Medco 1Q net profit up 15% on higher oil output

JAKARTA (JP): Publicly listed oil and gas company PT Medco Energi Internasional said on Monday its first quarter net profit rose to Rp 187 billion (about US$16.45 million) up 15 percent compared to Rp 163 billion in the first quarter of last year, citing a more than 20 percent increase in oil production and favorable crude oil prices.

Medco president John S.Karamoy said its first quarter revenue increased by 58 percent to Rp 818 billion from Rp 518 billion during the same period last year.

"Revenue increase in the first quarter of 2001 was due to a continued increase of more than 20 percent in average oil production to 73,800 barrels of oil per day (bpd) from 60,900 bpd in the first quarter of 2000," he said, during the company's annual shareholders meeting.

John attributed the increase in oil production to the development of new oil fields, among others, in its contract areas in Rimau, South Sumatra, Sangasanga and Tarakan, East Kalimantan.

Combined with the expansion of production and pipeline facilities, the new fields have contributed a 40 percent increase to its levels of oil production, Medco said.

Last year, Medco also acquired three new working areas in Simenggaris, East Kalimantan; Western Madura, Madura Island; Senoro and Toili, Central Sulawesi.

Next to the increase in oil output, he said, Medco expected gas production to grow by 21 percent to some 80 million cubic feet per day (mmcfd), compared to 66 mmcfd last year.

Medco had said earlier that boosting oil and gas output would allow the company to benefit from the current surge in demand.

Last year, oil and gas production accounted for about 82 percent of Medco's total revenue, compared to 66 percent the year before. The company derived other income from drilling services.

John said he planned to spend around $125 million raising Medco's oil and gas output. Of that amount, $95 million would be allotted for boosting production in existing fields. The remaining $30 million would be earmarked for exploration expenses.

For this year, the company aimed at doubling its exploration activities from last year, as it targets 16 exploration wells, 815 kilometers of 2D seismic and 120 square kilometers of 3D seismic activities.

According to John, the company also planned to produce some 100,000 barrels of liquefied petroleum gas (LPG) per day at its Rimau contract area.

We plan to utilize flare gas to build the LPG facility, which is slated for completion in mid-2002," he said.

Highlighting last year's performance, Medco said it had achieved a record average daily oil production level of 66,800 bpd, 62 percent higher than the average output just a year earlier.

Despite the higher oil output, reserves have remained at 180 million barrels of oil (mmbo).

Average sales of natural gas fell slightly to 65.9 million cubic feet per day mainly as repair works at Medco's Bunyu Methanol Plant have lowered demand.

The repair work has also lowered methanol production and sales of 146,101 metric tons and 144,452 tons respectively.

Medco's shareholders meeting approved a management plan to buy back the company's shares at the maximum value of Rp 265 billion within the next 18 months.

Shareholders also agreed to pay out dividends worth Rp 277 billion, or Rp 85 a share.

Medco is the largest Indonesian owned oil and gas company after state-owned oil and gas company Pertamina.

Medco's exploration and production activities are conducted by wholly-owned subsidiary PT Exspan Nusantara, now the owner of 10 operating contracts with Pertamina.

Apart from Indonesia, Medco also has working interests in two other exploration contracts located in Myanmar. (bkm)