ESG and Energy Transition

MedcoEnergi’s Climate Change Strategy and its ESG Commitments

Oxford Business Group has recently highlighted MedcoEnergi’s Climate Change Strategy and its long record of strong Environmental, Social & Governance (ESG) performance

Commitment to Invest in a Sustainable Future

Sustainability Report 2020: Weathering The Storm

This 2020 Sustainability Report provides an update of our sustainability journey and the successes and shortcomings in meeting current global sustainability challenges while continuing our focus on our long-term sustainability goals. Moving forward, we will continue our journey towards value creation and realizing business growth from sustainable practices.

World-class offshore operations

South Natuna Sea Block B, Riau, Indonesia

An offshore PSC located in the South Natuna Sea with a large hydrocarbon base and best in class Health, Safety, and Environmental records. With the asset integration into MedcoEnergi’s portfolio through acquisition, it will enhance the Company’s capabilities and scale as a world class offshore operating Oil and Gas Company.

Clean Energy for a Cleaner World

Sarulla Geothermal, North Sumatera, Indonesia

The construction of Sarulla Geothermal Power Plant has started in 2014, and will produce geothermal power for 3 x 110 MW electricity. As the world's largest single-contract geothermal power project upon completion, the plant is envisioned to provide clean and sustainable electricity in Indonesia and expected to reduce carbon dioxide emission up to 1.3 million tonnes a year.

Monetizing Reserves

Block A, Aceh, Indonesia

In January 2015, MedcoEnergi inked a Gas Sales Agreement with Pertamina for over US$ 2 billion in value, monetizing 200 BCF reserves from the Block A Production Sharing Contract in Aceh Province, Indonesia. This contract demonstrates the Company’s support to the development of the Indonesian domestic gas market, at the same time creating value for the company and establishing a vital economic presence in the province of Aceh.

Bringing Back Indonesia’s Strategic Assets from Newmont

Amman Mineral Nusa Tenggara, West Sumbawa, Indonesia

The acquisition of this asset marks a monumental milestone for MedcoEnergi and our stakeholders including the Indonesian government. We commit to maintain the world-class standards of safety, environmental stewardship and social responsibility, as well as high quality workforce.

Stock

01/12/2021
MEDC-IDX
(IDR)
474
Market Cap
(Trilion IDR)
11.9
Volume
(lot)
188,643

Whistleblower

Ensuring MedcoEnergi is a safe, fair and honest place to work.
Monday, 29/11/2021 WIB Medco E&P Granted Extension to Manage Senoro-Toili Block

MedcoEnergi have been granted by the Government a 20 years extension on the Senoro-Toili Working Area

Thursday, 04/11/2021 WIB MedcoEnergi Issues a US$400 Million Bond

MedcoEnergi is pleased to announce the successful issuance of a seven-year tenor 144A/Reg S US$400 million bond with a 6.95% coupon

Tuesday, 26/10/2021 WIB MedcoEnergi Announces Audited First Half 2021 Results

MedcoEnergi announces its audited consolidated financial statements for the period ended 30 June 2021

Thursday, 26/08/2021 WIB MedcoEnergi Results of Annual General Meeting of Shareholders

MedcoEnergi held its Annual General Meeting Shareholders (AGMS) on August 26, 2021.

Saturday, 26/06/2021 WIB MedcoEnergi Announces First Quarter 2021 Results

MedcoEnergi announces its consolidated financial statements for the period ended 31 March 2021

Tuesday, 01/06/2021 WIB MedcoEnergi Announces Its Audited Full Year 2020 Results

MedcoEnergi announces its audited 2020 full-year financial results

Friday, 09/04/2021 WIB MedcoEnergi Announces Strategic Alliance with Kansai Electric Power Company

MedcoEnergi announced the completion of the transaction to form a strategic alliance between MedcoPower and Kansai Electric Power Company.

Monday, 30/11/2020 WIB MedcoEnergi Announces 2020 Nine-Month Results

PT Medco Energi Internasional Tbk announces its 2020 nine-month financial results (“9M 2020”).

Saturday, 03/10/2020 WIB MedcoEnergi Announces First Half 2020 Results

MedcoEnergi announces its consolidated financial statements for the period ended 30 June 2020.

Friday, 25/09/2020 WIB MedcoEnergi Successfully Closed Trading Period of 2020 Rights Issue

PT Medco Energi Internasional Tbk announces that it has successfully closed its 2020 Rights Issue

Medco E&P Granted Extension to Manage Senoro-Toili Block

Jakarta, 29 November 2021 - PT Medco E&P Tomori Sulawesi (Medco E&P) together with PT Pertamina Hulu Energi Tomori Sulawesi (PHE Tomori Sulawesi) and the Tomori E&P Limited (TEL) as the Contractors (KKKS) have been granted by the Government a 20 years extension on the Senoro-Toili Working Area. The extension will be effective from December 2027. The Working Area is located in Central Sulawesi and has been supplying gas since 2015 to PT Donggi Senoro LNG (DSLNG), Ammonia Plant PT Panca Amara Utama (PAU) and PT Perusahaan Listrik Negara (Persero) (PLN).

The development of the Senoro Toili Working Area will continue with the development of the South Senoro field, expected to be completed in 2025, as well as new exploration activities.

“Medco E&P is thankful for the trust and support from the Government to continue the management of the Senoro-Toili Working Area and for the good cooperation with PHE Tomori Sulawesi and TEL. The Company continues its commitment to meet the production targets set by the Government and to support the industries as well as the communities in the areas surrounding its operations through community empowerment programs," stated Medco E&P's President Director Ronald Gunawan.

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MedcoEnergi Issues a US$400 Million Bond

Jakarta, 4 November 2021 – PT Medco Energi Internasional Tbk (“MedcoEnergi” or the “Company”) is pleased to announce the successful issuance of a seven-year tenor 144A/Reg S US$400 million bond with a 6.95% coupon.

The Company’s credit ratings affirmed B+ from Fitch, B+ from S&P and B1 from Moody’s. The Company will use net proceeds to refinance existing indebtedness and/or to support its growth agenda.

The Company recently published its Climate Change Strategy aimed at reaching Net Zero for Scope 1 and Scope 2 emissions by 2050, and Scope 3 by 2060. Our Climate Change Strategy reinforces our continuous commitment towards long term sustainability goals.

Hilmi Panigoro, the President Director of MedcoEnergi said “We are pleased with the final outcome of the bond issuance, the strong support from international and domestic bond investors reflects the Company’s record of consistent delivery of our commitments, our operational performance and deleveraging plans. With the improving of commodity prices and energy demand we look forward to continuing on our path of sustainable growth”.

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MedcoEnergi Announces Audited First Half 2021 Results

Summary Results

 Financial

  • EBITDA US$318 million
  • Gross Profit US$234 million
  • Net Debt to EBITDA2 3.1x
  • Strong liquidity with cash and cash equivalents US$551 million

 Operational

  • Oil and gas production 94 mboepd
  • Medco Power generated sales of 1,355 GWh
  • Oil and gas cash production costs US$9.6 per boe
  • Capex expenditures US$28 million

Jakarta, 26 October 2021 – PT Medco Energi Internasional Tbk1 announced its audited results for the period ended June 30, 2021 (“1H-2021”).

Roberto Lorato, CEO, said “I am pleased to report improving first half results. Prices in the second half of 2021 have continued to improve and domestic gas demand is beginning to recover after Indonesia’s economic lockdowns. We have now published our Climate Change Strategy with the initial actions to reach Net Zero for Scope 1 and Scope 2 emissions by 2050, and Scope 3 by 2060."

Financial Highlights

  • EBITDA 1H-2021 was US$318 million, a 15% increase year-on-year, mainly due to recovering commodity prices. Oil prices were US$62.3/bbl, 61% higher year-on-year (US$38.7/bbl) and weighted average gas prices were US$5.9/mmbtu, 8% higher year-on-year (US$5.4/mmbtu).
  • EBITDA in the second quarter 2021 was US$159million, slightly below first quarter EBITDA despite higher oil prices due to unplanned downtime and the associated costs in our international and Aceh assets.
  • Net Profit in 1H-2021 was US$46.5 million. All three business segments reported profit with Oil & Gas US$88 million, Power US$22 million and Amman Mineral Nusa Tenggara (AMNT) US$33 million as Phase 7 performance continues to ramp up and were offset by headquarters and financing charges.
  • Capital expenditures were US$28 million consistent with the lower activity during COVID-19 restriction in 1H-2021. Expenditure will increase in the second half but full-year capital expenditure will remain inside the Company’s 2021 guidance.
  • Cash and cash equivalents at 1H-21 were US$551 million. Consolidated debt was US$2.6 billion, down 14% from 1H-2020. Restricted group3 debt was US$2.2 billion, down US$$442 million year-on-year with Net Debt3 US$1.8 billion and Net Debt to EBITDA1 3.1x.
  • The Company will continue to proactively manage its liabilities and deleverage quarter on quarter. All 2021 and 2022 IDR Bonds maturities, US$123 million are secured in escrow.

Operational Highlights

Oil and Gas

  • Oil & Gas production was 94 mboepd, down 7% from 1H-2020 due to maintenance and unplanned downtime, with domestic gas demand continuing to be subdued during Indonesia’s second quarter COVID lockdowns. Oil & Gas production cost per unit was US$9.6 per boe.
  • Oil & Gas capital expenditure was spent progressing several Oil & Gas development projects in the South Natuna Sea Block B PSC. These developments will continue into 2022 with first gas on the Hiu field expected in 2Q-2022, first gas on Belida Extension Project in 4Q-2022 and first oil on the Forel field and gas on Bronang field expected in 4Q-2023.

Medco Power

  • Medco Power generated sales of 1,355 GWh in 1H-2021 with approximately 33% from renewable sources. Power sales rose by 19% year-on-year, mainly due to improving steam performance at Sarulla Geothermal offset by lower electricity demand in Batam during local lockdowns.
  • Power capital expenditure was spent to continue commissioning the 275 MW Riau IPP, construction of the 26 MWp PV facility in Sumbawa and the 30 MW Phase-1 geothermal development at Ijen.
  • Medco Power announced that with a consortium it will develop a 100 MW pilot Solar Power Import Project with an installed generation capacity of 670 MWp from Indonesia to Singapore at Bulan Island, Kepulauan Riau Province following the award of an in-principle import license from Singapore’s Energy Market Authority.

 AMNT

  • AMNT produced 103.1 Mlbs of copper and 55 Koz of gold. Pit ore mining from Phase 7 is continuing as is the development of Phase 8.
  • AMNT won two Mining Practice Awards from the Indonesian Energy and Mineral Resources Ministry for its contribution to the environmental and conservation management.

2021 Full Year Guidance

 Company 2021 guidance:

  • Oil & Gas production 95 mboepd
  • Power sales 3,000 GWh
  • Oil & gas unit cash costs below US$10/boe
  • Capital expenditures Oil & Gas US$150 million and Power US$65 million

 

Hilmi Panigoro, President Director, said “I am pleased to see our improved performance. The announcement of the Bulan Island Solar Power Project is another step towards our Climate Change Strategy and I fully endorse MedcoEnergi's commitment to achieve Net Zero by 2050.”


1Annualized and excluding PT Medco Power Indonesia (“MPI” or “Medco Power”)
2PT Medco Energi Internasional Tbk (“MedcoEnergi”, “Medco” or “Company”)
3Excluding Medco Power
 

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MedcoEnergi Results of Annual General Meeting of Shareholders

Jakarta, 26 August 2021 – PT Medco Energi Internasional Tbk ("MedcoEnergi" or the "Company") held its Annual General Meeting of Shareholders (AGMS) on August 26, 2021.

As well as the customary AGMS agenda items, shareholders approved resolutions for a Pre-Emptive Rights Issue and a new issue of USD Notes, both to support the Company’s growth agenda. Shareholders also approved the appointment of Ibu Yani Panigoro as Chair of the Company’s Board of Commissioners.

Hilmi Panigoro, President Director of MedcoEnergi said, "We weathered a challenging year with discipline, resilience and flexibility. The Board of Directors greatly appreciates the trust and confidence of MedcoEnergi shareholders, lenders and other stakeholders and extends its gratitude to the Board of Commissioners for their supervision and guidance.”

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MedcoEnergi Announces First Quarter 2021 Results

Summary Results

 Financial

  • EBITDA US$159 million
  • Net Income US$5 million
  • Net Debt to EBITDA2 3.0x
  • Cash and cash equivalents US$695 million

 Operational

  • Oil and gas production 101 mboepd
  • Medco Power generated sales of 666 GWh
  • Oil and gas cash production costs US$8.7 per boe
  • Capex expenditures US$9 million

Jakarta, 26 June 2021 – PT Medco Energi Internasional Tbk1 announces its consolidated financial statements for the period ended 31 March 2021 (“1Q 2021”).

Roberto Lorato, CEO said, “I am pleased to see these improved results with positive Net Income and rising EBITDA.  Commodity prices appear to have recovered, although gas demand remains weak. Our operational and safety performance remain strong, though the pandemic is clearly not over and we must maintain our strict health protocols.”

Financial Highlights

  • EBITDA US$159 million, almost double from Q4-2020 mainly due to recovering commodity prices. Oil prices were US$58.8/bbl, 14% higher year-on-year (US$51.3/bbl) with gas prices US$5.7/mmbtu, essentially flat.
  • Net Income was US$5.1 million due to both Oil and Gas operations and Amman Mineral Nusa Tenggara generating positive earnings and benefiting from recovering commodity prices.
  • Oil & Gas capex was US$6 million, low gas demand allowing expenditure deferrals. The Company will retain financial flexibility to respond to improved gas demand.  Power capex was US$3 million to progress commissioning of the Riau 275MW CCGPP. 
  • Net Debt to EBITDA2 was 3.0x, significantly improved following higher commodity prices and recent deleveraging.  Restricted Group Debt2 was US$2.3 billion, down 14% and Net Debt2 US$1.8 billion, down 7% from 1Q-2020. Consolidated Debt was US$2.7 billion, down 19% from 1Q-2020.
  • The Company has cash and cash equivalents of US$695 million.  2021 IDR Bond maturities are secured in escrow and due to proactive liability management average loan life is now 5.1 years.
  • MedcoEnergi joined the Carbon Disclosure Project and will report in alignment with the TCFD3 recommendations for 2020 onwards. 

Operational Highlights

Oil and Gas

  • Oil and gas production was 101 mboepd, flat year-on-year despite a larger gas portfolio. Gas demand remains subdued, notably in Aceh and East Java.
  • Unit cash costs were US$8.7 per boe, in line with full year guidance.
  • South Natuna Sea Block B has been granted improved economic terms upon completion of the ongoing Forel oil development.
  • Conducted an acid fracturing program on two Alur Siwah wells to optimize future gas production in Aceh.

Medco Power

  • Medco Power generated sales of 666 GWh, a 4% decrease year on year, mainly due to lower electricity demand, 32% was generated from renewable sources in Q1-2021.
  • The Riau 275MW CCGPP is 97% complete, commissioning is continuing and the facility is on track for commercial operation in Q4-2021.
  • The strategic alliance with Kansai Electric Power Company closed on 31 March 2021, strengthening Medco Power competitiveness in future gas power projects.
  • Construction is progressing on the Solar 26MWp PV facility in Sumbawa, with commercial operation expected in 1Q-2022.

 AMNT

  • AMNT produced 48 Mlbs of copper and 34 Koz of gold as AMNT continued to access pit ore from Phase 7. A Phase 8 development is now in progress.
  • AMNT obtained a one year extension on its export license for a 579,444 Wet Metric Tons and smelter project completion 27% as of January 2021.

2021 Full Year Guidance

 Company 2021 guidance:

  • Oil & Gas production 95 mboepd
  • Power sales 3,000 GWh
  • Oil & gas unit cash costs below US$10/boe
  • Capital expenditures Oil & Gas US$150 million and Power US$65 million


Hilmi Panigoro President Director said, “Both MedcoEnergi and our communities have faced some very challenging times due to the COVID-19 pandemic.  We have made a positive financial start to 2021 and MedcoEnergi will continue to support the recovery, including renewing our commitment to long term sustainable economic and social development.”     

1PT Medco Energi Internasional Tbk (“MedcoEnergi” or “Company”)
2Excluding PT Medco Power Indonesia (“MPI” or “Medco Power”)
3Task Force on Climate-Related Financial Disclosure

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MedcoEnergi Announces Its Audited Full Year 2020 Results

  

Summary Results

 Financial

  • EBITDA US$502 million
  • Gross Profit US$322 million
  • Gross Debt US$2.7 billion and Net Debt US$2.3 billion
  • Cash and cash equivalents US$446 million

 Operational

  • Oil and gas production 100 mboepd
  • Power sales 2,639 GWh, 31% from renewable sources
  • Oil and gas cash production costs US$9.0 per boe
  • Capital expenditures US$207 million

Jakarta, 31 May 2021 – PT Medco Energi Internasional Tbkannounces its 2020 full-year financial results (“FY2020”).

Roberto Lorato, CEO said “Clearly the low energy demand caused by the pandemic significantly impacted our performance last year.  We had to adapt quickly to extraordinary circumstances in order to secure the health and safety of our employees, support local communities and manage our liquidity. Commodity prices have improved in 2021 but the pandemic is not over and gas volumes in some of our key markets remain subdued. We need to remain disciplined, but retain the flexibility to take advantage of the expected recovery.”

Financial Highlights

  • EBITDA US$502 million, 20% below 2019 due to lower gas demand and liquids prices.
  • Oil prices US$40.3/bbl, 36% below 2019 (US$62.5/bbl) and gas prices US$5.2/mmbtu, 23% below 2019 (US$6.7/mmbtu). 
  • Full year 2020 was a US$189 million loss, including Q4-2020 one-time non-cash write-downs of US$93 million. Q4-2020 reported a Net Profit of US$9 million, before impairments as liquids prices began to recover.
  • AMNT2 reported a US$25 million profit with mine ore from the Phase 7 development benefiting from higher copper and gold prices.
  • Oil & Gas capex was US$144 million to complete the Meliwis project in East Java and four successful exploration wells in Natuna.  Power capex was US$63 million, to progress the Riau CCPP development and Ijen geothermal exploration drilling.
  • Cash from Operations after capex was positive despite the low energy demand, with focused expenditure reductions and Ophir synergies. Cash and cash equivalents were US$446 million.
  • Supportive shareholders and proactive Liability Management allowed continued deleveraging.
  • Debt was US$2.7 billion, down 15% from 2019. Restricted group debt3 was US$2.3 billion, down 6% and Net Debt3 was US$2.0 billion, down 4% from 2019. Net Debt to EBITDA3 was 4.2x.
  • MedcoEnergi joined the Carbon Disclosure Project and will report in alignment with the TCFD4 recommendations for 2020 onwards. 
  • Scope-1 Green House Gas emission intensity continued to improve, reduced by 12% since 2018 and a multi-year forestation program removed 363,595 tons5 of CO2 from the atmosphere in 2020.

 

Operational Highlights

Oil and Gas

  • Production 100mboepd, affected by low gas demand. Gas demand is recovering in 2021, but is still below pre pandemic levels.
  • Oil and Gas cash costs US$9.0/boe, and within guidance.
  • Four commercial exploration gas discoveries were made in the South Natuna Sea Block B PSC with the Bronang-2, Kaci-2, West Belut-1 and Terubuk-5 wells. 
  • Completed the integration of Ophir Energy’s systems, organization and office space.

 Medco Power

  • Power generation sales were 2,639 GWh, 31% from renewable sources.
  • Medco Power formed a Strategic Alliance with the Kansai Electric Power Company to operate and develop gas IPP facilities.
  • Exploration wells in Ijen, East Java discovered a steam reservoir and work is underway to prove the commercial viability of a new geo-thermal power facility.
  • The 275MW Riau CCPP is 97% complete with commercial operation expected in Q4-2021 and construction is progressing on the 26MWp PV facility in Sumbawa for completion in Q1-2022.

 AMNT

  • AMNT began processing pit ore from Phase 7 and produced 294 Mlbs copper and 132 Koz gold from pit ore and stockpile processing in 2020.
  • Phase 8 development is now in progress.
  • AMNT obtained a one year extension on its export license for a 579,444 Wet Metric Tons.

2021 Full Year Guidance

 Company 2021 guidance:

  • Oil & Gas production 95 mboepd
  • Power sales 3,000 GWh
  • Oil & gas unit cash costs below US$10/boe
  • Capital expenditures Oil & Gas US$150 million and Power US$65 million
 

Hilmi Panigoro, President Director, said “With the completion of our Kansai Electric alliance, exploration success and AMNT returning to profit it is pleasing to see Medco emerging from this difficult time as a stronger company. We are starting to see gains from our efforts on emissions and are renewing our medium term ESG and Energy Transition targets.”



1PT Medco Energi Internasional Tbk (“MedcoEnergi” or “Company”)
2PT Amman Mineral Nusa Tenggara (“AMNT”)
3Excluding PT Medco Power Indonesia (“MPI” or “Medco Power”)
4Task Force on Climate-Related Financial Disclosure
5Voluntary planting above permit compliance 

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MedcoEnergi Announces Strategic Alliance with Kansai Electric Power Company

JAKARTA, 9 April 2021 – PT Medco Energi Internasional Tbk (“MedcoEnergi”) is pleased to announce the completion of the transaction to form a strategic alliance between PT Medco Power Indonesia (“Medco Power”) and Kansai Electric Power Company (“Kansai Electric”).

Through the alliance, Medco Power and Kansai Electric will work together under a jointly owned platform to develop and operate existing and new gas-fired power plants and expand their operation and maintenance business in Indonesia. The alliance brings together Kansai Electric’s global technical expertise with Medco Power’s experience in developing and operating power plants in Indonesia.

Hilmi Panigoro, the President Director of MedcoEnergi, said, “We are delighted to enter this strategic alliance with Kansai Electric and look forward to growing our power business together”.

Eka Satria, President Director of Medco Power said “The alliance with Kansai Electric will further strengthen our capabilities and allow us to continue developing our Gas IPP and O&M businesses in Indonesia, through the application of advanced technology and best international practices”.

Established in 2004, Medco Power is a leading power producer in Indonesia, with gross contracted capacity of ~3,100 MW. Medco Power focuses on gas and renewable power, and O&M services. Kansai Electric is one of the largest Japanese power companies with a presence in 13 countries across Asia, Europe and USA with a total generation capacity of 33.5 GW.

J.P. Morgan acted as the sole financial advisor to Medco Power.

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MedcoEnergi Announces 2020 Nine-Month Results

Summary Results

  Financial

  • EBITDA US$422 million
  • Gross Profit US$288 million
  • Net Debt to EBITDA3.9x
  • Strong liquidity with cash and cash equivalents above US$600 million

  Operational

  • Oil and gas production 100 mboepd
  • Medco Power generated sales of 1,956 GWh
  • Oil and gas cash production cost US$7.6 per boe
  • Net Capex expenditures US$194 million

Jakarta, 30 November 2020 – PT Medco Energi Internasional Tbk1 announces its 2020 nine-month financial results (“9M 2020”).

Roberto Lorato, CEO said “Clearly the low energy prices caused by the pandemic have significantly impacted our operations and results. However, despite these difficult times we have progressed our strategy along multiple fronts. This year we have had exploration success in both Natuna and Ijen, signed a Strategic Alliance with a strong partner in Kansai Electric, strengthened our balance sheet with a well-supported and successful rights issue and invested cost savings and synergies into debt buy backs and repayments.  Now, as we approach the year-end, commodity prices are recovering and AMNT has returned to profit with first production from phase 7 capitalizing on rising copper and gold prices.”

Financial Highlights

  • In the first nine months, energy demand and commodity prices were impacted by the Covid-19 pandemic.  Oil prices were US$39.5/bbl, 37% below 2019 (US$62.5/bbl) and gas prices were US$5.1/mmbtu, 25% below 2019 (US$6.9/mmbtu).  Oil prices in Q3 recovered to US$40.6/bbl, up 52% from the US$26.8/bbl in Q2, however gas prices continued to fall in Q3, from US$5.2/mmbtu in Q2 to US$4.6/mmbtu in Q3, due to the contractual linkage of some contract gas prices to prior quarter oil price. In Q4, both oil and gas prices are rebounding positively.
  • Net Income was a loss of US$130 million with extremely difficult trading conditions, especially in Q2 where Net Income was a loss of US$76 million.  Net Income in Q3 was a US$34 million loss, following a dry hole in Mexican deep-water drilling, low gas prices linked to Q2 oil price and continued low electricity demand in Medco Power. AMNT reported a Q3 profit of US$21 million, the first quarterly profit since 2016 with first production from phase 7 benefiting from higher copper and gold prices.
  • EBITDA was US$422 million, down only 5% year-on-year due to cost efficiencies and synergies after completing the integration of Ophir Energy, offsetting the impacts of low energy demand.
  • Liquidity remains strong with US$618 million cash and equivalents at 30 September, up from US$596 million at year-end 2019.
  • Capital expenditures were US$194 million, US$147 million in Oil & Gas spent on completing the Meliwis project in East Java, successful exploration drilling in South Natuna Sea Block B and US$47 million in Medco Power for the construction of the Riau CCPP and Ijen Geothermal exploration drilling.
  • A successful rights issue was completed in September, 43% oversubscribed and raising IDR1,785 billion (~US$120 million) with 98% of shareholders subscribing. 
  • In Q1 2020 the Company conducted a tender offer of its US$400 million 144A/Reg S Senior Notes and in August exercised a call option on the remaining Notes.
  • Gross Debt1 at nine months was US$2.5 billion, down 6% year-on-year with Net Debt1 US$2 billion, down by 9% year-on year. The Company will maintain a leverage target of 3.0x and continue to reduce debt each quarter with the expectation that commodity prices will recover in the near term.
  • In subsequent events in November the Company repaid ~US$170 million of IDR Bonds and purchased a further US$6 million of its own USD Notes.

Operational Highlights

  • Oil and gas production was 100 mboepd, within guidance, though gas demand continues to be significantly below normal pre Covid-19 pandemic levels.
  • Unit cash costs were US$7.6 per boe, within guidance, despite additional costs to maintain business continuity and employee safety during the Covid-19 pandemic.
  • A two well platform drilling program at Kerisi, South Natuna Sea Block B PSC in July increased in oil production and gas deliverability.
  • Four commercial exploration gas discoveries were made in South Natuna Sea Block B PSC with the Bronang-2, Kaci-2, West Belut-1 and Terubuk-5 wells.  These discoveries will be fast tracked for development in 2021-22 in parallel with the previously planned Hiu development.
  • Medco Power signed a Strategic Alliance with Kansai Electric Power Company to develop new gas IPP facilities in Indonesia.
  • Medco Power generated sales of 1,956 GWh. The recent exploration wells in Blawan Ijen, East Java have discovered a steam reservoir and further wells are progressing to prove the commercial viability of a future Geo-thermal development.
  • Construction of the 275MW Riau CCPP is now 91% complete and construction has begun on the 26MWp PV facility in Sumbawa.
  • The phase 7 development in AMNT began accessing productive ore with production ramping up from April 2020.  AMNT produced 192 Mlbs copper and 73 Koz of gold from pit ore and stockpile processing.

 

2020 Full Year Guidance 

  Following reduced near term energy demand revised 2020 guidance is as follows:

  • Oil & Gas production of 100 – 105 mboepd
  • Oil & gas unit cash costs below US$10/boe
  • Total capital expenditures below US$240million
  • Power sales of 2,600 GWh

 

  

Hilmi Panigoro, President Director, said “I want to express my thanks to shareholders who subscribed to the recent rights issue and have shared in Medco’s success over our 40 year history.   With the Kansai Electric alliance, exploration success and AMNT now returning to profit it is pleasing to see Medco emerging from this difficult time as a stronger company.”

 


1Annualized and excluding PT Medco Power Indonesia (“MPI” or “Medco Power”)
2PT Medco Energi Internasional Tbk (“MedcoEnergi”, "Medco" or “Company”)

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MedcoEnergi Announces First Half 2020 Results

Summary Results

  Financial     

  • EBITDA US$305 million.
  • Gross Profit US$203 million.
  • Net Debt to EBITDA1 3.7x.
  • Strong liquidity with cash and cash equivalents above US$695 million.

 Operational

  • Oil and gas production 101 mboepd.
  • Medco Power generated sales of 1,136 GWh.
  • Oil and gas cash production cost US$7.8 per boe.
  • Capex expenditures US$178 million.

 

Jakarta, 03 October 2020 – PT Medco Energi Internasional Tbk2 announces its first half 2020 financial results (“1H 2020”).

Roberto Lorato, CEO, said “The collapse in energy demand due to the Covid-19 pandemic forced second quarter oil prices below US$30/bbl and cut gas demand to a minimum. In response to these extraordinary circumstances, we have instigated workplace safety protocols to protect our people and ensure business continuity, reduced expenditures by US$200 million and revised 2020 production guidance to 100 – 105 mboepd. However, as we anticipate better times ahead our Oil and Gas segment will continue to invest in exploration and value adding capital projects, whilst Medco Power is completing its 275MW Riau CCGPP Project.” 

Financial Highlights

  • Completed a 43% oversubscribed IDR1,785 billion (~US$120 million) Rights Issue with 98% of shareholders subscribing.   
  • 1H 2020 EBITDA was US$305 million, down 5% year-on-year. Cost efficiencies and synergies from the integration of Ophir Energy reduced overhead costs by US$17 million, supporting flat EBITDA despite lower energy demand and a 39% drop in realized oil prices (1H 2020 US$38.7/bbl, 1H 2019 US$63.6/bbl). 
  • Net Income in 1H 2020 was a US$96 million loss, with profits from Oil and Gas and Power segments offset by Amman Mineral Nusa Tenggara (AMNT) losses, oil price financial impairments and losses on discontinued operations.
  • Liquidity remains strong with US$695 million cash and equivalents at 30 June, up from US$595 million at year-end 2019.
  • The Company has hedged 7.5% of 2020 production into 2021 at an average price of US$48/bbl and US$42/bbl to provide a buffer against further low energy demand.
  • In June 2020 the Company signed Agreements with SKK Migas on several Indonesian PSCs to keep the Company’s gas revenue unchanged while aligning consumer gas prices with Ministerial Decrees No.89K/2020 and No.91K/2020.
  • Capital expenditures in 1H 2020 were US$178million, US$120 million in Oil & Gas for the July completion of the Meliwis Project in East Java, successful exploration drilling in South Natuna and US$58 million in Medco Power on the construction of the Riau CCGPP and Ijen Geothermal exploration drilling.
  • In Q1 2020 the Company conducted a tender offer of its US$400 million 144A/Reg S Senior Notes and in August exercised a call option on the remaining debt.
  • Gross Debt1 was US$2.7 billion, down 8% year-on-year with improved Net Debt1 of US$2,074 million, down by 5% year-on year. Net Debt to EBITDA1 at end 1H 2020 was 3.7x, the Company will maintain its leverage target of 3.0x and will continue to reduce debt with the expectation that commodity prices will recover in the near term.

Operational Highlights

  • Oil and gas production was 101 mboepd, up 5% year-on-year following the Ophir acquisition. Gas demand is significantly below the Company’s capacity to deliver and below normal pre Covid-19 levels.
  • Unit cash costs were US$7.8 per boe, within guidance and below 1H 2019 despite US$8 million spending to maintain business continuity during the Covid-19 pandemic
  • Following commercial exploration discoveries in Q1 2020 with the Bronang-2 and Kaci-2 wells, the Company has drilled a further successful exploration well in September with the Terubuk-5 well. These discoveries will be fast tracked for development through existing South Natuna Sea PSC infrastructure.
  • Medco Power and Kansai Electric Power Company have signed a Strategic Alliance to develop new gas IPP facilities in Indonesia.
  • Medco Power generated sales of 1,136 GWh in 1H 2020, a 9% decrease year-on-year due to lower electricity demand.
  • The recent Ijen 6-1  and 5-1 exploration wells in Blawan Ijen, East Java discovered a strong steam reservoir and Medco Power is progressing two further wells to prove the commercial viability of a Geothermal development.
  • Construction of the Riau CCGPP progressed to 86%, with completion expected in 2021 and construction has begun on the 26MWp PV facility in Sumbawa.
  • Phase 7 development in AMNT began accessing productive ore with production ramping up from April 2020.  In 1H 2020 AMNT produced 106 Mlbs of copper and 37 Koz of gold.

 

               2020 Full Year Guidance

 Following reduced near term energy demand revised 2020 guidance is as follows:

  • Oil & Gas production of 100 – 105 mboepd
  • Oil & gas unit cash costs below US$10/boe
  • Total capital expenditures below US$240million
  • Power sales of 2,600 GWh

 

Hilmi Panigoro, President Director, said “I want to express my thanks to shareholders who subscribed to the rights issue and have shared in Medco’s success over our 40 year history. As I look forward I am excited to see recent exploration success in Natuna and the alliance with Kansai Electric which will unlock opportunities to expand our Gas and Power businesses.”

 



1Annualized and excluding PT Medco Power Indonesia (“MPI” or “Medco Power”)

2PT Medco Energi Internasional Tbk (“MedcoEnergi”, "Medco" or “Company”)

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MedcoEnergi Successfully Closed Trading Period of 2020 Rights Issue

Jakarta, 25 September 2020, PT Medco Energi Internasional Tbk1 announces that it has successfully closed its 2020 Rights Issue trading period. Initial subscriptions were received from 98% of shareholders, who oversubscribed by 43%. The IDR 1,785 billion (~US$122 million) proceeds will be used for General Corporate Purposes and working capital. Further details are available in the Prospectus and newspaper disclosures.

Hilmi Panigoro President Director of MedcoEnergi said, ”I would like to extend my warmest thanks to the shareholders, investors, regulators and other stakeholders for their trust and confidence in our business plan as we continue to build shareholder value. The Rights Issue pricing allowed shareholders to share in the Company‘s recent successes and has strengthened Medco‘s capital structure ahead of the continuing uncertain times ahead”.



1PT Medco Energi Internasional (“Medco”, “MedcoEnergi” or "Company")

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