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Andalas Energy and Power (ADL)

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Andalas Energy and Power is a London AIM traded energy company focussed on power generation and exploration and production activities in Indonesia.

Andalas’ strategy is to secure gas supply and to monetise this supply through gas sales to local Indonesian power producers, export pipelines and by developing independent power generation operations.

In pursuing its Indonesian strategy, the Company is focussed on building an Indonesian energy company capturing revenue streams from both power generation and upstream gas exploration and production activities. The rationale behind this approach to gas and power is premised upon the following factors:

  • The Company has identified numerous undeveloped, small gas discoveries that represent stranded gas fields which it believes can be economically exploited in feeding the power sector;
  • Indonesia’s energy sector is unable to meet current demand, with frequent power outages and gas shortages hampering economic growth;
  • Electrification in Indonesia is currently at 88% which is significantly behind the South East Asian average;
  • The Indonesian Government is encouraging new players and more open access in power; and
  • The outlook for gas and power prices over the medium term is positive, driven by high gas demand in a regulated gas pricing environment.
  • The Directors believe this represents a compelling opportunity for the Company and endorse PwC’s view that, “Indonesia offers potentially the most exciting power investment opportunities for at least a generation.”*

The Company is targeting a range of prospects in the prolific South Sumatra and central Sumatran Basins, with a focus on stranded gas fields with potential for future Independent Power Production developments. Andalas is also seeking to opportunistically acquire select oil cash flow assets for inclusion in its long-term asset portfolio. The identification and assessment of targets is continuing.

 

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