Commitment for Sustainability Excellence

Sustainability Report: Sustainable Growth

MedcoEnergi is committed to contribute to the Nation’s economic growth and development. We have taken concrete actions to revamp our sustainability policies and business practices and take our strengths in the Energy sector for the benefit of the community in Indonesia. Moving forward, we will continue to invest in the future.

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 of over US$ 2 billion in value, monetizing 200 BCF reserves from the Block A Production Sharing Contract in Aceh Province, Indonesia. The customer is the state owned company Pertamina, with an agreed gas price of US$ 9.45 per MMBTU. 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

02/04/2020
MEDC-IDX
(IDR)
432
Market Cap
(Trilion IDR)
7.7
Volume
(lot)
1,493,732

Whistleblower

Ensuring MedcoEnergi is a safe, fair and honest place to work.
Monday, 20/01/2020 WIB MedcoEnergi Issues US$650 Million Bond

PT Medco Energi Internasional Tbk (“MedcoEnergi” or the “Company”) is pleased to announce the successful issue of a six times oversubscribed seven-year tenor 144A/Reg S US$65 ...

Monday, 06/01/2020 WIB MedcoEnergi Announces Audited Nine Month 2019 Results

PT Medco Energi Internasional Tbk announces its Audited results for the nine months ending 30 September 2019.

Tuesday, 17/12/2019 WIB MedcoEnergi Announces On-stream of Phase 4B Oil Development Project in Bualuang, Thailand

MedcoEnergi announces first oil from the Phase 4B Development Project on Bualuang concession in Thailand.

Friday, 02/08/2019 WIB MedcoEnergi Announces First Half 2019 Results

PT Medco Energi Internasional Tbk announces its financial results for the six months ending 30 June 2019.

Wednesday, 22/05/2019 WIB MedcoEnergi Announces Completion of Acquisition of Ophir Energy plc

MedcoEnergi today announces the successful completion of the acquisition of Ophir Energy plc in a recommended all cash offer valued at £408.4 million.

Saturday, 18/05/2019 WIB MedcoEnergi Announces First Quarter 2019 Results

PT Medco Energi Internasional Tbk announced its financial results for the quarter ending 30 March 2019 (“1Q 2019”).

Monday, 06/05/2019 WIB MedcoEnergi Issues US$650 Million 7NC4 Bond

MedcoEnergi is pleased to announce the successful issuance of a seven year 144A/Reg S US$650 million (7NC4) bond with a 7.375% coupon

Monday, 08/04/2019 WIB MedcoEnergi Announces Its Audited 2018 Results

MedcoEnergi announces its audited 2018 consolidated report for the period ending 31 December 2018

Wednesday, 30/01/2019 WIB MedcoEnergi Announces a Recommended Cash Offer for Ophir Energy plc

MedcoEnergi and Ophir Energy plc today announced the terms of a recommended all cash offer for Ophir

Monday, 10/12/2018 WIB MedcoEnergi Announces Its Limited Reviewed 2018 Nine-Month Results

MedcoEnergi announced the Limited Review of its consolidated financial statements for the period ending 30 September 2018

MedcoEnergi Issues US$650 Million Bond

Jakarta, 20 January 2020 – PT Medco Energi Internasional Tbk ("MedcoEnergi" or the "Company") is pleased to announce the successful issue of a six times oversubscribed seven-year tenor 144A/Reg S US$650 million bond with a 6.375 % coupon.

The Company received rating upgrades from B to B+ (Stable) from S&P Ratings and from a B2 to B1 (Stable) from Moody’s, while Fitch affirmed their B+ (Stable) rating. The upgrades reflect sustained improvement in the Company’s performance through improved earnings visibility, increased scale and geographic diversification following the successful acquisition and integration of Ophir Energy plc. The Company also received an MSCI ESG Rating of BB, upgraded from B following the publication of its recent Sustainability Report reflecting continued improvement to achieve its long term sustainability goals.

The Company will use the net proceeds from the recent bond to exercise its right to redeem a USD Bond maturing in 2022 and to repay IDR bonds maturing in 2021. (***)

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MedcoEnergi Announces Audited Nine Month 2019 Results

MedcoEnergi Announces Audited Nine Month 2019 Results

Summary Result

  Financial    

  • Consolidated Gross Profit US$440 million, pro forma Ophir.
  • Consolidated EBITDA US$477 million, pro forma Ophir US$605 million US$472 million. 
  • Annualized Net Debt to EBITDA1 3.9x, pro forma1 Ophir 3.0x 
  • Strong liquidity with cash and cash equivalents of US$575 million.

 Operational

  • Oil and gas production 102 mboepd, pro forma Ophir 117 mboepd.
  • Medco Power generated sales of 1,870 GWh.
  • Oil and gas cash production cost US$9.5 per boe

Jakarta, 6 January 2020, PT Medco Energi Internasional Tbk2 announces its Audited results for the nine months ending 30 September 2019. 

Roberto Lorato, CEO said, “We continue to deliver strong operational performance whilst upgrading our portfolio through selective acquisitions and divestments. The integration of Ophir operations has gone well. The US$50 million synergies we have identified, together with the seamless development of Bualuang, Thailand puts us in a great place for 2020.” 

 Financial Highlights          

  • Completed the purchase and delisting of Ophir Energy plc.  Ophir results consolidated (for the four months) from 1 June 2019.  Pro forma numbers assume combined performance from 1 January 2019.   
  • The Ophir acquisition has been immediately accretive with four months US$65 million EBITDA since 1 June, and one-time acquisition costs of US$35 million and we will realize recurring synergies of over US$50 million per annum from 2020 onwards.
  • Gross Profit US$440 million, EBITDA US$477 million with a 47% margin after the transaction costs.  Pro forma Ophir EBITDA was US$605 million.
  • Completed the sale of oil and gas assets in the USA, Tunisia and Block 5 in Mexico, sold 35% of our interest in the Rimau and South Sumatra Indonesian PSCs and exited deep-water exploration assets in Bangladesh, Vietnam, Equatorial Guinea, Aru and West Papua.  In addition sold a 51% interest in AMG (The Energy building) and diluted our interest in Amman Mineral Nusa Tenggara (AMNT) and Ijen geothermal, East Java.
  • We also acquired 100% of North Sokang PSC in East Natuna where we will drill in 2020, a further 7% in Oman KSF and 11.4% of Medco Power to gain full control.  
  • Liquidity remains strong with cash and equivalents US$575 million and pro forma capex of US$204 million.
  • Net debt to EBITDA1 3.9x, pro forma1 3.0x after debt repayment1 of US$409 million and on track to achieve the target of Net Debt to EBITDA1 of 3.0x and gross debt1 below US$2.6 billion

 

Operational Highlights

  • Oil and gas production 102 mboepd, 117 mboepd pro forma Ophir with unit cash costs of US$9.5 per boe.
  • Bualuang, Thailand, Phase 4B development produced first oil with initial production rates above expectation, at 12,900 bopd.  Upon the completion of the drilling program in mid-2020 production is expected to reach over 14,000 bopd.
  • Progress on Meliwis, the East Java gas development has reached 57% per plan, with off-shore installation completed and first gas on track for mid 2020.
  • Medco Power generated sales of 1,870 GWh, with progress on the Riau Combined Cycle Gas Power Plant at 46%, and on track for an in-service date in Q4 2021.
  • AMNT production from stockpile was 96 Mlbs of copper and 42 Koz of gold. Progress on the fully funded Phase 7 development continues with first production expected mid 2020.

         

2019 Full Year Guidance 

The company’s operational guidance for 2019 is as follows:

  • Production 100 mboepd, Ophir pro forma 110 mboepd 
  • Oil and gas unit cash costs will be maintained below US$10 per boe.
  • Capex Ophir pro forma below US$350 million.
  • Net Debt to EBITDA1 target of 3.0x1or below.

Hilmi Panigoro, President Director, said, “I am pleased to see continued strong operational and financial results. The acquisition of Ophir assets has secured our position as a leading Southeast Asia energy and natural resources company, at a time when the commodities price environment looks to be turning in our favor”.

 

1Excluding PT Medco Power Indonesia (“MPI” or “Medco Power”).

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

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MedcoEnergi Announces On-stream of Phase 4B Oil Development Project in Bualuang, Thailand

Jakarta, 17 December 2019 – PT Medco Energi Internasional Tbk (MedcoEnergi) announces first oil from the Phase 4B Development Project on the 100% owned Bualuang concession in Thailand.

The project is located in the Gulf of Thailand and comprises a new bridge-linked wellhead platform structure along with the retrofitting of extension structures to the existing platforms. Initial production rates at 12,900 bopd have exceeded expectations and upon the completion of the drilling program in mid-2020 field production is expected to peak at over 14,000 bopd.

Roberto Lorato, CEO said “I am pleased to report that the Phase 4B Development Project has reached first oil, with drilling performance 70 days faster than planned. Especially pleasing is that the project was safely handed over from Ophir in May without safety incident or disruption. Our integration of Ophir Energy plc is proceeding well, with total recurring synergies of around US$50 million per year already identified.”

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MedcoEnergi Announces First Half 2019 Results

Summary Results

Financial

  • Consolidated Gross Profit US$347 million, pro forma Ophir US$400 million.
  • Consolidated EBITDA US$343 million, pro forma Ophir US$450 million.
  • Annualized Net Debt to EBITDA1 3.6x, pro forma Ophir 2.7x.  
  • Strong liquidity with cash and cash equivalents above US$800 million.

Operational

  • Oil and gas production 96 mboepd, pro forma Ophir 120 mboepd.
  • Medco Power Indonesia generated power sales of 1,253 GWh.
  • Oil and gas cash production cost US$9.0 per boe. 

 

Jakarta, 2 August 2019 – PT Medco Energi Internasional Tbk2 announced its audited consolidated financial statements for the year ended 30 June 2019.

Roberto Lorato, CEO said “I am pleased to report our six month results with higher production and strong EBITDA.  These results include the first month of Ophir operations under MedcoEnergi control. Work to integrate the Ophir assets and organization is well advanced and we are making good progress continuing to upgrade the combined Medco and Ophir portfolio.”

 Financial Highlights

  • Completed the purchase and delisting of Ophir Energy plc. Ophir results are consolidated from 1 June 2019.  Pro forma results assume combined results from 1 January 2019. 
  • Ophir integration is on track with the focus now on system, organization and process alignment in order to realize the expected synergies. 
  • Gross Profit US$347 million.  EBITDA US$343 million with a 55% margin.  Pro forma Ophir EBITDA US$450 million up 50% year-on year. 
  • Oil, Gas and Power segments generated Net Income of US$136 million with Consolidated Net Income US$28 million, pro forma Ophir US$41 million. 
  • Liquidity remains strong with cash and cash equivalents of US$838 million. Cash from Operations was US$265 million and capital expenditures were US$63 million.  Pro forma Ophir Cash from Operations and capital expenditures were US$308 million and US$101 million respectively.  
  • Received a rating upgrade from B (Positive) to B+ from Fitch, a B (Positive) from Standard & Poor and Moodys affirmed a B2 (Positive outlook) rating. 
  • Ophir debt of US$355 million was repaid in June and a further US$105 million debt repaid in July.  End June Net debt to EBITDA 3.9x (3.6x excl. Medco Power), pro forma net debt to EBITDA 3.0x (2.7x excl. Medco Power).  All 2019 and 2020 bullet maturities are secured by funds in escrow.
  • Significant progress made to upgrade the portfolio this year with several strategic asset sales and purchases. Cash funded purchase of a further 11.4% interest in Medco Power to achieve 100% control, a further 7% in Oman KSF and expanded East Natuna acreage by purchasing 100% North Sokang PSC.  
  • Disposed of 51% Api Metra Graha, diluted AMNT position, farmed down 49% of Ijen geothermal,  sold 35% Rimau and 35% South Sumatra, 100% of Equatorial Guinea block 24, 100% Aru and West Papua IV and withdrew from Ophir’s deep-water Bangladesh block SS-11 and Vietnam blocks 123 and 124.  
  • Offers from new potential strategic partners for Medco Power are being assessed and the sales of Block 5, Mexico and Tunisia are progressing. 

Operational Highlights

  • Oil and gas production 96 mboepd, 120 mboepd pro forma Ophir with unit cash costs of US$9.0 per boe.
  • Block A, Aceh production and nominations on this recent gas development are stable at 52 – 53 BBtud.   
  • On Bualuang, the Thailand oil development work is progressing with topside installation complete and drilling on track for first oil Q4 2019.   For Meliwis, the East Java gas development, progress has reached 38% with first gas on track for Q2 2020.  
  • Medco Power generated power sales of 1,253 GWh and raised IDR850 billion sharia bonds for refinance and growth. 
  • Riau power plant construction progress has reached 34%, with an expected in-service date of Q4 2021.
  • AMNT production from stockpile was 63.4 Mlbs of copper and 28.4 Koz of gold and continues to progress the Phase 7 development and Smelter FEED.

2019 Guidance

The company’s operational guidance for 2019 is as follows:

  • Production 100 mboepd, Ophir pro forma 110 mboepd  
  • Oil and gas unit cash costs will be maintained below US$10 per boe.
  • MPI will generate power sales of 2,710 GWh.
  • Capex US$350 million, Ophir pro forma US$400 million. 
  • Net Debt to EBITDA target of 3.0x or below.

 

Hilmi Panigoro, President Director, said “I am pleased to see strong operational and financial results. The integration of Ophir operations will continue and secure our position as a leading Southeast Asia energy and natural resources company.”


1Excluding PT Medco Power Indonesia (“MPI” or “Medco Power”)
2PT Medco Energi Internasional Tbk ("MedcoEnergi" or "Company")

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MedcoEnergi Announces Completion of Acquisition of Ophir Energy plc

Jakarta, 22 May 2019 – PT Medco Energi Internasional Tbk1 today announces the successful completion of the acquisition of Ophir Energy plc2 in a recommended all cash offer valued at £408.4 million.

Ophir’s assets are highly complementary to MedcoEnergi’s existing portfolio and the combined business creates a leading regional oil and gas player in Southeast Asia.  The acquisition of Ophir will increase MedcoEnergi’s 2019 pro forma production by approximately 29% to 110 Mboepd, and combined 2P3 reserves and 2C4 resources by 86% to 1,439 MMboe.

Hilmi Panigoro, President Director of MedcoEnergi, said, “We are delighted to have successfully completed the acquisition of Ophir, which firmly establishes MedcoEnergi as a leading oil & gas player in Southeast Asia.  This acquisition further underlines our strategy to selectively expand MedcoEnergi’s presence and we believe it will create value for all of our stakeholders.”           

   
   

2019 Guidance

 

Operational guidance for 2019 is as follows:   

  • Pro-forma production will be 110 Mboepd.
  • Oil and gas unit cash costs will be maintained below US$10 per boe.
  • Medco Power Indonesia will generate power sales of 2,850 GWh.
  • Pro-forma capex will be US$400million or below.
  • Net Debt to EBITDA target will be 3.0x or below at mid-cycle prices.    

                           

 

  

 



1 PT Medco Energi Internasional Tbk (“MedcoEnergi ”or “Company”).

2 Ophir Energy plc (“Ophir”) acquired by MedcoEnergi through Medco Energi Global PTE Ltd. (“Medco Global”) a subsidiary of MedcoEnergi.

3 2018YE 2P reserves: 281.7 MMboe (MedcoEnergi) + 70.1 MMboe (Ophir) = 351.8 MMboe (Combined).

4 2018YE 2C resources: 490.6 MMboe (MedcoEnergi) + 596.6 MMboe (Ophir) = 1,087.2 MMboe (Combined). 

 

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MedcoEnergi Announces First Quarter 2019 Results

Summary Results

  Financial

  • Gross Profit US$172.3 million, 14.2% higher year-on-year.
  • EBITDA US$159.5 million, 8.2% higher year-on-year.
  • Net Income US$28.1 million, 29.7% higher year-on-year.
  • Annualized Net Debt to EBITDA1 3.1x
  • Strong liquidity with cash and cash equivalents above US$540 million.

 

 Operational

  • Oil and gas production 90.5 MBOEPD and above guidance.
  • Medco Power Indonesia sales of 624 GWh, 5.2% higher year-on-year and in line with guidance.
  • Oil and gas unit costs US$7.9 per boe and in line with guidance

Jakarta, 18 May 2019-PT Medco Energi Internasional Tbk2 announced its financial results for the quarter ending 31 March 2019 (“1Q 2019”).

Roberto Lorato, CEO said “These are very strong first quarter results driven by the ramp up of production from our Block A, Aceh field and solid performance from our other assets. The vote of confidence from rating agencies was pleasing, as was almost hitting our Net Debt to EBITDA target despite subdued oil prices of $60/bbl for the quarter.”

 

Financial Highlights
  • Gross Profit was US$172.3 million, 14.2% higher year-on-year, with an improved 60.7% gross margin (52.8% in 1Q 2018).
  • EBITDA was US$159.5 million, 8.2% higher year-on-year, with an improved 56.2% EBITDA margin (51.6% in 1Q 2018) driven by higher gas volumes and higher gas and power prices.
  • Net Income was US$28.1 million 29.7% higher year-on-year. Oil, Gas and Power segments generated Net Income of US$61.0 million up 43.8% year-on-year, more than offsetting non-cash losses in AMNT.
  • Annualized Net debt to EBITDA1 was 3.1x, with realized oil prices of $60.8/bbl and continuing the progression to achieve the 3.0x target at mid-cycle prices.
  • Issued a seven-year tenor US$650 million bond with a 7.375% coupon.
  • Received a rating upgrade from B (Positive) to B+ from Fitch, a B (Positive) from Standard & Poor and Moodys affirmed a B2 (Positive outlook) rating.
  • Completed sale of assets in the USA, 51% interest in the Energy Building and conversion and monetization of the AMNT shareholder loan.  Sales agreement signed for disposition of the Tunisia oil and gas business.
  • Liquidity continues to be strong with cash and cash equivalents of US$544 million.

Operational Highlights

  • Oil and gas production 90.5 Mboepd, driven by new production from Aceh and Yemen production re-start.
  • Unit Cash costs were US$7.9 per boe, in line with guidance.
  • MPI generated power sales 624 GWh, 5% higher year on year and in line with 2019 guidance.
  • MPI signed project finance agreements with a consortium of international banks to fund the Riau CCPP.
  • AMNT production from stockpile was 33.9 Mlbs of copper and 16.8 Koz of gold and continues to progress the Phase 7 development.

 



1Excluding PT Medco Power Indonesia (“MPI” or “Medco Power”)
2PT Medco Energi Internasional Tbk (“MedcoEnergi” or “Company”)

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MedcoEnergi Issues US$650 Million 7NC4 Bond

JAKARTA, 6 May 2019 – PT Medco Energi Internasional Tbk (“MedcoEnergi” or the “Company”) is pleased to announce the successful issuance of a seven year 144A/Reg S US$650 million (7NC4) bond with a 7.375% coupon.

The Company received a rating upgrade from B (Positive outlook) to B+ from Fitch Ratings, a B (Positive outlook) from S&P Ratings and Moody’s affirmed B2 (Positive outlook) rating at the back of the proposed acquisition of Ophir Energy Plc and continued improvement in financial performance. The Company will use the net proceeds from the bond to fund the acquisition of Ophir Energy Plc and to repay certain indebtedness.

Roberto Lorato, CEO of MedcoEnergi, said “The strong demand from bond investors reflects the Company’s record of consistent delivery on its commitments, both our operational performance and deleveraging plans.”

Hilmi Panigoro, the President Director of MedcoEnergi, remarked “We are pleased with the final outcome of the bond issue, and also the credit ratings upgrade which reflects the confidence in our company. The approval by Ophir Energy Plc shareholders is clearly another milestone demonstrating our capability to deliver a complex, multi-jurisdictional transaction. By completing the transaction in the second quarter, we expect our position will further strengthen as an integrated energy and natural resource company. We will continue to deliver on our plans and commitments for the benefit of all our stakeholders.”

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MedcoEnergi Announces Its Audited 2018 Results

2018   Summary Results

Financial

  • Gross profit1 US$645million 53% higher year-on-year.
  • EBITDA1 US$596million 37% higher year-on-year.
  • Net Debt to EBITDA1 excluding Medco Power 3.3x (3.6x in 2017).
  • Strong liquidity with cash and cash equivalents US$627million.
  • Capital spending US$329 million and below guidance.

Operational

  • Oil and gas production 85mboepd and in line with guidance.
  • Generated 2,704 GWh power sales, 24% higher year on year and in line with guidance.
  • Oil and gas unit costs US$8.7   per boe (US$9.1 per boe in 2017) and below guidance.
  • Received 20-year extensions for the Rimau and Tarakan PSCs.

 

Jakarta, 8 April 2019 – PT Medco Energi Internasional Tbk (“MedcoEnergi” or the “Company”) announced its audited consolidated financial statements for the year ended 31 December 2018 (“2018”).

 Roberto Lorato, CEO, said “Our year end results were solid, with higher EBITDA and improved operating margins from continued cost discipline. The successful completion of the Block A Aceh gas development confirms our strong project capabilities, whilst the recent approval by Ophir shareholders of our acquisition of Ophir Energy is an exciting opportunity to acquire a complementary portfolio of assets, creating enhanced scale, diversification and growth opportunities for the benefit of our stakeholders, employees, partners and host countries. We will continue to work in order to complete the transaction by the end of the second quarter”.

 Financial Highlights

  • Gross profit1 US$645million, 53% higher than 2017, with an improved 52% gross margin (46% in 2017).
  • EBITDA1  US$596million (US$582million Consolidated) up 37% from 2017 driven by improved margins, higher commodity and power prices and the full year consolidation of Medco Power.
  • Oil and gas prices increased 32% and 16% year on year to US$67.8/bbl and US$6.4/mmbtu respectively and Medco Power Indonesia (MPI) power prices (excl. fuel) increased 28%.
  • The oil and gas segment generated Net Income of US$135million increased 80% year-on-year, however Consolidated Net Income was a US$51 million loss due mainly to non-cash losses from mining affiliate PT Amman Mineral Nusa Tenggara (“AMNT”) as they accelerate development of Phase 7.
  • Net debt to EBITDA1 excluding MPI was 3.3x (3.6x in 2017). Consolidated Net Debt to EBITDA1 was 3.7x (4.5x in 2017).
  • Drilling, project efficiencies and deferrals together with favorable exchange rates allowed the Company to reduce capital spending to US$329million.
  • MPI generated power sales were 2,704 GWh, 24% higher year on year and in line with 2018 guidance following the commissioning of Sarulla Geothermal.
  • MPI raised IDR1.2 trillion from its first capital market transaction through the issue of a standard and a sharia-compliant bond.
  • The divestment of the coal mining and water infrastructure businesses were completed in 2018.  The sale of the oil and gas assets in the USA was completed in quarter one 2019 as was the sale of a 51% interest in the Energy Building. 
  • The Company received shareholder approval for a non-preemptive private placement of up to 10% of issued shares at a minimum price of IDR868/share, ~US$100million. Discussions continue to place these shares to qualified and preferred buyers.
  • The Company’s liquidity is strong with cash and cash equivalents of US$627million at year-end.

Operational Highlights

  • Oil and gas production was 85mboepd, in line with guidance and unit cash costs were US$8.7 per boe.
  • The Company received 20-year extensions for both the Rimau and Tarakan PSCs.
  • The Nowera-1 exploration well discovered gas in South Sumatra PSC and an accelerated plan of development has been approved by SKKMIGAS with first gas expected in 2021. Signed new GSA contract with PGN to sell additional gas from South Sumatra PSC for 30bbtupd.
  • MPI gross operating installed capacity rose to 2,819 MW following completion of the 330MW Sarulla Geothermal facility. MPI’s Riau gas fired CCPP development signed project finance agreements with a consortium of international banks.
  • AMNT 2018 production from stockpile was 141.9 Mlbs of copper and 70.9 Koz of gold. AMNT continues to progress the phase 7 development which is now fully financed with US$1.2Bn of committed facilities from four major Asian based banks. First production from phase 7 is expected in first half of 2020.
  • AMNT obtained the Environmental Impact Assessment and Environment Feasibility permits from the Nusa Tenggara Barat Provincial Government for development of a 1.3 million ton smelter to be located at Benete, West Sumbawa. Outotec Oyj has been appointed to develop the Front-End Engineering Design.
  • The Company published a comprehensive GRI (Global Reporting Initiative) compliant 2014-2017 Sustainability Report which included measureable commitments to future Sustainability targets.

2019 Guidance

The Company expects the acquisition of   Ophir Energy plc (“Ophir”) to be completed in the second quarter.  Operational guidance for 2019 is as follows:

  • Pro-forma   production will be 110mboepd following the completion of Ophir acquisition.
  • Oil   and gas unit cash costs will be maintained below US$10 per boe.
  • MPI   will generate power sales of 2,850 GWh.
  • Pro-forma   capex of US$400million or below.
  • The   Company will adopt a Net Debt to EBITDA target of 3.0x or below.

 

Hilmi Panigoro, President Director, said “The Company performed very well in 2018 despite a challenging business environment and our financial position has further strengthened on the back of our strong operational performance in the Oil, Gas and Power businesses.  The recent approval by Ophir Shareholders is clearly a milestone demonstrating our maturity and capability to manage a complex, multi-jurisdictional transaction. Closing the transaction in second quarter will further strengthen our position as a regional integrated energy and natural resources company.”


1Including newly held for sale assets

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MedcoEnergi Announces a Recommended Cash Offer for Ophir Energy plc
MedcoEnergi Announces Its Limited Reviewed 2018 Nine-Month Results

2018 NINE-MONTH RESULTS

Financial

  • Gross profit US$498.4 million, 68% higher year-on-year.
  • EBITDA US$450.2 million, 47% higher year-on-year.
  • Net Debt to EBITDA excluding Medco Power further declining to 3.2x.
  • Strong liquidity with cash and cash equivalents above US$500 million

 

Operational

  • Oil and gas production 83.7mboepd; an increase of 9% quarter on quarter
  • Full year production guideline maintained at 85mboepd;
  • Mandate signed with IFC to take an increased ownership stake in Medco Power.
  • Generated power sales 2,001 GWh, up by 30% year-on-year.
  • Oil and gas unit costs $8.8/boe
  • Tarakan PSC extended 20 years, until 2042

Jakarta, 10 November 2018 – PT Medco Energi Internasional Tbk (“MedcoEnergi” or the “Company”) announced the Limited Review of its consolidated financial statements for the period ending 30 September 2018 (“9M 2018”).

Roberto Lorato, CEO of the Company said that “Our nine months results were solid, with higher EBITDA and improved operating margins from continued cost discipline. In 2015 we set a net debt to EBITDA target of 3.0x and I am pleased to see further incremental progress to meeting that target.”

Financial Highlights:

  • Gross profit was US$498.4 million, 68% higher than the first nine months of 2017, with a 54% gross margin up from 50% in nine months of 2017. Over 95% of the Company’s revenue was received in US dollars, and approximately 60% of expenditures were paid in Indonesian rupiah.
  • EBITDA was US$450.2 million, 47% higher than the first nine months of 2017 driven by improved commodity and power prices and stables volumes, together with the consolidation of Medco Power. Oil and gas prices increased 39% and 11% to US$68.8/bbl and US$6.1/mmbtu respectively and average nine months non-fuel component power price year on year rose by 36%.
  • Net debt to EBITDA excluding Medco Power was 3.2x, well below the 3.6x at year-end 2017, and 6.6x at year-end 2016 and on track to meet the Company’s target of 3.0x. Consolidated net debt to EBITDA was 3.6x, well below the 4.5x at year-end 2017.
  • The oil and gas segment booked a net income of US$113.1 million, while the consolidated net loss of US$11.1 million was due to non-cash losses from mining affiliate PT Amman Mineral Nusa Tenggara (“AMNT”). AMNT completed mining phase-6 of the Batu Hijau mine in Q3 2017; subsequent revenues are generated from processing the stockpiled ore.
  • In the current uncertain price environment, the Company’s liquidity is strong with cash and cash equivalents above US$500million. Long-term gas contracts underpinned with take-or-pay quantities make up 67% of Company’s production, of which 35% are fixed price gas contracts and 32% indexed to commodity prices. A further 20% of 2019 liquids production is hedged to a Brent equivalent floor of ~$50/bbl.
  • The Company has now refinanced and combined its Senoro and Block A Reserved Based Lending (RBL) Facilities into a single RBL with an accordion to fund future developments. 
  • Drilling and project efficiencies and deferrals together with favorable exchange rates have allowed the Company to further reduce its 2018 capital spending guidance to US$340million. The Company’s consolidated capital guidance for 2019 is US$270 million, which will allow further room for deleveraging and maintain liquidity.
  • The Company has obtained revised shareholder approval for a non-preemptive private placement of up to 10% of issued shares at a minimum price of IDR868/share, ~US$100 million.  Discussions continue to place these shares to qualified and preferred buyers.

 

Operational Highlights

  • Nine-month 2018 average oil and gas production was 83.7 mboepd, an increase of 9% quarter on quarter. Block A Aceh gas development project is ramping up from current 34 mmscfd to 83 mmscfd by year-end 2018.
  • The Company is maintaining its 2018 full year guidance of ~85 mboepd and has the capacity to deliver up to 100 mboepd, subject to gas customer demand. 2019 oil and gas production guidance is 85mboepd.
  • Oil and gas unit cash costs were US$8.8 per boe.  The Company will maintain the guidance for unit cash costs to be kept below US$10.0 per boe in 2019 and 2020.
  • The Company received a 20 year of extension of the Tarakan PSC from the Government of Indonesia.
  • Medco has signed a Mandate with the International Finance Corporation to increase its stake in Medco Power. The Company has also appointed JPMorgan to identify a second strategic investor for Medco Power to support continued growth. 
  • Medco Power Indonesia’s gross installed capacity rose more than 10% year-on-year to 2,819MW, following commercial operation in May of the third and final unit of phase one of the Sarulla Geothermal facility. 2019 guidance gross installed capacity is at 2,835MW.
  • The Riau gas fired CCPP has secured Financing Declaration from PLN in September 2018. The project is now under construction, aiming to reach commercial operation in Q2 2021. Funding is being provided by a consortium of international banks.
  • AMNT continues to progress its future developments with phase 7 financing now fully secured with over US$1.2Bn of committed facilities from four major Asian based banks.  First production from phase 7 is expected in first half of 2020.

Hilmi Panigoro, President Director of MedcoEnergi, said that “I am pleased with the nine-month results and to announce the issue of our Sustainability Report which clearly lays out the Company’s commitment to long term goals for best practice sustainable operations and development.”

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