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LONDON - Sunda Energy Plc (AIM:SNDA), an exploration and appraisal company focused on Southeast Asian gas assets, has confirmed funding arrangements for the upcoming drilling campaign at the Chuditch gas field, offshore Democratic Republic of Timor-Leste. The company’s subsidiary, SundaGas, has entered into a Farm-In agreement with TIMOR GAP, increasing the latter’s working interest from 40% to 70%. Concurrently, Sunda Energy has raised up to $9 million through convertible loan notes issued to three institutional investors.
The agreements are set to finance the drilling of the Chuditch-2 appraisal well, which is scheduled to begin in early Q3 2025. The capital raised will also cover related project costs. SundaGas retains operatorship of the project in partnership with TIMOR GAP, with the rig contract for Chuditch-2 nearing finalization.
The Farm-In agreement will reduce SundaGas’s share of costs from 80% to 30%, reflecting a shift in the working interest shares between the two entities. The agreement is subject to conditions, including the signing of a rig contract, shareholder approval at a general meeting scheduled for May 12, 2025, and regulatory approval by Autoridade Nacional do Petróleo.
The convertible loan notes arrangement involves a series of drawdowns, each worth $1.5 million, with a finance charge of 10%. Investors have the option to convert the loan notes into ordinary shares at a specified conversion price. Additionally, the company will grant warrants to investors upon each conversion.
The funding developments follow the termination of an exclusivity agreement with Pacific LNG Operations Pte Ltd. after unsuccessful discussions. The board of Sunda Energy views the Farm-In agreement with TIMOR GAP as the most viable path to timely drilling and in the best interest of the company and its stakeholders.
SundaGas is also working through approval processes for the drilling of Chuditch-2, including the submission of environmental documents currently in public consultation as of April 11, 2025.
This move to secure funding for the Chuditch-2 well is seen as a critical step in unlocking the value of the Chuditch gas field, which is of strategic national importance to Timor-Leste. The transactions are based on a press release statement from Sunda Energy Plc.
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