EMP to spend more than $300m to develop blocks in 2006

EMP to spend more than $300m to develop blocks in 2006

Leony Aurora, The Jakarta Post, Jakarta

PT Energi Mega Persada (EMP), the second-largest publicly listed
domestic oil and gas firm, is planning to spend more than US$300
million next year to develop existing reserves and boost oil and
gas production.

The money will also be used to develop five oil and gas fields
the company would gain with its planned acquisition of PT Tunas
Harapan Perkasa (THP), EMP president director and chief executive
Chris Newton said during the weekend.

"(Our investment program) is primarily focused on developing
proven and undeveloped reserves," Newton said.

EMP also planned to use between $30 million and $40 million,
roughly 10 percent of its budget, to explore a block in the
Strait of Malacca through its subsidiary Kondur Petroleum S.A.
next year, Newton said.

The firm's extraordinary general shareholders meeting last
week approved a planned rights issue, which is expected to raise
Rp 3.8 trillion ($380 million), in late January next year. The
meeting ruled the proceeds should be mainly used to fund the
acquisition of THP at an estimated $300 million in February 2006.

THP through its subsidiaries owns 100-percent participating
interests in the Bentu and Korinci Baru blocks in Riau, Sungai
Gelam TAC in Jambi and the Semberah TAC block in East Kalimantan,
along with a 50 percent participating interest in the Gebang
block in North Sumatra.

With the acquisition, EMP will add 435 billion cubic feet
(bcf) of gas and 31 million barrels of oil to its certified
energy reserves.

Newton said Bentu and Korinci Baru would start producing 15
million standard cubic feet a day (mmscfd) of gas in January next
year, which would be sold to state power utility PT Perusahaan
Listrik Negara.

"In the contract, (the output) will be increased to 30 mmscfd
about a year later," Newton said. Sungai Gelam would also be
developed and begin production of 20 mmscfd in the third quarter
of next year, he said.

EMP's audited net profit in the first half of the year jumped
by nearly five fold to Rp 147.4 billion as compared to Rp 31.4
billion recorded in the same period the previous year on
increased gas output and high oil prices.

As of January 2005, the company had certified probable
reserves of 319.2 million oil-equivalent barrels.

The company has earmarked some $195 million this year for
capital expenditure.