SUMMARY OF 2015 KEY PERFORMANCE

Jakarta, 31 March 2016 – Today, PT Medco Energi Internasional Tbk (“MedcoEnergi” or “the Company”) released its financial statements for the year ending December 31, 2015 with a gross profit of US$208 million and US$90 million operating profit. 

Hilmi Panigoro, President Director of MedcoEnergi, stated, “2015 was a difficult year for the industry in general, but the Company has emerged strongly and delivered 2015 EBITDA of US$217 million despite the low price environment.   Going forward, the new Board of Directors has set out its business priorities with the intent to improve the Company’s financial performance. These priorities include further cost and capital efficiency and prioritizing reduced project cycle time in our portfolio of domestic developments. We will also continue to exercise MedcoEnergi’s strategic position in Indonesia to create value for our stakeholders through selective domestic resource acquisitions, contract extensions as well as gas sales and subcontractor renegotiations.”

Operational highlights in 2015

         Oil production was stable year on year at 31.6 MBOPD, despite the turmoil in Yemen and was the result of successful efforts to mitigate natural decline in our domestic assets.  Gas sales declined slightly reflecting lower customer demand in 2015. As the Company focuses upon value, 2016 production is expected to be in the range of 55 to 60 MBOEPD.

         Senoro gas field was placed into service, on time and on budget in July 2015. Production from Senoro continues to exceed expectations with a gross production capacity of 355 MMSCFD. Concurrently, the Donggi Senoro LNG (“DS-LNG”) plant was also successfully placed into service. Following inauguration of both the Senoro gas and DS-LNG by Joko Widodo, President of Indonesia, DS-LNG delivered its first cargo in September 2015. In 2015, the DS-LNG plant delivered 12 LNG cargoes, and MedcoEnergi expects that to more than double in 2016 with a full year of operations.

         In July 2015, MedcoEnergi signed a 25 year extension to its Karim Small Fields service contract. The Company has operated in Oman since 2006 and the extension demonstrates Oman’s confidence in MedcoEnergi as an operator. 

         Through its power subsidiary, the Company entered into a CSPA with Aboitiz Power of the Philippines to co-develop the 110 MW Ijen Geothermal Project, and extended the PPA for the Singa power plant in South Sumatra.

         In January 2015, MedcoEnergi signed a gas contract with Pertamina for the long term delivery of 198 TBTU of gas from Block A.  This first phase of developments on this PSC is expected to begin production in 2018 following the recently awarded EPC contract to JEC.    

         Also in January 2015, MedcoEnergi signed a gas contract with Perusda Mura Energi, South Sumatra for the delivery of 8.75 TBTU over 11 years. The contract will fulfil the gas needs for electricity generation in Musi Rawas regency.

Financial Highlights in 2015

       2015 EBITDA was US$217 million despite an oil price decline of almost 50% whereas realized gas prices were essentially stable, reflecting the Company’s mix of oil and fixed price gas contracts. 

        The Company booked US$180 million net financial impairments due to the low oil price.

        Cash costs were reduced by 16%. Similarly, reduction in operational capex excluding acquisitions by 62% and in cash lifting cost 23%.  During 2016 the Company will continue to make further sustainable expenditure reductions, deferrals and where appropriate renegotiate its exploration commitments.

     The Company raised SG$100 million in early 2015, part of an overall SG$500 million Medium Term Note program and later in the year refinanced its Senoro gas plant.

       The Company ended the year with significant liquidity, closing 2015 with over US$450 million of cash reserves.