Mako PSC Revised Gas Sales Arrangements

12 March 2025

This announcement contains inside information

Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil & Gas

Empyrean Energy PLC ('Empyrean' or 'the Company')

Mako PSC Revised Gas Sales Arrangements

Empyrean Energy plc ("Empyrean" or the "Company"), the oil and gas development company with interests in Australia, Indonesia and the United States, is pleased to announce that Conrad Asia Energy Ltd (ASX: CRD) ( "Conrad"), the operator of the Mako Gas Field in Indonesia ("Mako") has received a Directive from the Indonesian Ministry of Energy and Mineral Resources ("MEMR"), including that:

· Due to the very strong growth in domestic demand for gas in Indonesia, the Indonesian MEMR has directed that all Mako gas (plateau sales gas rate of 111 billion British Thermal Units per day ("Bbtud")) be made available for the Indonesian domestic market in Batam with the gas to be purchased by PT PLN Energi Primer Indonesia ("PLN EPI" or "PLN") a wholly owned subsidiary of PT Perusahaan Listrik Negara (Persero) ("PLN Persero").

· PLN Persero is the Indonesian state-owned electric utility company, wholly-owned by the Government of Indonesia through the Ministry of State-Owned Enterprise. The organisation has over 7,000 power plants supplying over 89 million customers and sells over 288,000 GWh of electricity annually.

· Empyrean holds an 8.5% operating interest in the Duyung Production Sharing Contract ("PSC") in which Mako is located, offshore in the West Natuna Sea, Indonesia.

· The Mako gas price will be linked to the Indonesian Crude Price ("ICP"), which is akin to Brent oil-linked Liquified Natural Gas("LNG") pricing. This structure will be economically equivalent to the pricing previously approved for Mako gas to be sold both domestically and for export, thereby underpinning the value of gas from Mako.

· As a result of the MEMR Directive, Conrad is working to finalise a Gas Sales Agreement ("GSA") with PLN. Conrad is coordinating closely with PLN and SKK Migas (the upstream regulator), who collectively have targeted that a GSA with PLN will be finalised during March 2025 and be signed in the coming weeks.

· In addition, MEMR has revoked its earlier allocation and pricing Directive to sell Mako gas to PT Perusahaan Gas Negara Tbk ("PGN") and Sembcorp Gas Pte Ltd. ("Sembcorp"). The GSAs with PGN and Sembcorp will subsequently be terminated.

· The new Government of Indonesia is formulating its New Energy Plan 2024-2034 (or "New RUPTL") under which it will prioritise gas exploration and production to meet rapidly rising domestic energy demand. Around 15 Gigawatts ("GW") of gas power capacity across Indonesia is planned to be built until 2034, especially to support the base load capacity.

· The MEMR Directive is anticipated to support potential farmout arrangements in Duyung and Financial Investment Decision ("FID") for Mako.

Empyrean CEO, Tom Kelly, stated: 'With a new government in Indonesia committed to providing gas powered electricity under its New Energy Plan, directing Mako Gas for the domestic market makes strategic sense. Empyrean is encouraged that this new development will lead to further short term momentum for the Mako Gas Field and Duyung PSC.'

Additional information

As part of the Mako project Conrad has announced that it understands that MEMR will direct PLN to build the required approximately 7 kms gas spurline with an investment value of approximately US$50 million to link the West Natuna Transportation System ("WNTS") with Pemping Island and subsequently to markets in Batam. The building of the pipeline and anticipated significant growth in gas demand, provides a spur to future exploration of the Duyung PSC Prospective Resources and gives a ready means to commercialise additional gas volumes.

Natural gas is an essential transition fuel in the energy mix across Asia and the sale of all Mako's contingent resources gas resources represents an important project in Asia. Mako is one of several gas resources in Conrad's Asian portfolio as it continues to pursue the development of gas across the region.

The MEMR Directive is an important step in the commercialisation of Mako field, the largest undeveloped gas field in the West Natuna Sea.

The Mako Joint Venture partners and their respective interests are :-

Empyrean Energy plc 8.5%

Conrad Asia Energy Ltd 76.5%

Coro Energy Plc 15%

Duyung PSC - Mako Gas Field EME 8.5% Participating Interest

Empyrean holds an 8.5% operated interest in the Duyung PSC. Duyung is located in the Riau Islands Province, Indonesian waters in the West Natuna area, approximately 100 km to the north of Matak Island and 400 km northeast of Singapore. The Mako field contains 2C Contingent Resources (100%) of 376 billion cubic feet ("Bcf"), and is scheduled to begin production in 2026. The West Natuna Sea has been supplying Singapore with natural gas for more than two decades and Mako is expected to extend this supply for at least another decade via the existing transportation system.

The contract term is until the end of the Duyung PSC in January 2037 and allows for the sale of plateau gas rates of 111 Bbtud which is equivalent to around 111.9 mmscfd. The contract is for the entirety of Mako's 2C Contingent Resources.

The gas price will be linked to the Indonesian Crude Price ("ICP"), which is akin to Brent oil linked LNG pricing and will be economically equivalent to the pricing agreed approved earlier for Mako gas to be sold both domestically and for export, thereby underpinning the value of gas from Mako. This reflects the growing Indonesian domestic demand for gas.

The terms of the GSA are confidential. A formal signing ceremony, in the presence SKK Migas representatives, will be arranged at a later date.

In parallel, Conrad have advised that negotiations on the sale/ farmout of some of Conrad's Participating Interest ("Pl") in Duyung PSC are advancing, in light of the revised contract arrangements. Empyrean has tag along/ drag along rights that enable participation in any sale/ farmout on pro-rata terms.

PLN Background

PT PLN Energi Primer Indonesia ("PLN EPI") is a sub-holding of PLN Persero which was established on 21 September 2020 to ensure the availability of primary energy supplies through consolidating procurement & logistics processes, searching for primary energy sources and developing a resilient ecosystem and strong supply chain. The energy sources include but not limited to coal, gas and liquid fuel and biomass. PLN EPI will be a buyer of energy sources and will in turn provide the storage and logistic system to supply to all power plants in Indonesia giving them flexibility in balancing the energy source requirement effectively and efficiently.

The information in this announcement has been reviewed by Empyrean's Technical Director, Gaz Bisht, who has over 32 years' experience as a hydrocarbon geologist and geoscientist.

For further information please visit www.empyreanenergy.com or contact the following: