Medco to submit final bid for Novus on May 25

Publicly listed energy firm PT Medco Energi Internasional Tbk (Medco) will officially submit its final bid on May 25 for the acquisition of Australia’s Novus Petroleum oil and gas company, the Investor Daily Indonesia newspaper reported in its Monday edition.

“If no obstacles are there, Medco will submit its final statement on May 25. But remember, Medco must follow the system in Australia and it might be possible that it (the acquisition) would be delayed. It will be dependent on the simulation of economic calculation based on the parameters of the new price,” the company’s chief financial officer Sugiharto said in Jakarta over the weekend.

When asked about whether Medco would increase its price offer for the Novus shares, Sugiharto didn’t comment much.

"If we want to win, we must increase our offer. But Medco must be very careful and do not give any indication that we are going to increase or decrease our bid, or remain stable prior to the bid,” Sugiharto said.

He said Medco expected to conclude deals to acquire Novus Petroleum and two local gas working areas in June at a total cost of at least US$400 million.

Sugiharto said Medco would try to counter a takeover bid for Novus by Australian-based Sunov Petroleum Pty soon and was expecting to end the bidding process in June.

Medco earlier offered to buy 90 percent of Novus shares on issue at A$1.74 each.

Meanwhile, Sunov has raised its bid to A$341 million (around US$250 million), or A$1.85 per share, up from A$326 million, or the A$1.77 a share of its earlier bid.

Medco, which was founded by businessman-turned-politician Arifin Panigoro, was anxious to acquire Novus, which has a major gas field in Brantas, East Java, as part of its business strategy to shift its focus from oil to gas. Medco has seen a decline in its oil reserve lately.

Sugiharto said the company would also conclude the buying of two other gas blocks in June. He refused to disclose the name of the blocks.

Energy analysts from several securities firms have speculated that Medco is planning to buy some shares in the Kangean oil and gas block in East Java from energy firm BP Indonesia, a local unit of the British-American energy giant.

The company is also reportedly trying to obtain a gas block in Senoro, central Sulawesi.

Sugiharto declined to comment on the plan. He only said the areas the company was eying had already earned contracts with several buyers to supply gas.

"We are not going to acquire a block that needs to be developed from scratch," he said. (*)