Medco boosts oil production for listing in New York<\/p>\n
JAKARTA (JP): The largest national private oil and gas company
\nPT Medco Energi International said it was boosting crude oil
\nproduction to increase its asset value as it eyed listing on the
\nNew York Stock Exchange.<\/p>\n
Company director Hilmi Panigoro said that the company's main
\nconcern was to boost production and find new reserves to increase
\nits asset value.<\/p>\n
\"We expect to raise production levels to 70,000 barrels oil
\nper day (bopd) by the end of this year from the current 68,000
\nbopd,\" Hilmi told The Jakarta Post during the Medco Group's
\nannual sports outing on Saturday.<\/p>\n
He said Medco had met this year's targeted production increase
\nof 50 percent, surging to 68,000 bpd from 42,000 bopd last year.<\/p>\n
Medco floated its shares on the Jakarta Stock Exchange in
\n1994 and recently announced it planned to also list its shares on
\nthe New York Stock Exchange.<\/p>\n
But, Hilmi said, the company's assets were currently still too
\nsmall for listing on the New York Stock Exchange.<\/p>\n
\"We're talking here about an international stock market, if
\nwe're too small no one will notice us,\" he said.<\/p>\n
According to him, a company needs to have at least $1 billion
\nin asset value to attract investors in New York.<\/p>\n
In comparison, Medco's current asset value is only between
\nabout $300 million to $400 million, Hilmi said.<\/p>\n
\"This means we must boost production and reserves to the point
\nwhere our size becomes attractive,\" he explained.<\/p>\n
Hilmi estimated that by mid 2002 the company's asset value
\nwould be large enough for listing on the New York Stock Exchange.<\/p>\n
He further said that in order to maintain the company's
\ncurrent production level, it was investing heavily in exploration
\nactivities.<\/p>\n
This year alone, he said, Medco will spend some $24 million
\nfor exploration drilling.<\/p>\n
\"Our spending for exploration drilling will reach record
\nhighs,\" he said, adding that Medco's average spending on
\nexploration drilling ranged between $5 million to $10 million per
\nyear.<\/p>\n
He said the company's current proven reserves are 300 million
\nbarrels. But it needs to find new reserves of some 24 million
\nbarrels per year to maintain a production level of 70,000 bpd,
\nHilmi said.<\/p>\n
In February this year, the company acquired the interest of
\nUnion Texas Tomori Inc in the Senoro and Toili blocks off the
\ncoast of Sulawesi with proven reserves of 100 million barrels of
\noil and 2.1 trillion cubic feet of gas respectively.<\/p>\n
In January, the company acquired majority stakes in Western
\nSimenggaris Petroleum Pty. Ltd, which runs oil and gas operations
\nin East Kalimantan, and in Western Madura Pty. Ltd., which
\noperates oil and gas fields in Madura, East Java.<\/p>\n
Another factor crucial to listing Medco's shares in New York
\nwas timing, Hilmi said.<\/p>\n
\"We have to make sure that the market sentiment will have
\nreached its peak when we go public in New York,\" he said.<\/p>\n
He said a bullish oil market such as today's would provide
\npositive sentiment to the market.<\/p>\n
Medco founder and now member of the company's board of council
\nArifin Panigoro said that after listing on the New York Stock
\nExchange, Medco would look out for strategic partners to
\nstrengthen its global competitiveness.<\/p>\n
He cited Malaysian Petronas as a potential partner to Medco.
\n\"We've been in talks for quite some time,\" he said. (bkm)<\/p>",
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