Rig activity overruns defer UK firm’s drilling ops on gas field offshore Timor-Leste

UK-based and AIM-listed Sunda Energy, former Baron Oil, has disclosed a new timeline for the drilling of an appraisal well at a gas field off the coast of Timor-Leste.

Sunda Energy, which sees some downward pressure on pricing in the global market for jack-up drilling rigs with more units expected to shortly become available, claims that it continues to seek to achieve the best deal for the procurement of the drilling rig, with “significant progress” made in the negotiations for its preferred one.

While contract discussions are said to be at an advanced stage and deals nearly complete for all key long lead drilling equipment items, the firm remains focused on a drill date for the Chuditch-2 appraisal well at the earliest opportunity next year. However, the drilling is now anticipated to start in Q2 2025 instead of Q1, with slippage in the schedule principally perceived to be the result of overrunning drilling activities of other operators using the company’s preferred rig.

“All other aspects of operational planning are progressing well. Extensive geological and engineering studies in support of drilling operations are ongoing, addressing all aspects required to achieve operational objectives including well testing, whilst avoiding geological hazards and focussing throughout on health, safety and environmental protection,” highlighted the UK player. 

Furthermore, Sunda is preparing to acquire an environmental baseline survey as a key part of the ongoing process of environmental licensing preparations for the Chuditch-2 appraisal well. Depending on vessel availability, the survey is slated to take place during Q4 2024.

Southeast Asia-focused firm claims that the proceedings with Pacific LNG continue to move forward for funding the appraisal and development of the Chuditch production sharing contract (PSC), also known as TL-SO-19-16 PSC and Chuditch PSC area. The proposed funds to be raised from Pacific LNG’s investment are anticipated through an equity issuance in the firm’s subsidiary company and not at the Sunda Energy level.

Dr Andy Butler, Chief Executive Officer, commented: “We are pleased with the continued progress being made at our Chuditch PSC project as we move towards drilling Chuditch-2. We remain confident that our ongoing discussions with Pacific LNG, combined with our strong government relationships in Timor-Leste, will enable us to deliver on the project’s significant potential.

“We thank our government partners in Timor-Leste for their continued co-operation and support. I look forward to providing investors with further updates as we continue to progress Sunda’s development of the Chuditch PSC.”

As appraisal drilling on the Chuditch field approaches, the company confirms it is actively engaged with the government of Timor-Leste regarding the potential future development and export of Chuditch PSC gas. Currently, the firm is awaiting news about Philippines license awards for the two offshore licenses it applied for in the Sulu Sea, known as PDA-BP-2 and PDA-BP-3. More information about this is anticipated during Q4 2024.

According to Sunda Energy, one of the blocks contains several material gas discoveries whilst the overall fairway holds upside potential which the company hopes to evaluate following the award if successful. The applications were made as part of a joint venture consortium in which Sunda has a 37.5% non-operated interest. This joint venture was the sole bidder for these application blocks, thus, this raises the firm’s chances for the potential upcoming award.

“Beyond Timor-Leste, we look forward to receiving news on the awards of licences we applied for in the Philippines. As ever, we will continue to explore new venture initiatives in the wider Southeast Asian region as we look to grow an exciting portfolio of high-quality gas assets,” highlighted Butler.