Conrad Asia Energy Completes Mako Farm-Down With US$320M Project Now Fully Funded
Key Takeaways
- MEMR approval granted 27 August 2026 triggered the US$4 million second tranche payment from NNB, confirming the Duyung farm-down is now legally complete.
- The Mako Gas Project is fully funded for its US$320 million development with no further equity raising required from Conrad, eliminating shareholder dilution risk for the project.
- Conrad retains a 22.875% operated participating interest in the Duyung PSC via WNEL Holdings, preserving both operatorship and direct exposure to future production cash flows.
- A third tranche of US$7 million from NNB is payable upon commencement of commercial production, representing a near-term cash catalyst tied to the Q4 2027 first gas target.
- A Reserves and Resources restatement is pending completion of the final Empyrean Settlement Agreement steps — a material disclosure event investors should monitor closely.
Duyung farm-down reaches completion as Mako funding locks in
Conrad Asia Energy (ASX: CRD) has completed the farm-down of a 75% non-operated Participating Interest in the Duyung Production Sharing Contract to PT Nations Natuna Barat (NNB), following approval from Indonesia’s Ministry of Energy and Mineral Resources (MEMR) granted on 27 August 2026. Completion of the transaction triggered the payment of a US$4 million second tranche from NNB. Mako is now fully funded for its US$320 million development, with first gas targeted in Q4 2027.
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Transaction structure and what Conrad receives
Three-tranche cash consideration from NNB
The total cash consideration for the NNB PI Transfer is US$16 million, structured across three tranches with additional recovery through production revenues:
- Tranche 1: US$5 million — received March 2026, triggered when the NNB PI Transfer became effective
- Tranche 2: US$4 million — received now, triggered by MEMR approval and completion of all conditions
- Tranche 3: US$7 million — payable upon commencement of commercial production
- Remainder — paid through production revenues until 75% of past costs have been recovered
Conrad’s retained position in Duyung PSC
As part of completing the NNB PI Transfer, Conrad previously acquired a 15% PI from Coro Energy plc and an 8.5% PI from Empyrean Energy plc. Upon completion of the final steps under the Settlement Agreement with Empyrean, including the issuance of an 8.5% equity interest in WNEL Holdings Pte Ltd to Empyrean, Conrad is expected to hold a 22.875% operated PI in the Duyung PSC via its interests in WNEL.
A restatement of Reserves and Resources will be issued upon completion of those transactions — a disclosure event investors should watch for. Critically, Conrad retains operatorship, which preserves direct control over the project’s development and execution.
| Party | Role | PI Transferred | Cash / Consideration | Status |
|---|---|---|---|---|
| PT Nations Natuna Barat (NNB) | Acquires non-operated PI | 75% non-operated PI | US$16M total (three tranches + past costs recovery) | Complete |
| Coro Energy plc | PI seller to Conrad | 15% PI acquired by Conrad | Settled | Complete |
| Empyrean Energy plc | PI seller to Conrad | 8.5% PI acquired by Conrad | 8.5% equity interest in WNEL Holdings Pte Ltd (pending issuance) | Final steps pending |
| Conrad Asia Energy | Operator and retained interest holder | 22.875% operated PI (post-completion, via WNEL) | Retains operatorship and exposure to production cash flows | Post-completion |
What the Mako Gas Project means for investors
Understanding Production Sharing Contracts and farm-downs
A Production Sharing Contract (PSC) is an agreement between a government and an exploration and production company to share revenues generated from hydrocarbon production. A farm-down is when a company sells a portion of its interest in such a project to a partner, typically in exchange for cash, carried development costs, or both.
This structure benefits Conrad by bringing in a funded partner (NNB) to share the capital burden of a US$320 million development without requiring Conrad to dilute its listed equity to fund the project. The arrangement provides funding certainty while preserving Conrad’s economic exposure to Mako’s future production revenues.
Mako’s strategic location and why Batam matters
The Mako Gas Field sits in the Natuna Sea, in the shallow offshore waters of Indonesia, and is described by the company as one of the largest gas discoveries in the region. Gas output is destined for power generation in Batam, which is emerging as a significant data centre hub in the region, connecting Mako directly to growing regional energy demand.
Conrad also holds exploration upside beyond Mako itself. The company has identified several large structures covered by a 3D seismic survey in the immediate area adjoining the Mako gas field within the Duyung PSC.
Peter Botten, Executive Chairman
“The completion of this transaction marks another significant milestone for Conrad and, importantly, for the Mako Gas Project. We have now successfully transformed Mako into a fully-funded development while retaining a meaningful economic interest and operatorship of the project. The partnership with Nations provides Conrad with the funding certainty required to progress the Mako development without the need for further equity funding for the project, while allowing us to retain exposure to the substantial cash flows expected from Mako production. With the project having reached FID earlier this year and development activities now well underway, our focus is firmly on safe and efficient execution towards first gas in the fourth quarter of 2027…”
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What comes next for Conrad
Final Investment Decision (FID) was reached earlier in 2026 and development activities are now well underway, with Conrad’s stated focus on safe and efficient execution. The company has confirmed it is fully funded for the US$320 million Mako development, with no further equity funding required for the project. First gas remains targeted for Q4 2027.
The third tranche of US$7 million from NNB is payable upon commencement of commercial production, representing a near-term cash catalyst once that threshold is reached. The pending Reserves and Resources restatement, triggered by completion of final Empyrean settlement steps, is another disclosure event that could materially update Conrad’s reported resource position.
Beyond Mako, Conrad has indicated it will continue evaluating the additional potential within the Duyung PSC, particularly the large structures identified by 3D seismic in the adjoining area.
Key milestones to watch:
- Final steps under the Empyrean Settlement Agreement (WNEL Holdings equity issuance)
- Reserves and Resources restatement
- Third tranche US$7 million receipt (triggered by commencement of commercial production)
- First gas — Q4 2027
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