Empyrean Energy Plc entered a sale and purchase agreement (SPA) to conditionally acquire a shareholding of up to 20% in West Natuna Exploration Ltd. (WNEL) from Conrad Petroleum Pte Ltd., the owner of WNEL that holds full participating interest in the Duyung PSC, which includes the Mako shallow gas discovery offshore Indonesia, according to an April 4 press release.

The shallow gas discovery could contain 400 billion cubic feet (Bcf) of gas in place to 1.3 Bcf. The Duyung PSC is an offshore permit in the West Natuna Basin, in 60 m to 110 m of water. West Natuna Basin is one of Asia's most prolific proven basins, the press release said.

The permit contains several other drilling opportunities.

The press release said that a new well on the Mako discovery, the Mako South­1 Well, will be spudded in either late second-quarter or early third-quarter 2017, targeting the Intra­Muda sands.
The total costs of the Mako South­1 Well are estimated at US$6.5 million.

The press release noted that three previous wells drilled at Mako in 1975, 1996 and 1999 intersected the gas zones, but were not flow tested. Two of these wells were targeting deeper oil and the third well, targeting gas, encountered technical difficulties and so no flow test was completed.

In 2017, LEAP Energy subsurface consulting and technology delivery group completed a report on the Mako discovery, attributing 2C and 3C resources of 433 Bcf and 646 Bcf recoverable gas, respectively.

When the acquisition is complete, Conrad Petroleum will retain 80% share in WNEL and will remain the operator of the Duyung PSC.

Under the terms of the SPA, Empyrean will pay Conrad Petroleum an initial cash consideration of US$2 million immediately upon signing a shareholders’ agreement. Conditional on completion, Empyrean agreed to pay a further US$2 million by May 12, the press release said.

Offshore