MITI to divest granite business

IDX-listed PT Mitra Investindo Tbk (MITI) is considering to divest its entire granite business as it wants to focus on oil and gas business, Kontan reported on Thursday.

The paper quoted MITI Director Diah Pertiwi as saying that remaining reserves at its granite mines are estimated to be only around 7.5 million tons, sufficient only for five years of production.

She added that while looking for new reserves would require extra cost, the company believes that the oil and gas business offers better margins. ?There is possibility to divest the granite business. If the contribution from the oil and gas (business) is good, why not focus on it,? she said.

MITI announced in March of this year that it has entered into a conditional sales and purchase agreement (CSPA) with Interra Resources Ltd to purchase 90 percent shares in oil and gas firm Golwater Pte Ltd for US$13.5 million. MITI is expected to launch rights issue soon to raise the necessary funds for the acquisition.

Goldwater has a wholly owned subsidiary called IBN Oil Holdico Ltd, the sole operator of the Linda Sele TAC in West Papua. Total gross production of Linda Sele last year was 72,667 barrels.

Kontan said that MITI plans to develop four wells at Linda Sele including two this year and two the following year , with estimated combined spending of $8 million, about $2 million to be raised from the rights issue and the remaining $6 million expected from bank loans. (*)