Foreign financial institutions ready to fund Medco expansion project

A number of financial and foreign funding institutions are interested in providing funds for PT Medco Energi Internasional's (MEDC) expansion projects, estimated to reach $82m. The project is especially aimed at developing export oil pipelines in Southern Sumatra.

Medco Energi Internasional Director & Corporate Secretary Sugiharto revealed this plan to the JSX today.

Nevertheless, he refused to mention the names of those institutions until an agreement has been reached with them. So far, the plan is still undergoing feasibility studies and Medco has not received any firm commitments. Thus, the exact amount to be provided by them is not yet known.

First semester financial report

Medco reported quite a good financial performance in the first semester this year. The company posted some Rp349.89bn net profits, reflecting a 106.35% rise from Rp169.56bn in the corresponding period last year.

Meanwhile, net sales amounted to Rp1.17tr, representing a 59.71% jump from Rp730.79bn previously.

Medco also managed to increase operating profit by 179.78% to Rp659.07bn from Rp235.56bn in the first semester last year, mainly resulting from a 63% increase in oil production from 38.5 thousand barrels per day (bpd) to 62.8 thousand bpd.

Focused on oil and natural gas, the majority of the company's shares are owned by Arifin Panigoro.

Medco also gained profit from an increase in crude oil prices to $27.1 a barrel from $14 previously.

This year, the company has set an oil production target of 67,000bpd. By the third week of August 2000, company oil production had already reached 72,800bpd.

In the meantime, gas sales are expected to reach 70 million standard cubic feet per day (scfd) from operational area drilling activities and an increase in gas supply to a methanol factory that resumed operations at the end of June.

Gas sales were targeted at 91.4 million standard cubic feet per day (mmscfd) by the third week of this month.

The factory has increased methanol production to 930 tons per day from a previous 800 tons. In the first half of this year, Medco managed to reduce non-operating expenses to Rp6.12bn from a previous Rp53.58bn, whilst operating expenses rose to Rp93.26bn from Rp85.08bn.

Total equity increased by 168.13% to Rp2.94tr per June 30th 2000 from Rp1.10tr in the corresponding period last year. In the meantime, total assets rose by 30.37% to Rp4.14tr from Rp3.17tr previously.

Medco managed to reduce total liabilities by 43.65% to Rp1.14tr from Rp2.02tr in June 1999.

In this regard, the reduction reflected a strengthening of Medco's capital structure. The company's total liability to total equity ratio per June 30th 2000 reached 38.66% from 183.96% previously.

Meanwhile, the ratio of total liabilities to total assets ratio stood at 63.62% from a previous 27.42%. (*)