Release: EMP closes Kangean deal with Japex/Mitsubishi

(Jakarta, May 22, 2007) -- Indonesian publicly listed oil and gas company, PT Energi Mega Persada Tbk (EMP) today reported that it closed a transaction with Mitsubishi Corporation (Mitsubishi) and Japan Petroleum Co, Ltd (Japex) to introduce them as strategic partners, via a share subscription into EMP’s subsidiary, Energi Mega Persada Pratama Inc. (EMPI). The closing of this deal results in Mitsubishi and Japex assuming, in aggregate, an indirect 50% working interest in the Kangean PSC for a consideration of US$360m. EMP still retains a 50% indirect interest in the Kangean PSC.

 

The transaction is material and was approved by a majority of EMP shareholders at an extraordinary meeting of shareholders (EGM) held on April 19, 2007.

 

An integral part of the transaction involves a substantial Capex carry whereby Mitsubishi and Japex carry EMP’s development Capex obligations in the Kangean PSC up to an agreed amount.

 

The transaction crystallizes a portion of the value created in the Kangean PSC over the last few years of EMP ownership and demonstrates that the EMP’s strategy of focusing on organic growth, gas commercialization and operational excellence has delivered value for shareholders. EMP still retains a 50% exposure to this significant growth asset while reducing its debt turning requirements and cost of funds in the process.

 

In the 1st quarter of 2007, the Kangean PSC produced some 42 MMscfd of gas, and 2,459 barrels of liquids per day. (end of release)