The group said the RAJA SFA PSC is not expected to have any material effect on its earnings for the financial year ending June 30, 2027 (FY27) but is expected to contribute positively to future earnings.
KUCHING (September 22): Dialog Group Bhd’s (Dialog) field development and abandonment plan (FDAP) for the RAJA Cluster Small Field Asset Production Sharing Contract (RAJA SFA PSC) has achieved final investment decision (FID) amounting to US$81 million.
In a Bursa filing, the group said the FDAP had been approved by Petroliam Nasional Bhd (Petronas) on Monday (Sept 21).
The RAJA SFA PSC was signed between Petronas through Malaysia Petroleum Management (MPM), and Dialog Resources Sdn Bhd (Dialog Resources) on Dec 5, 2024.
The 14-year contract comes with a two-year pre-development phase, including feasibility studies, which allows Dialog Resources to finalise the field development plan and move into a subsequent two-year development phase.
First commercial production is expected by the end of the development phase with the production phase continuing for the remaining 10 years or up to the expiry of the contract, whichever is earlier.
According to Dialog, the pre-development phase covered 3D seismic data reprocessing, specialised studies and resource assessments to support development planning.
“Based on the study outcomes, Dialog has determined the asset’s feasibility and commercial viability, and a field development and abandonment plan has been established,” it said.
It added that the estimated 2P (proved and probable) reserves are approximately 6.1 million stock tank barrels (MMSTB).
The development will be supported by the group’s in-house Tarpon platform system, which it described as a cost-effective alternative to the traditional wellhead platform.
“Tarpon platform is suitable for marginal field developments in water depths of less than 100 metres befitting the requirements of RAJA Cluster,” it said.
The group said the RAJA SFA PSC is not expected to have any material effect on its earnings for the financial year ending June 30, 2027 (FY27) but is expected to contribute positively to future earnings.
The research arm of Public Investment Bank Bhd (PublicInvest Research) said it views the milestone positively as it provides greater visibility over Dialog’s expanding upstream portfolio.
It said first commercial production is targeted by the end of the two-year development phase, implying around September 2028.
“At US$81 million, the project’s development cost translates into approximately US$13.3 per barrel of 2P reserves, which appears manageable relative to Dialog’s balance-sheet capacity,” it said.
The research house assumed initial production of 3,000 barrels per day and an oil price of US$65 per barrel. On that basis, it estimated the project could add about RM30 million to RM50 million to earnings in FY29.
It added that this could rise to RM50 million to RM70 million in FY30, the first full year of production.
Dialog currently holds an existing operatorship in the Baram Junior Cluster Small Field Assets PSC, and participation in the RAJA SFA PSC is expected to further deepen its operational knowledge and expertise.
The group said developing the RAJA Cluster fields creates significant operational synergies and will allow it to leverage its integrated technical services team across Dialog Group’s diversified business model.