Criterium Energy moves forward with fully funded Tungkal gas development and oil workover campaign

Criterium Energy Ltd. has outlined an ambitious 2025 capital plan, focusing on expanding production through a fully funded Tungkal gas development initiative and a strategic oil workover campaign. The company, known for its upstream energy operations in Southeast Asia, aims to increase output while reducing operational costs. With the SE-MGH gas project expected to contribute around 1,000 barrels of oil equivalent per day (boe/d) and an oil workover program targeting 1,100 barrels per day (bbl/d), Criterium Energy is positioning itself for significant growth.

CEO Matthew Klukas emphasized the company’s approach to fast-tracking gas production by leveraging ModularLNG technology while maintaining financial stability through reduced amortization payments. With a fully self-funded capital program, the company does not anticipate the need for additional financing, ensuring a streamlined path toward achieving its growth objectives.

What Are the Key Developments in the Tungkal Gas Project?

The Tungkal gas development project has gained renewed momentum following decades of limited activity. Gas was initially discovered at the Tungkal Production Sharing Contract (PSC) in 1988, with subsequent finds in 2004 and 2008. Despite these discoveries, a lack of infrastructure and weak domestic demand stalled development. However, with increased energy needs and improved regional infrastructure, Criterium Energy has initiated a staged development strategy to capitalize on these assets.

The company is focusing on the Southeast Mengoepeh (SE-MGH) field, targeting the Talang Akar Formation (TAF). With gas production anticipated to range between 4-7 million cubic feet per day (MMcf/d), equivalent to 700-1,200 boe/d, the project is expected to provide a significant boost to output. Gas pricing will be determined through sales agreements, with historical contracts in South Sumatra ranging between $4-7 per million British thermal units (MMbtu) on a long-term take-or-pay basis.

A series of milestones have been set for the next 12 months, including the commencement of site preparation, an extended well test in Q3 2025, and the finalization of a gas sales agreement. First gas production is targeted for Q1 2026, at which point Criterium Energy plans to explore further opportunities within its existing portfolio to deploy ModularLNG solutions.

To support its gas development strategy, Criterium Energy has signed multiple agreements, including an MOU with PT Energasindo Heksa Karya (EHK) for gas offtake and another MOU with PT BlueEnergy to facilitate gas transportation using Galileo Technologies’ ModularLNG system. This modular approach allows for on-site liquefaction, addressing challenges related to stranded gas reserves while reducing reliance on traditional pipeline infrastructure.

How Is Criterium Energy Enhancing Oil Production Through Workovers?

Alongside its gas expansion, Criterium Energy is intensifying its oil workover campaign to sustain and increase crude production. The program, initially launched in March 2024, focused on optimizing wells within the Mengoepeh (MGH) field. Over the past year, the company successfully completed 15 workovers, yielding over US$3 million in incremental cash flow from an investment of approximately US$600,000.

Building on these results, the company has planned an additional 8-12 workovers for 2025. The objective is to sustain production levels at around 1,100 bbl/d, while operational efficiencies, including the use of produced natural gas for equipment power instead of diesel, are expected to enhance profit margins. With cash payback periods averaging less than 30 days per workover, the initiative represents a high-return, low-cost strategy for maintaining stable production.

Criterium’s success with workovers, particularly in targeting the GH sand zone, has exceeded expectations. The company remains confident that its approach will continue to yield strong cash flow and efficient capital recycling, reinforcing its broader goal of achieving long-term operational sustainability.

How Is Criterium Energy Funding Its 2025 Expansion?

Criterium Energy has structured its 2025 capital program to be entirely self-funded, mitigating the need for additional equity raises or external financing. A key factor in this strategy is the US$2 million reduction in amortization payments, which lowers monthly cash outflows by approximately US$300,000.

This financial flexibility enables Criterium Energy to allocate resources effectively, ensuring the Tungkal gas development and oil workover campaign proceed as planned. By leveraging growing cash flow, the company is well-positioned to double production by early 2026, further cementing its role as a key energy supplier in Southeast Asia.

Criterium’s strong financial positioning is complemented by its operational efficiencies and regional market advantages. With offices in Calgary and Jakarta, the company benefits from cost structures denominated in Canadian dollars and Indonesian Rupiah, while sales revenue is generated in U.S. dollars, allowing it to capitalize on currency exchange benefits and premium Brent crude pricing.

What Is the Latest on Criterium Energy’s Bulu Transaction?

Criterium Energy continues to advance the sale of its 42.5% non-operated working interest in the Bulu Production Sharing Contract, originally announced in May 2024. The company has so far received US$1 million of the total US$7.75 million purchase price, with US$500,000 paid in September 2024.

While discussions continue with the original buyer, Criterium Energy is also evaluating alternative buyers to unlock value for shareholders. The company remains committed to finalizing the transaction while ensuring that shareholder value is maximized through strategic asset management.

What Lies Ahead for Criterium Energy in 2025 and Beyond?

With a fully funded Tungkal gas development, an aggressive oil workover campaign, and a clear financial roadmap, Criterium Energy is positioned for strong growth in 2025 and beyond. The company’s focus on increasing production, enhancing margins, and leveraging innovative energy solutions aligns with the rising demand for domestic energy in Indonesia.

By doubling production by early 2026, Criterium Energy is set to strengthen its market position while contributing to Southeast Asia’s energy security. As the company moves forward with its gas and oil expansion initiatives, it continues to prioritize operational excellence, financial discipline, and sustainable energy development in the region.