Medco to raise 20% reserves and output from Novus?s assets

Publicly listed oil and gas producer PT Medco Energi Internasional Tbk said Monday the acquisition of Novus Petroleum global assets will expand its proven plus probable hydrocarbon reserves and average oil and gas production by approximately 20 percent.

The acquisition will also significantly raise natural gas contribution to its overall output from 17 percent to 26 percent.

Novus, an Australian upstream company, owns stakes in 26 blocks in seven countries, that is Indonesia, Australia, the United States, Oman, United Arab Emirates, Pakistan and the Philippines. In Indonesia, Novus owns a 25 percent interest in Kakap production sharing contract (PSC) in West Natuna and a 50 percent interest in Brantas PSC in East Java. Both concessions mainly produce gas.

?The Novus assets are attractive to us as they expand our interest in Indonesia with their ownership in Kakap PSC and Brantas PSC and give us the potential for geographic diversification of our asset base,? Hilmi Panigoro, Chief Executive Officer of Medco, said in a statement.

Medco currently has proven and probable reserves of around 574.2 million barrels of oil equivalent. The company recently said its oil production in 2004 is expected to drop by 14 percent to 60,000 barrels per day due to depletion in reserves at the Kaji/Semoga oil field in South Sumatra, which contributes about 80 percent of the company's output.

Medco has said it would increase gas output by 50 percent to around 120 million cubic feet a day next year, from around 80 million at present to balance the decline in oil output. (robert)