Criterium Energy Ltd. (TSXV: CEQ), an independent upstream energy development and production company focused on energizing growth for Southeast Asia, has provided an operational update on the Southeast Mengoepeh (SE-MGH) and North Mengoepeh (N-MGH) gas development projects and announced its unaudited financial results for the first quarter ended March 31, 2026.
“During the quarter, management intentionally prioritized advancing the SE-MGH gas development and related infrastructure, temporarily deferring certain oil optimization activities while positioning the Company for a significant expected increase in production and cash flow beginning in H2 2026,” said Matthew Klukas, President and CEO of Criterium Energy.
“We continue to realize premium pricing for our baseline oil production, which will generate the cash flow necessary to fund near-term oil production optimization initiatives as well as support our next phase of gas development at North Mengoepeh, Macan Gedang and Cerah. Our immediate focus remains achieving first gas at Southeast Mengoepeh as soon as possible, now expected in the third quarter. This will support a meaningful increase in our total production, deliver increased cash flow that can strengthen our balance sheet while investing in the development of our other oil and gas assets in the country, and drive greater energy security for Indonesia.”
Operational and Financial Highlights
- SE-MGH pipeline construction ongoing: The six-inch 24 km pipeline will connect the SE-MGH field (21 bcf 2P Reserves) to existing processing facilities, enabling production of 5-8 mmcf/d1 into a fixed take or pay contract. More information on the pipeline construction and its status is available in the latest presentation posted to the Company’s website.
- PT Olindo stepping in as pipeline contractor: Following delays in pipeline construction, Criterium reassigned the contract to PT Olindo, a subsidiary of the Mirah Group, resulting in a return to higher activity levels on the project. With the transition complete, the change will help mitigate further construction delays and reduce executional risk. With the transition the Company now anticipates first gas in Q3 2026.
- N-MGH, Macan Gedang, and Cerah progress: The Company is advancing its next phase of low-cost gas development activities at N-MGH (5 bcf 2P Reserves), Macan Gedang (13 bcf 2C Resource), and Cerah (26 bcf 2U Base Case Resource) to support potential additional gas production. Both N-MGH and Macan Gedang saw previous successful well tests completed and technical and regulatory activities are ongoing at these fields.
- Bulu receives POD extension: The operator of the Bulu PSC, which contains the Lengo gas field (134 bcf 2C Resource net to Criterium2) received notification from the Ministry of Energy and Mineral Resources (MEMR) approving the extension of the commencement date for commercial production to September 30, 2028
- Oil sales achieving premium to benchmark: For April 2026, Criterium realized an oil price of US$121/bbl, reflecting a premium to Indonesian and Dated Brent benchmarks. Oil production in Q1 2026 averaged 689 bbl/d3, below expectations due to natural decline combined with ongoing maintenance activities and well servicing, both of which are currently being addressed.
- Near-term oil optimization amidst higher oil prices: Criterium intends to leverage its upgraded service rig to begin producing from currently inaccessible zones within the main TAF reservoir, helping to increase oil production from the Tungkal PSC in the near-term.
- Increasing cash flow to drive growth: The Company reported a use of cash of C$0.5 million in Q1 as a result of C$0.5 million in negative non-cash working capital movements. Higher commodity pricing is expected to drive positive cash flow in Q2 that will help fund the oil optimization initiatives and the next phase of gas field development at N-MGH, Macan Gedang and Cerah.
- Balance sheet management remains a priority: As of March 31, 2026, the Company had a working capital deficit of C$57.1 million as a large portion of its debt balance moved into current liabilities with the two largest facilities set to expire in Q1 2027. Management continues to work with its lenders to find a sustainable, long-term solution and to reduce the Company’s overall leverage.
- New director brings meaningful oil & gas finance experience to bear: Subsequent to quarter-end, the Company announced the appointment of Ben Arnott, a seasoned energy finance professional with more than 25 years of experience in credit financings throughout the Asia Pacific region, to the board of directors and as a special advisor. The appointment strengthens the Company’s financial and strategic capabilities as it advances production growth initiatives and ongoing balance sheet optimization efforts
