Coro Energy – Operations update shows the potential

April 13, 2021 | Posted by

By Dr. Michael Green

There was plenty of good news for investors to get their teeth into this morning from Coro Energy, a company which focuses on supporting the transition in South East Asia to a low carbon economy. This latest announcement was an update which centred on the recent acquisition of Global Energy Partnership Limited (GEPL) and its portfolio of operated renewables projects.

Word is that the structuring of a local Philippines project holding company has already began. Work to progress the flagship 100MW wind and 100MW solar projects in the Visayas region of the Philippines has been initiated involving discussions on the Energy Service Contracts, local landlord engagement, Environmental Impact Assessment, Grid Impact Assessment and the negotiation of Power Purchase Agreements.

At the same time, the team has been working swiftly to start a campaign of comprehensive data gathering at the 100MW onshore Philippine wind project (at this stage its worth drawing attention to the fact that all data required for the 100MW solar project is already in the company’s possession). All these initiatives have been brought into play to meet Coro’s plan to have both projects construction ready by mid-2022. This could mean that first revenues could be on the cards for mid-2023 (subject to the availability of project financing).

Meanwhile at the Duyung PSC, work undertaken by the operator Conrad Petroleum looks to be going well, with the updated Plan of Development (POD) to be submitted in due course. There is no doubt that the POD will be a big step towards commercialisation of the project. This is expected to be followed by pre-Front-End Engineering Design (FEED), concept selection and the Gas Sales Agreement. Meanwhile in Italy, production at Rapagnano continues at the same time as negotiations are ongoing concerning the divestment of Coro’s portfolio of Italian assets.

At the time of this latest announcement, Mark Hood, Coro Energy’s new CEO was quick to point out that “This is an exciting time for Coro Energy as it looks to build on its recent acquisition and the resulting opportunities in SE Asia’s rapidly growing renewable energy sector. Coro Energy is proud to be supporting the transition from fossil fuels to clean energy in SE Asia and we have a large number of important commercial and operational milestones approaching over the next 6-12 months.  I am confident that we will rapidly develop our platform of operated assets, with a view to creating a variety of revenue streams that will add material value to the business.  We also look forward to commercial progress at Duyung.”

Growth in energy demand in South East Asia is amongst the fastest in the world and there is little doubt that Coro’s renewable energy interests in South East Asia just slipped up a gear or two with the recent acquisition of GEPL, which is a developer of renewable energy project across this region. That move brought Mark Hood in as CEO, who is clearly an experienced clean energy executive who looks set to deliver on Coro’s growth strategy for South East Asia.

Mark was the co-founder of GEPL and also has more than 20 years’ experience in utility scale energy projects at all stages of development and asset transition. His expertise spans projects that have been delivered for BP and Cairn Energy in locations including Bangladesh, Rajasthan, Greenland and Algeria. He also brings extensive experience in rejuvenating off track organisations and projects along with proven expertise in ensuring the delivery of projects and portfolios to increase company value. With experience in oil and gas as well as clean energy, Mark looks clearly like the right sort of man to be heading up Coro, supported by his GEPL co-founder Michael Carrington as Chief Operating Officer.

The GEPL acquisition provides a portfolio of operated renewable energy opportunities in South East Asia totalling 4 GW, with an initial focus on two high graded opportunities in the Philippines – a 100MW solar project and a 100MW onshore wind project. The GEPL team has done the pre-feasibility work on the projects and established key relationships in-country. Now the projects need further capital to take them forward – which is what directors’ James Parsons and Andrew Dennan are awfully good at.

There is a lot of attention being focused on the green energy revolution these days. Tomorrow sees the start of trading in Mast Energy Developments (LON:MAST), spun out of Kibo Mining with an initial market capitalisation of £23 million having raised £5 million in fresh cash. MAST is involved in what is called Reserve Power demand in the UK, which refers to the use of low carbon sustainable gas to provide power to help meet the UK’s electricity needs during periods of high demand.

Currently MAST has c.9 MW immediate production capacity and c.20 MW in production capacity within the first six months from listing. In addition, MAST also has another c.20 MW in production capacity over the next six months; plus, various other shovel ready sites have already been identified in the UK. This all looks like small beer compared Coro’s portfolio of operated renewable energy opportunities in South East Asia totalling 4 GW and its two initial 100MW projects.

With the shares trading at 0.385p, Coro Energy is capped at a mere £8 million. And of course, on top of the solar and wind power projects is a stake in the Duyung PSC’s Mako Gas Field is one of the largest gas fields ever discovered in the West Natuna Basin, offshore Indonesia where production could start in 2024. There does look to be one hell of a lot going on here for such a lowly market cap.

We initiated coverage on Coro Energy in December 2020 with a Conviction Buy and a target price of 1.50p, when the shares were trading at 0.275p. At the current price, following the latest moves, we are more than happy to reiterate our stance.


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