Transaction, Nations will fund its 75% portion of all future costs under the PSC, including the development of Mako, and has agreed to carry WNEL's portion of estimated project costs through the first phase of Mako development. A Carry Loan Agreement ("CLA") will govern the repayment of WNEL's proportionate funding to Nations, with such repayments funded out of WNEL's share of production revenues. Disbursements for long lead items have already commenced.
• Nations will pay WNEL a consideration which includes US$16 million for its 75% PI, to be settled in three tranches of US$5 million, US$4 million, and US$7 million, the first to be paid out on meeting certain conditions precedent expected by 1Q2026, the second tranche to be paid on completion of the Transaction expected by 3Q2026 and the third at the date of first commercial production expected in 4Q2027, respectively.
• WNEL is entitled to recover 75% of its agreed historical costs in the PSC after repayment of the CLA.
• Overall capital expenditures to bring the field to first gas are estimated to be US$320 million, in line with previous advice. The CLA provides sufficient funding for WNEL's portion of development costs, including downpayments, contingencies for cost overruns, interest during construction, and working capital. First gas from Mako remains on track for delivery in the 4th quarter of calendar year 2027.
• As the operator of the Duyung PSC, WNEL, working closely with Nations, will continue to be responsible for the development and production of the Mako gas field, leveraging off WNEL's intimate knowledge of the field.
• WNEL has previously announced the acquisition of Coro Energy Duyung (Singapore) Pte. Ltd.'s ("Coro") 15% PI in Duyung, which is pending completion.
• On 17 November 2025, WNEL issued a proposed withdrawal notice to Empyrean, as announced by Empyrean. The intended effect of the Notice is that Empyrean is deemed to have proposed to withdraw under the joint operating agreement governing Duyung PSC ("JOA") and Empyrean's participating interest is deemed to have been transferred to WNEL. As noted in its announcement on 17 November 2025, Empyrean's position is that the dispute-resolution process is active and ongoing and no such remedies may be exercised under the JOA. Empyrean reiterates that it is confident in its view that there was no basis to issue the Notice and will take all necessary action to defend its position.
• Empyrean remains committed to a cooperative, commercial and transparent resolution of the dispute and continues to reserve all of its rights in respect of any loss, damage or costs arising from actions by WNEL/Conrad that Empyrean considers to be contrary to the JOA or associated agreements.
• Transaction completion is expected prior to a long-stop date during Q3 2026, unless otherwise agreed.

Empyrean Executive Director and Interim CEO Gaz Bisht commented:
"We are pleased to see that Conrad has reached agreement on the farm-down and secured funding for the development of Mako. This is an important milestone for Empyrean as well, given our long-standing involvement in the asset-from discovery through appraisal and now into the development phase."

"However, we are disappointed with Conrad's release today, particularly as we have been engaging actively and constructively to resolve the cash-call dispute. As reaffirmed in our market announcements of 18 November 2025 and again today, Empyrean strongly disputes the validity of the Notice of Forced Withdrawal issued by Conrad. Under the terms of the JOA, the dispute resolution process relating to the outstanding cash calls remains ongoing, and no such remedy can be exercised while that process is underway."

"Empyrean has nonetheless continued discussions with WNEL in good faith and remains open to further dialogue to resolve the dispute and to agree the basis of its ongoing participation in the Mako project."

KeyFacts Energy: Empyrean Energy Indonesia country profile