UK-based and AIM-listed Sunda Energy, former Baron Oil, has set the wheels in motion to ensure its drilling plans for an appraisal well at a gas field off the coast of Timor-Leste can move forward by reaching a non-binding letter of intent (LOI) with an undisclosed drilling contractor regarding commercial negotiations for a definitive deal.
Sunda Energy confirmed in October 2024 that it was continuing to seek the best deal for the procurement of a rig to drill the Chuditch-2 appraisal well, which is part of the Chuditch production sharing contract (PSC), also known as TL-SO-19-16 PSC and Chuditch PSC area, at the earliest opportunity.
The firm bumped its timeline to 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.
The AIM-quoted exploration and appraisal player focused on gas assets in Southeast Asia has now confirmed that its wholly owned subsidiary, SundaGas Banda Unipessoal, has entered into a non-binding LOI with an unnamed drilling player to finalize the details for the use of a jack-up rig, located in the region, to carry out the appraisal drilling campaign on the Chuditch field off the coast of Timor-Leste.
According to Sunda, this LOI enables it to progress regulatory approvals for the use of the jack-up rig in Timor-Leste, including the preparation of the required drilling safety case and other campaign-specific documentation. The chosen jack-up is expected to finish its ongoing work in the region before becoming available for Chuditch appraisal drilling in Q2 2025, in line with the firm’s recently amended schedule.
Dr. Andy Butler , Chief Executive Officer, commented: “Today’s news of this letter of intent is an important step towards our forthcoming appraisal drilling campaign on the Chuditch Field. We are pleased to be working with a leading offshore drilling contractor that can provide us with a rig that meets all our required specifications.”
However, the entry into the definitive agreement will be subject to standard conditions. This includes mandatory regulatory approval from Autoridade Nacional do Petróleo (ANP). This is the upstream regulator, which acts on behalf of Timor-Leste’s Ministry for Petroleum and Mineral Resources.
Furthermore, SundaGas has highlighted that it is liaising closely with ANP in its drilling preparations and is committed to ensuring the Chuditch appraisal campaign gets carried out in line with the work program and budget approved by the regulator. The LOI also contains other customary provisions.
The company further emphasizes that there can be no guarantee that a definitive agreement will be entered into between SundaGas and the drilling contractor, even though negotiations are ongoing.