MedcoEnergi announces the signing of Memorandum of Understanding (MoU) to develop Coal Bed Methane (CBM) business executed by and between PT Medco Energi CBM Indonesia, a subsidiary of the Company, and Korea Gas Corporation (KOGAS). This MoU was signed by the Chief Operation Officer of MedcoEnergi, Frila B. Yaman and Vice President of KOGAS Ik-Hyun Park on March 14, 2012 at The Energy Building, 28th Floor, Jakarta.

This MOU signing commences the mutual cooperation in the area of CBM development for both companies. MedcoEnergi and KOGAS will jointly identify and study all the best possibilities in implementing projects that can monetize and add value to CBM, including business opportunities relating to CBM industry, such as: Liquefied Natural Gas (LNG), pipelined gas, Dimethyl Ether (DME).

Currently, MedcoEnergi has signed three Production Sharing Contracts (PSCs) of CBM, located in South Sumatra and overlying with MedcoEnergi’s oil and gas PSCs working areas. The three CBM PSCs are in Sekayu, Muralim, and Lematang blocks. MedcoEnergi is the operator in the Sekayu CBM PSC and a non-operating partner in the Muralim CBM PSC, operated by Dart Energy.

In her speech, Chief Operation Officer of MedcoEnergi, Frila B. Yaman added that: “In 2012, one of the programs which will be in execution is the utilization of CBM gas for electricity. This aligns with MedcoEnergi’s support of the government's program of Electricity from CBM (CBM - to - Power)."

President Director & CEO MedcoEnergi Lukman Mahfoedz said that “This MoU signing shows the commitment of MedcoEnergi to develop CBM consistently in the support of the National Energy Policy of Indonesia by providing energy through developing various energy potentials in Indonesia, including CBM, besides the primary source of oil and gas.” In a closing speech today, he added that "This is the second cooperation the Company has established with KOGAS, wherein the first cooperation took place in Senoro gas development project in Central Sulawesi, both for upstream and downstream activities. We hope there will be other collaborations that can interlace with KOGAS in development activities of MedcoEnergi’s upstream and downstream oil and gas in the future."

Hilmi Panigoro, MedcoEnergi President Commissioner, on the same occasion said, "We are proud that KOGAS, the largest LNG players in Asia, has selected MedcoEnergi to become partners in the development of gas in Indonesia, either natural gas or CBM This signing shows KOGAS' confidence towards MedcoEnergi and demonstrates that the Company always remains as “the Energy Company of Choice” for its partners."