Andalas Energy and
Power Plc
(‘Andalas’, or the
‘Company’)
Company update
Andalas Energy and Power plc (AIM:ADL) is pleased to provide an
operational update on its strategy to develop a portfolio of 250MW
to 500MW of wellhead independent power projects (‘IPPs’) in
Indonesia fired with gas from
proven fields and also to provide an update on its zero coupon loan
note (‘the Loan Note’) issued to Sandabel Capital L.P
(‘Sandabel’).
Pertamina update
On 1 September 2016, Andalas
announced a cooperation agreement with Pertamina, the Global
Fortune 500 national oil company of Indonesia, to commercialise gas fields within
Pertamina’s acreage in Sumatra via
the roll-out of the Company’s gas to power offering. Since
then a number of projects have been subjected to a vigorous
selection, due diligence and evaluation exercise, resulting in the
identification of multiple proven fields within Pertamina’s
portfolio that are suitable for gas-to-power development.
Andalas and Pertamina are now seeking to formalise the
contractual framework under which each proposed project can be
developed, including specifics of the power project development and
the terms of the agreement.
PT PP Energi (“PPE”)
On 17 July 2017, Andalas announced
an agreement with PPE, the Indonesian state-owned construction and
engineering company, to jointly develop independent power
facilities in Indonesia. Andalas agreed to propose at least
three projects to PPE within three months of the agreement. The
Company is pleased to report that it has now presented the first
project and both parties have started the work necessary to
evaluate the project and, subject to negotiation, to establish a
consortium agreement to develop the project.
New “fast power” opportunity
In the recently announced 2017 Republic of Indonesia’s
Electricity Supply Business Plan (‘RUPTL’), it was announced that
mobile power plants are to be deployed to deal with short-term
shortages of power. In response to this and in parallel with
its core business of developing 30MW to 100MW independent power
projects, Andalas has identified a number of gas projects as part
of its work with Pertamina and other gas owners, that it considers
to be potential candidates to supply a short term mobile power
plant development.
Three categories of gas field are being targeted:
- Smaller projects (circa 30BCF) that are considered too small
for a long term IPP development but are suitable for a shorter
project life
- Producing gas fields with surplus uncontracted gas supply
- Oil fields where oil production is constrained by flaring
consents
Andalas has started project feasibility work on two gas assets.
If found suitable, Andalas will look to propose a short-term
power solution to the state-owned electricity company, PLN.
The potential projects must be near existing gas supply and power
infrastructure, located in a region with unmet power demand and
offer immediate cash flow potential. Andalas will act as
project developer and it has held conversations with a number of
global flexible power providers to provide the power plant,
operating and maintenance of any project under a tolling
agreement.
Loan note update
Sandabel has agreed to extend the maturity date of the £550,000
Loan Note to 31 August 2017 (“the
Maturity Date”). The fee associated with the extension is
£50,000, which will be repaid alongside the £550,000 loan note on
or before the maturity date. The Loan Note only becomes
convertible into equity in the event that the Loan Note is not
repaid by the Maturity Date. All other terms of the Loan Note
(announced on 1 February 2017) remain
unchanged. In addition Sandabel has been issued with
150,000,000 3 year warrants at a strike price of 0.1pence per share, representing a 38% premium to
the closing share price.
David Whitby, CEO of Andalas
Energy & Power, commented: “We believe that our ability to
identify competitive sources of gas, creates multiple opportunities
in the power market in Indonesia. We continue to make
progress with Pertamina towards our goal of delivering our first
project. At the same time, we continue to seek other ways to
create value for shareholders and the ‘fast power’ opportunity has
the potential to do just that. By adopting the supplier tolling
model there will be negligible capital investment required to bring
any future project into production, and therefore ‘faster power’
projects provide scope to bring forward first revenues for Andalas
without the need for shareholder dilution.
“As was the case when the Board of Directors participated in the
recent placing, the extension of the loan note provides the Company
with additional flexibility at a time when we are seeking to
deliver on the multiple objectives that we have been working on
since signing our agreement with Pertamina. I look
forward to providing further updates on our progress.”
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ('MAR). Upon the publication of this
announcement via a Regulatory Information Service ('RIS'), this
inside information is now considered to be in the public
domain.
**ENDS**
For further information, please contact:
David Whitby |
Andalas Energy and Power Plc |
Tel: +62 21 2783 2316 |
Sarah Wharry
Craig Francis |
Cantor Fitzgerald Europe
(Nominated Adviser and Joint Broker) |
Tel: +44 20 7894 7000 |
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Jon Belliss |
Beaufort Securities Limited
(Joint Broker) |
Tel: +44 20 7382 8415 |
Frank Buhagiar
Susie Geliher |
St Brides Partners Limited |
Tel: +44 20 7236 1177 |