Release: Medco Energi: Update on Novus acquisition
Tuesday, June 22 2004 - 06:47 AM WIB
As a result of Novus acquisition, the Company?s 1P reserve (in-house estimates) is expected to increase by 51% to about 210 millions barrel oil equivalent (?MMBOE?) from previously 140 MMBOE as of end 2003. By taking into account Novus? production, the Company?s expects that the oil and gas production to increase by 18% to reach a total of 33 MMBOE in year 2004.The successful acquisition of Novus would mark the entrance of MedcoEnergi to the Middle East region, as Novus owns interests at seven (7) blocks in three (3) Middle East countries: Oman, United Arab Emirates, and Qatar.
Addition to the assets of Novus in Middle East, on May 24, 2004, MedcoEnergi, through its other wholly owned subsidiary, Medco International Ventures Ltd (?MIV?), has signed a Memorandum of Understanding (MoU) with Gulf Petroleum Limited (?Gulf?) and World Progress Oil Inc./Energy Link Consultants to set-up a Joint Venture (?JV?) to explore, develop, produce and market crude oil and gas produced from Najwat Al Najm field and elsewhere in the State of Qatar.
This JV is set-up under Agreement with Qatar Petroleum, a Qatar state owned oil and gas company. The JV intends to explore the feasibility of obtaining exploration and/or production prospects in the Middle East and North Africa.
MedcoEnergi finds that Qatar is a very attractive oil and gas producer country, as at end of 2003, Qatar has proven reserve of oil at about 15 billion barrels (?BBO?) and 910 trillion cubic feet (?TCF?) of gas. While for total Middle East region proved oil reserve are in excess of 720 BBO and 2,530 TCF of gas.
Subsequent to the success of Novus? shares acquisition, which reflects MedcoEnergi?s effort to increase its oil and gas reserves and to enrich the production diversity, both Indonesian and International securities rating institutions, PT Pefindo (?Pefindo?) and Moody?s Investors Service (?Moody?s?), have reaffirmed their ratings toward MedcoEnergi and its current USD and proposed IDR bonds ratings.
On June 2, 2004, Pefindo gave MedcoEnergi rating of AA-, with Stable outlook for the Company and its proposed IDR bonds at a value of Rp.1.8 trillion with 5 years maturity.On June 15, 2004, Moody?s has confirmed the B3 issuer rating of MedcoEnergi and the B3 senior unsecured rating of MEI Euro Finance Ltd, a wholly owned subsidiary of MedcoEnergi. The outlook on the rating has improved to Positive from Stable previously. Moody?s decision to confirm the B3 rating is based on Moody?s conservative assumptions of 10% increase in production of MedcoEnergi over the next 2-3 year in view of the proposed Novus acquisition.
In the mean time, the Management of MedcoEnergi is preparing the strategy to optimize the integration process of Novus to MedcoEnergi, as well as to preserve the value of the Novus? underlying assets.(end of release)
For further information please call: Sugiharto-CFO/Corporate Secretary
Phone: 021-2505459, Fax: 021-2505536, E-mail:medc@medcogroup.com