Conrad Asia Energy (ASX:CRD) and its West Natuna Exploration subsidiary, operator of Duyung Production Sharing Contract (PSC) in Indonesia, signed a binding term sheet with Empyrean Energy to settle historical cash call arrears, according to a Friday filing with the Australian bourse.

Empyrean's 8.5% participating interest in the Duyung PSC will be transferred to West Natuna Exploration, with Empyrean and the company incorporating a Singapore-domiciled Special Purpose Vehicle (SPV) with a shareholding of 8.5% to Empyrean and 91.5% to Conrad and entering into a shareholders' agreement, the filing said.

After the transfer, incorporation of the SPV, and the transfer of West Natuna Exploration's 75% interest in the Duyung PSC to Nation Petroleum Natuna Barat, all of the shares in West Natuna Exploration will be transferred to the SPV, per the filing.

Conrad Asia Energy shares rose nearly 2% in afternoon trade on Friday.