Drilling firm to sell shares for local and overseas expansion
Drilling firm to sell shares for local and overseas expansion
JAKARTA (JP): PT Medco Energi Corporation, a private domestic
company specializing in drilling for oil exploration and
production, will offer 22 million new shares to the public to
raise Rp 100 billion (US$46.13 million) to finance its overseas
expansion projects.
The company's director of finance, Sugiharto, told reporters
after a presentation here yesterday that 35 percent of the funds
to be raised from the initial public offering (IPO) will be used
to finance the expansion of offshore drilling activities in Asian
countries.
"Medco is planning to participate in tenders for drilling
wells for oil and gas exploration in Vietnam and China, which are
developing their oil sources to support their economic
development," Sugiharto said.
He said another 16 percent of the fund will be used to finance
the development of a gas field in Tarakan, East Kalimantan,
another 26 percent to increase the company's working capital and
the remaining 23 percent to repay the company's debts with
several banks.
Sugiharto said the offshore drilling activities, abroad and
domestic, including the procurement of two oil rigs, will cost
the company $42 million and the gas field development $50
million, while the working capital will get an injection of $12
million.
Debts
He declined to mention the total amount of the company's
borrowings from several banks but according to its financial
report, its current liabilities as of the first quarter of this
year were recorded at Rp 94.9 billion.
Medco is a holding company with two subsidiaries -- PT Meta
Epsi Antareja and PT Apexindo Pratama Duta -- involved in onshore
and offshore drilling, and two other subsidiaries -- PT
Etaksatria Petrasanga and PT Eksita Pantranagari -- operating in
oil and gas exploration and production.
Medco, which will be the first oil-based company to be listed
on the country's capital market, has appointed PT Niaga
Securities and PT Rekaprima Sekurita as leading underwriters.
A director of Niaga Securities, Arsianto Poerwanto, said Medco
will offer its shares by the end of this month and list the
shares on the Jakarta Stock Exchange in September.
Medco's president, Hertriono Kartowisastro, said the company
is now operating two oil fields under production sharing and
technical assistance contracts with the state oil company
Pertamina.
The production sharing contract promises Medco a 15 percent
share of oil production and 30 percent share of gas production,
while the technical assistance contract promises a 35 percent
share of both oil and gas output after the recovery of
investments for exploration. (02)