12 February 2019
Watson Farley & Williams (“WFW”) has advised AIM-listed E&P company Coro Energy Plc (“Coro”) on its acquisition of an interest in the Duyung Production Sharing Contract (“Duyung PSC”) in the West Natuna basin, offshore Indonesia, which contains the shallow water Mako gas field.
As part of the transaction, Coro will pay a total consideration of US$4.8m, comprising US$2.95min cash and US$1.85m in Coro shares, as well as contributing US$10.5m in partial funding for the 2019 drilling campaign for the Mako gas field, in order to acquire a 15% stake in the Duyung PSC from West Natuna Exploration Limited (“WNEL”), a private company which in turn is the 100% owner and operator of the Duyung PSC.
The shareholders of WNEL currently comprise Conrad Petroleum Limited (90%), a private company based in Singapore, and AIM-listed E&P company Empyrean Energy plc (10%).
An independent review by Gaffney Cline & Associates has ascribed gross 2C resources of 276 Bcf (48.78 MMboe) of recoverable dry gas in the Mako field, with gross 3C resources of 392 Bcf (69.3 MMboe) representing additional field upside. The field is located close to the West Natuna Transportation System, offering the potential to sell gas into the Singaporean market.
James Menzies, Coro’s CEO, commented: “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. The operator, Conrad Petroleum, has done a great job in bringing the project forward and advancing the technical understanding of the field and the surrounding prospects, and we are delighted to now be working with them. We see this as a potential hub for wider value creation in the region and look forward to reporting on our further progress shortly”.
The WFW team advising Coro was jointly led by Global Natural Resources Sector Head Jan Mellmann in London and Singapore Corporate Partner Nick Dingemans. They were assisted in London by Associate Jessica Lever and in Singapore by Associates Nana Taylor and Yen Lin Ee. Singapore law advice was provided by WFW’s Formal Law Alliance partners, Wong Tan & Molly Lim LLC. Ogier provided BVI law advice and Indonesian law advice was provided by Guido Hidayanto and Partners.
Jan commented: “We previously advised Coro on its reverse takeover and readmission to AIM in April 2018, which also marked the beginnings of its South East Asia strategy. We are therefore delighted that we could help Coro with this significant step in establishing and building their South East Asian portfolio, highlighting WFW’s position as a leading adviser to listed E&P companies”.
Nick added: “This transaction shows the ongoing importance of the South East Asian oil and gas sector and we are pleased to have been able to support Coro. The close collaboration between our London and Singapore based teams with Coro’s team in the UK and South East Asia was key to delivering this success for Coro”.