KUALA LUMPUR (April 2): Globaltec Formation Bhd’s Australia-listed subsidiary NuEnergy Gas Ltd has extended negotiations with PT Laras Ngarso Gede for the supply of coal bed methane.

NuEnergy and PT Laras mutually agreed to delay the expiration of a heads of agreement by three months to June 30, 2024 from the previous deadline of March 30, according to a bourse filing on Tuesday. This marks the third extension for the non-binding agreement, now prolonged for more than 10 months.

The heads of agreement, which is to make way for a definitive agreement for the sale and delivery of coal bed methane to PT Laras, was initially expected to be executed by the second quarter of 2023, according to NuEnergy’s initial announcement in February last year.

Under the potential supply deal, a total contracted volume of 1.49 billion standard cubic feet of coal bed methane would be delivered over a five-year period to PT Laras, an Indonesia-based downstream natural gas and derivative products provider, NuEnergy said

NuEnergy has a 45% working interest in the Tanjung Enim production sharing contract (PSC) in South Sumatra, Indonesia. The Australian Securities Exchange-listed company holds another three coal bed methane PSCs across South Sumatra.

Globaltec, an integrated manufacturing services firm for stamping, tooling and automotive components, controls a 65% stake in NuEnergy.

Besides its manufacturing services, Globaltec also operates a resources segment that harvests and sells oil palm fresh fruit bunches (FFB), and an energy segment which involves the exploration and production of coal bed methane — an unconventional form of natural gas trapped in coal deposits or seams.

According to the company's financial results, the energy segment has yet to commence commercial operations and contribute to the company’s revenue as of end-December 2023.

For the first half ended Dec 31, 2023, Globaltec’s net profit fell 38.9% to RM3.71 million from RM6.07 million on the back of weak demand and overstocking seen by its manufacturing segment, coupled with weak FFB prices.

The company’s topline was down 10.4% to RM97.38 million from RM108.66 million previously.

During early morning trade on Tuesday, Globaltec shares were halted until 10am on the same day in line with the extension announcement.

At the time of writing, shares in Globaltec were last traded at 52 sen on Monday, valuing the company at RM138.6 million.

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Globaltec inks HOA with PT Laras Energy on coal bed methane supply in South Sumatra, Indonesia