Conrad Asia Energy Secures Over 90% of Mako Gas Project Capital Contracts Valued at US$290 Million

Mako Gas Project Capital Contracts Surpass 90% Threshold

Conrad Asia Energy's subsidiary, West Natuna Exploration Limited (WNEL), has executed binding contracts and issued letters of award covering more than US$290 million of the Mako Gas Project’s capital costs. This milestone represents over 90% of the total estimated capital expenditure of US$320 million, consistent with earlier company guidance. The secured contracts include key components such as the SURF (subsea, umbilicals, risers, flowlines) EPCI contract, CSF (conductor support frame) EPCT contract, MOPU (mobile offshore production unit) lease, and drilling rig engagement.

This contracting achievement signals significant progress towards full project mobilisation. Milestone payments have commenced, reflecting active onsite work and capital commitment. Maintaining the project cost estimate at US$320 million, the remaining 10% of capital expenditure is allocated for smaller ancillary items and contingencies, ensuring flexibility without exceeding the budget.

Mako Project Fully Funded, On Schedule for Q4 2027 First Gas

Conrad confirmed the Mako Gas Project is fully financed, including a substantial contingency reserve, enabling progress without the need for equity dilution or additional fundraising at this stage. This financial positioning mitigates risks related to cost overruns or schedule delays through prudent planning.

The targeted first gas production in the fourth quarter of 2027 marks a pivotal transition from development to production, positioning the Mako field to contribute revenue to Conrad. The combination of secured contracts, full funding, and a defined production timeline offers transparency for stakeholders monitoring the project’s commercial progress.

Completion of West Natuna Transportation System Hot Tap Connection

During the quarter, PT PLN Energi Primer Indonesia (PLN EPI) completed a specialized "hot tap" connection linking the West Natuna Transportation System (WNTS) to the Pemping gas pipeline. This connection serves as the delivery point for Mako gas to Batam and the wider Indonesian domestic market. The hot tap technique enables connection to an active pipeline without interrupting gas flow.

This complex engineering operation was conducted on a pipeline transporting approximately 300 million standard cubic feet per day (mmscfd) at 1,096 psi pressure and 29 metres underwater depth. Conrad described this as one of the most technically challenging phases of pipeline installation. The successful connection establishes critical infrastructure for delivering Natuna gas to Indonesia’s domestic market, enhancing energy security and supporting producers like Conrad in the West Natuna Basin.

Mako Gas Field Recognized with 20 mmboe 1P and 29 mmboe 2P Reserves

For the first time, Conrad booked reserves for the Mako Gas Project, reporting 1P (proved) reserves of 20 million barrels of oil equivalent (mmboe) and 2P (proved and probable) reserves of 29 mmboe, attributable to its 76.5% participating interest in the Duyung Production Sharing Contract as of year-end 2025. This reserve recognition formally validates the field’s hydrocarbon resources and underpins confidence in advancing to production.

Following planned transactions—including the transfer of Coro Energy's 15% and Empyrean's 8.5% participating interests to Conrad, Conrad’s 75% interest to Nations Natuna Barat, and issuance of 8.5% equity in WNEL Holdings to Empyrean—Conrad will hold a 22.875% operated effective interest in the Duyung PSC via WNEL. A reserve restatement will be issued post-transaction completion, providing updated valuation and resource insights ahead of production.

Mako Field: Largest Undeveloped Gas Asset in West Natuna Basin

Situated in the Duyung Production Sharing Contract approximately 100 kilometres north of Matak Island and 400 kilometres northeast of Batam in Indonesian waters, the Mako Gas Project lies in about 91 metres of water depth. The development plan includes six wells tied back to a leased Mobile Offshore Production Unit (MOPU) designed for 172 mmscfd capacity.

Conrad leadership described Mako as the largest undeveloped gas field in the West Natuna Basin. Production commencing in late 2027 is expected to significantly support energy needs in Batam and Sumatra. Recent regional data centre developments highlight growing energy demand. Sales gas will be transported via a 59-kilometre 18-inch pipeline to the KF platform in the Kakap PSC, then through the WNTS pipeline to the Indonesian domestic market. Gas volumes and transportation tariffs have been agreed with SKK Migas and the WNTS Joint Venture, with a formal Gas Transportation Agreement executed during the quarter.

Milestone Payments Signal Progress on Major Development Contracts

Following contract signings and award letters for major project components, Conrad has commenced milestone payments to contractors. While specific payment details were not disclosed, these payments indicate movement from contracting into active execution and procurement phases.

Ongoing activities include equipment manufacturing, engineering design, and supply chain mobilisation for subsea systems, conductor support frames, the MOPU, and drilling rig. These financial commitments reinforce the company’s goal of achieving first gas by Q4 2027.

Leadership Changes: CEO Transition and Executive Chairman Appointment

Conrad announced a leadership restructure with CEO Miltos Xynogalas stepping down effective 31 August 2026 after completing the Mako farm-out and partnership formation with Nations Natuna Barat. Miltos will assume a new executive role focusing on Indonesian business operations, partner relations, business development, and government engagement.

Peter Botten was appointed Executive Chairman, tasked with overseeing Australian capital markets engagement, investor relations, Mako development through first gas, and advancing Conrad’s Aceh assets. The company has initiated a search for a new CEO. Miltos noted strong shareholder support at the June AGM as an endorsement of the company’s strategic direction. The board restructure aims to enhance operational execution in Indonesia and deepen Australian market engagement.

Regulatory Approvals Advancing for Participating Interest Transactions

Conrad received approval from Indonesia’s Ministry of Energy and Mineral Resources (MEMR) for the transfer of Empyrean’s 8.5% participating interest, part of a prior settlement agreement. Approval for the farm-down of a 75% participating interest to Nations Natuna Barat is expected imminently. These regulatory consents are essential to finalizing capital structure adjustments that will define Conrad’s effective operating interest in the Duyung PSC.

The sequential regulatory approvals demonstrate active engagement with Indonesian authorities and progress toward transaction completion. Upon finalization, Conrad’s operated effective interest will adjust to 22.875% via WNEL, down from the prior 76.5%.

Strategic Importance: Indonesia’s Growing Gas Demand and Energy Security

Conrad highlighted the strategic environment underpinning its Indonesian gas projects, emphasizing that global energy shifts have intensified focus on domestic supply security, enhancing the commercial relevance of its Indonesian gas assets. The company noted that natural gas is central to decarbonization and energy security efforts, with governments and utilities accelerating supply commitments.

This context positions the Mako Gas Project and Aceh portfolio as key contributors to regional energy transition and geopolitical supply stability. Conrad portrays itself as a developer nearing production, delivering Mako, unlocking Aceh’s potential, and evolving into a significant regional gas producer. The recent WNTS hot tap connection and planned first gas in Q4 2027 align with Indonesia’s domestic energy priorities. Additionally, potential data centre developments in Batam underscore increasing regional gas demand supporting future Mako sales.