Gulf Indonesia won't return to markets soon
Gulf Indonesia won't return to markets soon
NEW YORK (Reuter): Gulf Indonesia Resources Ltd has no immediate plans to return to the capital markets and will fund capital spending of $275-$300 million a year from cashflow and credit, president Richard Auchinleck said.
"The first issue was many times oversubscribed," he said in an interview after the first day of trading of the company on the New York Stock Exchange.
Auchinleck expected details of an over-allotment option to be announced soon.
Late Monday, 21 million shares of Gulf Indonesia, which is majority owned by Gulf Canada Resources Ltd [GOU.TO], were priced at $19.50 per share and an additional 3.15 million are available as an over-allotment option if demand is strong.
Auchinleck said that Gulf Canada will not be offering any more shares in the company and will retain 72 percent, assuming the over-allotment option is exercised.
The stock rose strongly on its first day, closing up 2-3/4 at 22-1/4 and Auchinleck said he hoped a parallel listing on the Jakarta Stock Exchange would be achieved in three months.
Auchinleck said Gulf Indonesia could have net unrisked reserves of 1.7-3.6 billion barrels of oil equivalent, compared with 350 million boe of proved and probable reserves at present.
"Our exploration success is 50 percent compared with 10-15 percent for a good international exploration and production company and we are finding reserves at $2.00 per barrel," he said.
Gulf Indonesia will drill 40 wildcat wells over the next 30 months and plans to bring on an additional 25,000 barrels of oil equivalent production in August 1998.
It currently produces 25,000 barrels per day, all oil, and Auchinleck said that, on average, Gulf Indonesia will increase production by 50 percent a year over the next three years.
Apart from the initial oil production, Gulf Indonesia's main target is the rapidly developing market for natural gas in Southeast Asia.
Gulf Indonesia said the Indonesian government aimed to increase the percentage of natural gas used in electric power generation from seven percent of energy used for electricity to 22 percent.
"We will be replacing crude and heating oil," Auchinleck said. Production from its main development, the Corridor Block Gas project in South Sumatra will come onstream at 300 million cubic feet a day next year.
The company will also develop the West Natuna gas field to supply Singapore, again displacing oil as fuel for making electricity.