Medco to acquire 2 Papua oil exploration blocks

JSX listed oil and gas company PT Medco Energi International said Friday it has signed a memorandum of understanding to acquire Apex Yapen Ltd.'s 90 percent working interest in Yapen exploration block in Papua province.

"We plan to conclude the purchase of the Yapan oil block in October," Medco's Finance Director, Soegiharto, told reporters.

Soegiharto said his company has also signed another MOU with Ramu International Ltd. for its 60 percent working interest in Rombebai Block, also in Papua.

He didn't disclose the value of the acquisition of the two oil blocks.

Soegiharto said the acquisition is part of Medco's strategy to replace and add oil and gas reserves.

Medco expects to close the sale and purchase agreement for the acquisition of the block held by Ramu International Ltd. also in October.

He said Medco will use proceeds from the $100 million eurobonds issued earlier this year and its internal cash to finance both acquisitions.

Medco recently spent $30 million of the proceeds from a $100 million eurobonds issue to finance acquisitions, including an exploration field in East Kalimantan, oil producing Tuban joint operating block in East Java, and the Asahan block in North Sumatra.

Last week, it signed an MOU to acquire Petroleum Development Associates (Asia) BVI for its 60 percent working interest in the Lematang block in South Sumatra for $6.3 million.

Thailand's PTT Exploration & Production PCL owns a 34 percent indirect stake in Medco. (*)