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Investor FAQ

Operation

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 Production Sharing Contract (PSC), how does it work?

An original PSC is awarded to explore for and to establish commercial production. The PSC is usually awarded for a period of 30 years, subject to discovery of commercial quantities of oil and gas within a certain period. In each PSC, the contractor and SKK Migas share the total production in any given period in a ratio agreed between the two under the terms of that PSC. The contractor generally has the right to recover all funding and development costs, as well as operating costs, in each PSC against available revenues generated by the PSC after deduction of first tranche petroleum (“FTP”). All PSCs in Indonesia are sublect to DMO under which the contractor is required to supply, at a reduced price, usually 25% of market price.

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MedcoEnergi exploration success ratio? Benchmarked to Industry?

MedcoEnergi average historic discovery ratio is 41%. Industry average in Indonesian is around 20%.

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What is MedcoEnergi International competitive advantage?

MedcoEnergi’s competitive advantage is with its knowledge in maintaining mature fields production and lengthening the productivity of its assets as well as having a very close relationship with the government of countries in which the Company operates.

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What is MedcoEnergi's current reserve position?

As of September 30, 2014 MedcoEnergi has gross 1P reserve of 220.3 mmboe (44% oil, 56% gas) and gross 2P reserve of 293.9 mmboe (48% oil, 52% gas). In addition to that, MedcoEnergi also has contingent resources of 181.4 mmboe (25% oil, 75% gas) which consist from assets in Senoro Toili, Simenggaris, Libya and Yemen.

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How will MedcoEnergi manage its reserve replenishment ?

The Company will undertake three strategies in improving/replenishing the reserves which are: 1. Acquired more fields that fit in the niche market in which the Company operates 2. Maintain our exploration program. 3. Enhance the current portfolio by drilling new wells and using technology to boost reserves and production.

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What are the expected oil & gas production for 2015?

We aim to maintain the same level of oil and gas production as it was in 2014 with the addition of Senoro Gas contribution which is targeted to start its production in mid-2015.

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Lifting costs and Total costs?

Our current blended oil and gas lifting cost for the period of 9M14 is USD13.7/barrel oil equivalent (BOE). If we add General and Administrative Expenses for E&P activity as well as Depletion, Depreciation and Amortization costs, the total cost would be USD20.5/BOE.

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What is MedcoEnergi’s strategy to maintain future growth?

For the next five years the company will focus its effort in delivering its under development assets which will drive the company’s mid and long-term underlying growth. These assets includes: 1. Senoro gas field in Senoro-Toili block PSC-Joint Operating Body (JOB), Central Sulawesi; 2. Block A gas fields in Block A, Aceh; 3. International oil project in Area 47 Libya; 4. Off-shore, shallow water oil development in Tunisia; 5. Enhanced Oil Recovery (EOR) in the Rimau Block. Aside from these developments, the Company will also look into acquisition opportunities in the oil and gas industry as well as doing explorations to prove more reserves for future developments.

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What is the latest status on Medco Power Indonesia?

MedcoEnergi currently holds minority ownership at 49% shares in Medco Power Indonesia together with its partner Saratoga Power who owns 51% shares. MedcoEnergi believes electricity remains an attractive business and can provide added value to the Company in the future by pursuing new projects such as:

  • A Combined Cycle Power Plant or CCPP project in Panaran I through Mitra Energi Batam (30MW)
  • Build and operate Simple Cycle GasTurbine Power Plant of 70 MW in Tanjung Uncang, Batam upgradeable to 110 MW (CCPP)
  • Two geothermal projects in Sarulla, North Sumatra (3x110MW) currently under construction and in Ijen, East Java (2x55MW)
  • Mini hydro projects in West Java and Sumatera with total targeted capacity of 45MW.

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What is the Update on Libya?

MedcoEnergi made 18 hydrocarbon discoveries out of 20 explorations drilling in Libya. To date, the technical resources amounted up to 600 MMBOE. Currently the project is in development stage, Front End Engineering and Design (FEED) is targeted to be completed in 2015, followed by appointment of the contractor for EPC (Engineering, Procurement and Construction) as well as major equipment purchases. Exploration and appraisal well drillings for phase-2 will also resume since the extension approval has been obtained.

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What are your recent acquisition transactions?

As part of the Company’s strategy to accumulate hydrocarbon reserves and production, inorganic growth through acquisitions is one way to achieve it. MedcoEnergi has acquired several international oil and gas assets in the past few years. Some of the most recent ones include Block 9 in Yemen, PPL470 in Papua New Guinea, 8 blocks in Tunisia and Block 56 in Oman.

Others

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Who are the founders of the Company?

The Panigoro Family, with Mr. Arifin Panigoro acting as the patriarch, started the company as a drilling service company back in 1980. The family has other businesses outside the oil and gas sector such as forestry and plantation, bank, property, etc.

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Is Mitsubishi a shareholder of Medco?

Mitsubishi is currently an indirect shareholder of MedcoEnergi with effective ownership of 20%.

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Dividend history and policy ?

We promised at least 20% of our profits as dividend in our IPO and we strive to maximize our shareholders return. We have distributed dividends ranging from 25% - 40% in past three years. It indicates the flexibility for dividend distribution depended upon the company’s strategy.