Sunda Energy Plc (AIM: SNDA), the AIM-quoted exploration and appraisal company focused on gas assets in Southeast Asia, is pleased to announce its unaudited interim results for the six months ended 30 June 2025.
Chief Executive's Statement
The first half of 2025 was a period of intense activity for Sunda, as operational planning activities in Timor-Leste approached a climax. The period ended with the disappointment of a postponement of the drilling operations, with the Board's current focus on ensuring that the new drilling timeline of H1 2026 is achieved in tandem with various initiatives to capture material new business and broaden the Company's growth portfolio. Key highlights from the period are described below:
Timor-Leste TL-SO-19-16 PSC ("Chuditch PSC" or "PSC") (Sunda 60% interest)
The Chuditch PSC is located approximately 185km south of Timor-Leste, 100km east of the Bayu-Undan field and 50km south of the planned Greater Sunrise development. The PSC covers approximately 3,571 km2 in water depths of 40-120 metres and contains the Chuditch-1 discovery well, which lies to the southeast of the PSC area. Chuditch-1 was drilled by Shell in 1998 in water depths of 64m and encountered a 30m gross gas column in the Jurassic Plover Formation sandstone reservoirs, at a depth of 2,910m on the flank of a large, faulted structure. The discovery and neighbouring prospects are largely covered by a 3D seismic survey acquired in 2012 and subsequently reprocessed by Sunda. This 3D seismic reprocessing demonstrated Chuditch to be a field of significant scale, interpreted to be more than 20km long and around 150m in vertical relief, with a Pmean Contingent Resource of 1.16 Tcf of gas.
The Chuditch PSC is currently in Contract Year 3, which contains a commitment to drill a well to appraise the Chuditch gas discovery. A well location was selected for the Chuditch-2 appraisal well ("Chuditch-2"), that is 5.1km from the original Chuditch-1 discovery well, in a water depth of approximately 68m. The predicted vertical column height of gas in the Jurassic reservoirs at this location is 149m, as compared with the 30m gross gas column encountered in the discovery well.
The reporting period was dominated by operational and funding preparations for the drilling of Chuditch-2, which had been expected to commence during Q3 2025 but was ultimately delayed (as outlined below) and is now expected to be drilled during the first half of 2026.
In January 2025, the Company completed an Environmental Baseline Survey ("EBS") in the area of the planned well. The purpose of the EBS was to gather information on the seabed sediments and fauna, as well as collect seawater samples. The results were integrated into the Environmental Impact Statement and the Environmental Management Plan for submission to the regulator, Autoridade Nacional do Petróleo ("ANP"), as part of the process for securing an Environmental Permit for drilling activities.
On 24 April 2025, the Company announced that it had entered into a binding Farm-In agreement (the "Farm-In Agreement") with its government-owned joint venture partner TIMOR GAP Chuditch Unipessoal Lda ("TIMOR GAP"), whereby the Company's wholly owned Timor-Leste subsidiary, SundaGas Banda Unipessoal, Lda. ("SundaGas"), would assign a 30% interest to TIMOR GAP in addition to the 15% interest acquired by TIMOR GAP in the Farm-In transaction completed on 8 February 2024 and its original 25% interest (which portion is carried to first gas, the "Carry"). This assignment would have resulted in SundaGas retaining a 30% working interest in the Chuditch PSC, with TIMOR GAP holding a 70% interest. From the effective date of 1 April 2025 until the end of Contract Year 3 of the PSC, TIMOR GAP would have been responsible for paying 72% of all PSC costs, including their share of the drilling of the planned Chuditch-2 appraisal well (and their share of the Carry).
At the same time, the Company announced that it had conditionally raised up to US$9.0 million, through the issue of unsecured convertible loan notes (the "Loan Notes" or "CLNs") to three institutional investors. Together with the TIMOR GAP Farm-In Agreement, the combined funding arrangements provided the Company with the funding required to drill Chuditch-2, commencing with the execution of a contract for the use of a jack-up rig. Following a general meeting of the Company on 10 May 2025, the first tranche of US$1.5 million (£1.135 million) of CLNs was issued on 12 May 2025 and, on 16 May 2025, holders of the Loan Notes exercised their right to convert all of the outstanding balance of their Loan Notes into Ordinary Shares of 0.025p each in the Company, resulting in the issue of 3,125,594,493 new Ordinary Shares. Further information is provided in Note 11 to these Interim Financial statements.
However, on 16 June 2025, the Company announced a postponement of the drilling of Chuditch-2, which is now expected to be drilled in H1 2026. The delay was caused by the absence at the required time of helicopter services in Timor-Leste that met the necessary operational objectives and safety standards, and the non-approval of alternative international helicopter service providers. This issue meant that the Company was not able to proceed with the execution of a definitive contract for a drilling rig, and hence the Farm-In Agreement also terminated. Termination of the Farm-In Agreement meant the working interests on the PSC remain unchanged, with SundaGas holding a 60% working interest and operatorship and TIMOR GAP having a 40% interest. SundaGas and TIMOR GAP are responsible for paying 80% and 20% of all project costs respectively.
On 17 June 2025, ANP granted a 12-month extension to the current phase (Contract Year 3) of the PSC, which now expires on 18 June 2026.
Following postponement of Chuditch-2 and continuing subsequent to the reporting period, SundaGas is in dialogue with TIMOR GAP concerning operational and funding plans for Chuditch-2. Discussions are constructive and positive, and the Company looks forward to providing further information in due course.
Revised proposals from the Timor-Leste helicopter company have been received for the support of the offshore drilling operations at Chuditch in H1 2026 and these appear broadly acceptable, which is encouraging. The Company is actively engaged with a number of rig operators with a view to contracting a rig for Chuditch-2 drilling operations. In parallel, efforts to secure an Environmental Permit continue in good order and are expected to be completed in the near future.
New Ventures
The Company continues to evaluate and pursue new business opportunities in line with its growth strategy in the Southeast Asia region.
Sunda's applications for two blocks in the 1st Conventional Energy Bid Round of the Bangsamoro Autonomous Region of Muslim Mindanao ("BARMM") in the Philippines remain outstanding, pending final Presidential signature. The blocks are located in the Sulu Sea adjacent to the Malaysian state of Sabah and contain several gas discoveries and multiple prospective drilling targets. The Company continues to liaise with the Philippines authorities, its joint venture operator and Philippines partners and looks forward to the final award of the blocks in the near future. We remain excited about the potential of the two application blocks and are eager to commence activities in the area. More detailed descriptions of the potential and forward plans for the blocks will be provided in due course.
As part of Sunda's growth plans as well as the desire to expand and diversify its upstream portfolio, the Company is actively engaged in the pursuit of a number of new business initiatives. The target opportunities are potentially material and would be highly impactful to Sunda if secured. Further details will be provided if any of these new business activities are successful.
Financial Position
The net loss after finance costs and tax of £1,130,000 (30 June 2024: net loss of £910,000; year to 31 December 2024: net loss of £2,049,000), represented a loss of 0.004p per share (30 June 2024: 0.004p; year to 31 December 2024: 0.008p).
On 12 May 2025, the Company issued the Loan Notes for an aggregate value of US$1,500,000 (£1,135,000). The Loan Notes carry a finance charge of 10% of the aggregate value of the issued Loan Notes and can be converted into Ordinary Shares of 0.025p each at the option of the holder at any time prior to 22 April 2026. In the event of conversion, the Company will also grant the holders warrants amounting to the equivalent of 75% of the value of the Loan Notes to be converted, at a 30% premium to the conversion price.
On 16 May 2025, holders of the whole of the above-mentioned Loan Notes exercised their right to convert all of the outstanding balance of their Loan Notes into Ordinary Shares of 0.025p each in the Company. The conversion price was calculated at 0.03995p per share resulting in the issue of 3,125,594,493 new Ordinary Shares. In addition, the Company granted in aggregate 1,803,227,592 warrants to the holders of the Loan Notes, with each warrant entitling the holders to subscribe to one Ordinary Share at an exercise price of 0.051935p for a period of three years from grant.
Available cash (excluding monies held as security for the Bank Guarantee in Timor-Leste) as at 30 June 2025 was £976,000 (30 June 2024: £4,545,000; 31 December 2024: £3,171,000).
The Bank Guarantee issued by Banco Nacional de Comércio de Timor-Leste ("BNCTL"), a bank wholly owned by the government of Timor-Leste for the Chuditch PSC remains at US$2.5 million (net US$2.0 million), as required by the regulator, Autoridade Nacional do Petróleo ("ANP"), for the work commitments in Contract Year 3 of the PSC. The use of BNCTL is part of the Company's commitment to maximising local content inside Timor-Leste, but also indicative of its objective to broaden its business partnerships in-country.
Joint Brokers
During April 2025, Hannam & Partners (H&P Advisory Ltd) were appointed as advisor and joint broker. Allenby Capital Limited remains the Company's nominated adviser and joint broker.
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules - Note for Mining and Oil and Gas Companies, the technical information and resource reporting contained in this announcement has been reviewed by Dr Andy Butler, Fellow of the Geological Society of London and member of the Society of Petroleum Engineers. Dr Butler has 30 years' experience as a petroleum geologist. He has compiled, read and approved the technical disclosure in this regulatory announcement and indicated where it does not comply with the Society of Petroleum Engineers' standard.
Gerry Aherne, Sunda Chaiman, commented:
"Despite some headwinds during the first half of the year, considerable progress has been made and the team continues to strive towards drilling the Chuditch appraisal well as soon as is practicable. The new business ventures being pursued are encouraging as we endeavour to grow the portfolio with additional material projects and I am hopeful that the Company will announce positive news on these initiatives soon. I look forward to significant progress on Timor-Leste and beyond during the second half of 2025."