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WFW Advises Coro Energy on completion of acquisition of stake in Duyung PSC1 June 2020

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Watson Farley & Williams (“WFW”) is delighted to have advised AIM-traded Coro Energy plc (“Coro Energy”) on the completion of its acquisition of a 15% stake in the Duyung Production Sharing Contract (“Duyung PSC”) in the West Natuna basin, offshore Indonesia, which contains the shallow water Mako gas field, from West Natuna Exploration Limited (“WNEL”).

Coro Energy paid US$4.8m for its stake in the Duyung PSC, comprising US$2.95m in 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. WFW also advised Coro Energy on its €22.5m three-year Eurobond issue used to finance the Duyung PSC acquisition as well as fund its continuing operations in the region (see more here).

A recent independent review by Gaffney Cline & Associates (“GCA”) confirmed a significant resource upgrade for the Mako Gas Field compared to their previous resource assessment released in January 2019 (the “2019 GCA Audit”). 2C (contingent) recoverable resource estimates have been increased to 495 Bcf, an increase of approximately 79% compared with the 2019 GCA Audit. In the upside case, the 3C (contingent) resources have increased by approximately 108% compared with the 2019 GCA Audit and are also higher than the 3C estimate announced on 14 April 2020. With GCA’s confirmation of the latest upgrade, the Mako Gas Field has, on a 2C (contingent) resource basis, been shown to be one of the largest gas fields ever discovered in the West Natuna Basin and is, so Coro Energy believes, currently the largest confirmed undeveloped resource in the surrounding area. The Mako field is located close to the West Natuna Transportation System, offering the potential to sell gas into the Singaporean market.

UK-headquartered Coro Energy is a PI-centric mid-tier international upstream oil & gas exploration company focussed on South East Asia. The other partners in the Duyung PSC comprise the operator Conrad Petroleum Limited (76.5% operated interest), a private company based in Singapore, and AIM-listed E&P company Empyrean Energy plc (8.5% non-operated interest).

The WFW team advising Coro Energy was jointly led by Global Mining & Commodities Sector Head Jan Mellmann in London and Singapore Corporate Partner Nick Dingemans. They were assisted by London Associates Clementine Freeth and Sebastian Lello.

Jan commented: “I am delighted that we were able to assist Coro Energy on completing this key acquisition which is core to its South East Asian expansion strategy. That they chose us to do so demonstrates once again WFW’s standing as a leading law firm for complex, multi-jurisdictional energy deals”.

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