EMP sets aside $196 million in capital expenditure next year

PT Energi Mega Persada Tbk (EMP) will set aside about US$196 million in capital expenditure (capex) next year to strengthen the company?s capital structure and to finance development of new oil and wells.

EMP?s President Director Imam P. Agustino said in Jakarta on Tuesday that about $96 million of the 2010 capital expenditure would be used to develop new wells in the company?s several oil and gas blocks, while the other $100 million would be used as working capital.

He said that the development of new wells would be carried out in all the company?s oil and gas blocks including THP-Gebang, Malacca Straits PSC, THP Sungai Gelam, THP Semberah, THP Bentu, THP Korinci Baru and Kangean PSC.

Imam said that the company expected to book a net profit of between $10 million and $15 million next year. This year?s total revenue is estimated to decline by 28.64 percent to $89 million from $192 million in 2008.

Imam said that EMP also expected to raise fresh funds amounting to Rp 4.84 trillion (US$=Rp 9,500) from the issuance of rights shares which would be offered to existing shareholders in January next year.

He said that about $250 million of funds to be raised from the right shares issuance would be used to repay debts, while the other $111 million would be used to improve the company?s cash flow.

After the rights issue, the amount of the debts was expected to decline to $357.1 million, he added. (*)