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Medco expecting 14500 bod

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The new partner expecting 2.5 times the current prodcution of 5700 bopd

blocks

Raras Cahyafitri, The Jakarta Post | Business | Mon, December 31 2012, 11:47 AM

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Paper Edition | Page: 6

Oil and gas firm PT Medco Energi Internasional is exploring the possibilities of acquiring stakes in six oil and gas blocks in Indonesia as well as in the Middle East and North African (MENA) countries, according to a top executive.

“We are evaluating two blocks in Indonesia and about four blocks in MENA countries. All will depend on the commercial assessment,” Medco president director Lukman Mahfoedz said.

According to Lukman, owners of the blocks have invited Medco to jointly develop the oil and gas blocks.

Medco has expanded overseas for years. The company recently acquired a 25 percent stake in Block 9 in Yemen. The block has gross reserves of 58.6 million barrels of oil (MMBO) and is expected to achieve production of around 14,500 barrel of oil per day (BOPD).

The acquisition of Block 9 in Yemen is expected to contribute around US$22 million in EBITDA (earnings before interest, tax, depreciation and amortization) to Medco this year, according to Lukman. 

Besides Yemen, Medco currently operates in Oman — through its wholly owned Medco Oman LLC, which holds a 55 percent participating interest in Karim Small Fields —, in the United States and Libya. 

Finance director Syamsurizal Munaf has said that, in acquisition, Medco sought for fields that could produce up to 5,000 barrel of oil equivalent per day (BOEPD).

The company estimated that next year’s production would be at about the same level of this year’s 65,000 BOEPD. The company projected that production would increase significantly in 2014 and 2015, following completion of big development projects and acquisitions. 

The company’s major development projects include the project to increase production capacity at Senoro field in Sulawesi, development of the Block A gas field in Aceh to a capacity of 110 million standard cubic feet per day (MMscfd), development of oil field Area 47 in Libya to between 50,000 and 100,000 BOPD and development of the Donggi-Senoro liquefied natural gas and enhanced oil recovery project in the Rimau block in South Sumatra.

Medco is planning to set aside $270 million in capital expenditures to finance its major development project next year as well as $70 million for exploration activities, particularly for its projects in Yemen and Libya.

Lukman revealed that Medco projected that its operations income would touch at around $238 million with EBITDA of $337 million by year’s end. The higher EBITDA compared to operational revenue will derive from non operational revenue. 

“In 2013, the company’s income from operations is expected to reach around $270 million with EBITDA of $360 million,” Lukman said. 

Medco shares (MEDC) closed at Rp 1,630 apiece on Friday — the last day trading day of 2012 — declining by 0.6 percent from the previous day. Its stocks have dropped about 32 percent from 2011’s closing price of Rp 2,425.