Medco to drill development wells in Aceh

PT Medco E&P, an upstream unit of Indonesia-listed energy firm PT Medco Energi Internasional Tbk, plans to drill 12 development wells in Block A in Aceh over the next two years.

Medco E&P president director Budi Basuki said the company expected an initial production of 60 MMSCFD to take place in the Q3 of 2013. The production is expected to peak at 110 MMSCFD, two years after the initial production.

Budi said the gas offtaker would be state fertilizer company Pupuk Iskandar Muda at a price of US$6.5 per MMBTU for six years.

?There is a stipulation concerning price escalation, but I can?t remember by what percentage,? he said.

He added the company would allocate $600 million for capital expenditures for the next five years, $400 million of which will be spent until the block?s initial production. (bernard)