Sunda Energy Plc the AIM-quoted exploration and appraisal company focused on gas assets in Southeast Asia, is pleased to announce its unaudited interim results for the six months ended 30 June 2024.
Chief Executive's Statement
The first half of 2024 was a period of significant change and progress for the Company, with a change of name, several appointments to the board of directors of the Company (the "Board") and a new strategy focussed solely on Southeast Asia. Key highlights from the period are described below:
Timor-Leste TL-SO-19-16 PSC ("Chuditch PSC" or "PSC") (Sunda 60% interest)
On 8 February 2024, the Company announced the completion of a Farm-Up Agreement between Sunda's wholly owned subsidiary SundaGas Banda Unipessoal, Lda. ("SundaGas") and TIMOR GAP Chuditch Unipessoal Lda ("TIMOR GAP") in relation to the Chuditch PSC. As part of the Farm-Up arrangements, TIMOR GAP made a cash payment to SundaGas of c.US$1 million to cover back costs. SundaGas retains operatorship of the Chuditch PSC and holds a 60% working interest. TIMOR GAP has a 40% interest, made up of a working interest of 15%, plus its original 25% interest which is carried to first gas. From completion of the Farm-Up Agreement, TIMOR GAP is responsible for paying 20% of all costs in relation to the PSC, including the drilling of the planned Chuditch-2 appraisal well.
On 19 June 2024, Contract Year Three of the PSC commenced. This phase of the contract contains a commitment to drill a well to appraise the Chuditch gas discovery, following the successful conclusion of earlier 3D seismic reprocessing works which demonstrated Chuditch to be a field of significant scale, interpreted to be more than 20 km long and 150m in vertical relief, with a Pmean Contingent Resource of 1.16 Tcf of gas.
Throughout the period, operational planning for the drilling of the Chuditch-2 appraisal well continued in earnest. As announced by the Company on 16 April 2024, SundaGas completed a site survey at the planned location of the Chuditch-2 appraisal well. The well will be situated 5.1km from the original Chuditch-1 discovery well in a water depth of approximately 68m. The predicted vertical column height of gas in the Jurassic reservoirs at this location is 149m.
Sunda's experienced in-house drill team have conducted extensive design studies for the Chuditch-2 well construction and planned production flow test (DST). Workshops have been held (and are continuing on a regular basis) with Timor-Leste's National Petroleum Authority ("ANP") and joint venture partner TIMOR GAP. Negotiations to secure the use of a drilling rig are ongoing and progressing well. Regulatory approvals for the procurement, temporary importation and permitting of the drilling rig and all other required equipment and services are ongoing, along with the environmental permitting process. The Company welcomes the strong collaboration with ANP and joint venture partner TIMOR GAP through all the operational planning activities.
Through the period, Sunda has been engaged in discussions with a number of potential funding partners with an interest in participating in the Chuditch PSC project. Post period end, it was announced on 12 August 2024 that these discussions had advanced with a number of parties, and in particular that the Company had entered into an exclusivity agreement (the "Exclusivity Agreement") with Pacific LNG Operations Pte Ltd ("Pacific LNG"), a privately owned Singaporean investment company with significant experience in resource projects in Asia-Pacific. The Exclusivity Agreement contains carve-outs for several other potential funding partners (the "Other Parties"). Discussions with Pacific LNG and the Other Parties are ongoing, but there can be no guarantee that a definitive funding agreement will be entered into with any party, nor can there be any guarantee on the terms, structure or timing of any potential investment.
Offshore UK Licence P2478 (Dunrobin)
On 31 March 2024, offshore UK Licence P2478 was surrendered to the UK North Sea Transition Authority ("NSTA"), following delays to the acquisition of 3D seismic data that had been stipulated in the terms of an extension to Phase A of the licence. The delays largely resulted from the continuous wind farm construction activities in the area. The Company had held a 32% non-operated interest in the licence. All of Sunda's commitments on the licence had been fulfilled and a relinquishment report was submitted.
New Ventures
During the period, the Company had an outstanding application in the United Kingdom offshore 33rd Round of licensing, conducted by the NSTA. On 7 May 2024, the Company announced that it had been informed by the NSTA that its application had been unsuccessful. This marked the end of the Company's involvement in the UK sector, with all new venture activities subsequently focussed on the Southeast Asia region.
With Sunda's new strategic focus exclusively on Southeast Asia, the Company began actively screening new business opportunities in the region, targeting opportunities to secure significant interests in material gas assets with low costs of entry. Post period end on 28 August 2024, Sunda announced that, it had submitted two applications in the 1st Conventional Energy Bid Round of the Bangsamoro Autonomous Region of Muslim Mindanao ("BARMM") in the Philippines, as a non-operating joint venture partner. If successful, Sunda expects to hold a 37.5% non-operated interest in any resulting service contracts that are awarded, with announcements on the award expected during Q4 2024. Several other opportunities are being actively evaluated, albeit the Company remains strongly focussed on its upcoming appraisal activities in Timor-Leste.
Financial Position
The net loss after finance costs and tax of £910,000 (30 June 2023: net loss of £847,000; year to 31 December 2023: net loss of £1,712,000), represented a loss of 0.004p per share (30 June 2023: 0.004p; year to 31 December 2023: 0.009p).
In February 2024, the Company raised £2,993,000 net (£3,264,000 gross) from the issue of new share capital by way of a Placing, Subscription and WRAP Retail Offer.
Available cash (excluding monies held as security for the Bank Guarantee in Timor-Leste) as at 30 June 2024 was £4,545,000 (30 June 2023: £4,619,000; 31 December 2023: £3,760,000).
During June 2024, the Bank Guarantee for the Chuditch PSC was increased from US$1.0 million to US$2.5 million (net US$2.0 million) as the Company prepared to enter Contract Year 3 of the PSC, with its increased work commitments. The new Bank Guarantee was issued by Banco Nacional de Comércio de Timor-Leste ("BNCTL"), a bank wholly owned by the government of Timor-Leste. The use of BNCTL is part of the Company's commitment to maximising local content inside Timor-Leste, but also indicative of its objective to broaden its business partnerships in-country.
Changes to Board and Company Name
A number of changes to the Board were effected during the period. On 15 March 2024, Andy Yeo resigned as CEO and Andy Butler was appointed in his place. Andy Yeo ceased to be a director on 1 April 2024. On 22 April, John Wakefield resigned from the Board and Gerry Aherne was appointed as new Independent Non-Executive Chairman. In addition, on that date John Chessher was appointed as an Independent Non-Executive Director. At the end of April, former Technical Director Jon Ford stepped down from the Board and was retained in a part-time consultancy role. After the period, on 12 August 2024, it was announced that Rob Collins had been appointed to the Board, following his earlier engagement as Chief Financial Officer. The Company now has a fully refreshed and strong Board that has deep and broad experience in natural resources, corporate finance and compliance. Information on all current directors is available on the Company's website www.sundaenergy.com.
At the Annual General Meeting on 21 June 2024, it was resolved to change the name of the Company from Baron Oil Plc to Sunda Energy Plc. This name change, announced as effective on 5 July 2024, is reflective of the Company's new strategy to focus exclusively on the Southeast Asia region, particularly on gas assets and opportunities.
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules - Note for Mining and Oil and Gas Companies, the technical information and resource reporting contained in this announcement has been reviewed by Dr Andy Butler, Fellow of the Geological Society of London and member of the Society of Petroleum Engineers. Dr Butler has more than 28 years' experience as a petroleum geologist. He has compiled, read and approved the technical disclosure in this regulatory announcement and indicated where it does not comply with the Society of Petroleum Engineers' standard.
Gerry Aherne, Sunda Energy Chairman, commented:
"The Company has made significant change and progress in the reporting period. The change of the Company's name to Sunda Energy reflects our new strategic focus solely on Southeast Asia and this strategy is being implemented by a refreshed Board with a deep and broad experience in natural resources and corporate finance. We are primarily focused on our upcoming appraisal activities on the Chuditch field in Timor-Leste and are currently progressing funding arrangements to enable the drilling of the Chuditch-2 appraisal well. At the same time, we are actively pursuing a business development strategy to target assets of similar materiality, in line with the Company's goal of building a substantial energy business in the Southeast Asian region. I look forward to providing further updates as we progress."
