Sunda Energy Plc (LSE:SNDA) has received a 12-month extension to the current phase of its TL-SO-19-16 production sharing contract (PSC) in Timor-Leste, which contains the Chuditch gas field.
The extension was granted by Timor-Leste’s upstream petroleum regulator, Autoridade Nacional do Petróleo (ANP), following an earlier notice of possible termination after the joint venture failed to drill the planned Chuditch-2 appraisal well by the June 2026 deadline.
The regulatory decision provides additional time for Sunda and its joint venture partner, state-owned TIMOR GAP, to progress discussions concerning the project’s ownership structure, potential third-party investment and future operatorship arrangements.
Under the revised terms, drilling-cost recovery uplifts will remain suspended until operations on the Chuditch-2 well commence.
PSC Extension Follows Missed June 2026 Drilling Deadline
The TL-SO-19-16 production sharing contract covers the Chuditch gas field offshore Timor-Leste, where Sunda is pursuing an appraisal programme through its wholly owned subsidiary, SundaGas Banda Unipessoal, Lda.
The joint venture had been required to drill the Chuditch-2 appraisal well by June 2026 but did not meet that deadline.
Following the missed commitment, ANP issued a notice indicating that the production sharing contract could be terminated.
The regulator has now granted a 12-month extension to the current contract phase, allowing the joint venture additional time to progress the appraisal programme.
The extension maintains the contractual framework for the project during the revised period, although the drilling commitment remains outstanding.
The company has not announced a confirmed commencement date for Chuditch-2 drilling.
Farm-In and Operatorship Discussions Continue
Sunda and TIMOR GAP are continuing discussions regarding potential changes to the commercial and operational structure of the Chuditch project.
The matters under consideration include a possible farm-in transaction, increased participation by the Timor-Leste state and the transfer of operatorship.
A farm-in arrangement would involve another party acquiring an interest in the project under terms to be agreed between the relevant participants.
The proposed changes remain under discussion, and Sunda has not confirmed that binding agreements have been reached.
The company said the additional time provided by the PSC extension will allow these negotiations to continue alongside preparations for the Chuditch-2 appraisal well.
Drilling-Cost Recovery Uplifts Suspended Until Operations Begin
As part of the revised contractual arrangements, drilling-cost recovery uplifts will be suspended until operations commence on Chuditch-2.
The suspension affects the treatment of eligible drilling expenditure under the production sharing contract during the period before the appraisal well begins.
The company has not provided a quantified financial impact from the suspension in the supplied update.
The arrangement forms part of the terms associated with the extension granted by ANP.
Sunda Coordinates Potential Drilling Schedule With Finder Energy
Sunda is also working with Finder Energy to assess opportunities for coordinating the Chuditch-2 drilling programme with other exploration and appraisal activity in Timor-Leste.
Finder Energy has secured a drilling rig with optional slots that could potentially be used to accommodate the Chuditch-2 well.
The companies are examining whether aligning their drilling programmes could provide operational and cost efficiencies through shared scheduling and related arrangements.
Any coordination remains dependent on the availability of suitable rig slots and agreement on the relevant operational requirements.
Sunda has not confirmed a rig contract or final drilling timetable for Chuditch-2.
Chuditch Appraisal Remains Central to Sunda’s Development Plans
Sunda Energy is an AIM-listed gas exploration and appraisal company focused on opportunities in the Asia-Pacific region.
Its activities in Timor-Leste are conducted through SundaGas Banda Unipessoal, Lda., in partnership with TIMOR GAP.
The Chuditch-2 well is intended to provide additional subsurface information to support the evaluation of the Chuditch gas field.
The 12-month PSC extension allows Sunda to continue progressing the project while discussions on potential investment, state participation and operatorship remain ongoing.
The company’s next steps include advancing those negotiations, coordinating potential drilling arrangements with Finder Energy and establishing a revised schedule for Chuditch-2.
The appraisal well has not yet commenced, and the proposed changes to the joint venture structure remain subject to further agreement.
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