Medco plans to buy more oil firm stakes

Oil and gas firm PT Medco Energi Indonesia said on Monday it planned to buy stakes in one or two oil companies this year in a bid to boost its reserves.

Medco President Director Helmi Panigoro gave no details on potential targets but said the company had enough cash to finance any deal, partly from the proceeds of $100 million worth of seven-year bonds issued in March.

"Our target is to buy stakes in one or two firms by the end of this year. We still have $70 to $100 million in the company's cash reserves and most of the proceeds from the $100 million bond issuance have not been used," Panigoro told reporters.

Panigoro said Medco had recently acquired three oil wells in Indonesia's East Java, Sumatra and Kalimantan, worth around $30 million.

Medco has said it was also weighing issuing another $100 million bond by the end of this year.

"But we haven't decided. The company will have a beauty contest in the second semester to decide whether we are going to issue bonds or get a syndicated loan," Medco Finance Director Sugiharto said.

The company is an independent oil and gas exploration and production company of modest size. It is 85.44 percent owned by holding company New Links Energy.

Thailand's PTT Exploration and Production (PTTEP) , which owns 40 percent of New Links, recently launched a tender offer to buy the rest of Medco's shares from the public. (*)