Medco almost doubles 3Q net profit

Medco almost doubles 3Q net profit

JAKARTA (JP): Publicly listed oil and gas company PT Medco
Energi Internasional booked Rp 530 billion (US$56 million) in net
profit in the third quarter of this year, almost twice the Rp 282
billion recorded during the same period last year.

Medco's third quarter revenue increased by 82 percent to Rp 2
trillion from Rp 1.1 trillion for the corresponding period last
year, the company said on Saturday.

"These significant increases in revenue and net income were
primarily due to an increase in average crude oil production in
the first nine months of 2000," Medco said in a press statement.

Medco said that a strong cash flow allowed the company to
settle some of its debts as of September 30, this year, thus
lowering its outstanding debt to Rp 331 billion.

The company said that revenue from its oil and gas production
represented 80 percent of its total revenue, compared to only 64
percent last year.

By the end of September, its crude oil production had risen by
62 percent to 65,000 barrels of oil per day (bpd) from 40,000 bpd
in the same period last year, Medco said.

"The continuing strong crude oil prices for the period
contributed significantly to Medco Energi's overall revenues,"
the company said.

According to Medco, average crude oil prices during the nine
months of this year reached $28 per barrel of oil, compared to
$16 in the corresponding period last year.

Medco said that the growth in crude oil production came from
the Semoga fields in South Sumatera, which the company discovered
in 1996.

In the first nine months of 2000, Kaji Semoga's oil production
rose by 67 percent to 53,300 bpd from 31,900 bpd during the same
period in 1999.

However, during the same period gas sales dropped by an
average of 67.3 percent from 74.4 million cubic feet per day
(mmcfd), the company said.

The company blamed the plunge in gas sales on lower than
expected demand from fertilizer and methanol plants.

The company also said that revenues from its offshore and
onshore drilling services dropped to Rp 193 billion from Rp 209
billion last year.

Medco also reported a drop in its methanol businesses, due to
a 2 1/2 month shutdown of its methanol plant while undergoing a
major turnaround.

It said that for the third quarter of 2000, its methanol sales
fell to 100,860 metric tons from 206,600 in the same period last
year.

Consequently, this year's methanol revenue fell to Rp 76.5
billion from Rp 143 billion last year.

For this year's third quarter, Medco's direct costs rose by 31
percent to Rp 766 billion from Rp 585 billion, the company said.

Medco gave no explanation for the costs increase.

As for the year 2000, Medco said it predicted that crude oil
production would reach an annual average of 67,000 bpd and gas
sales 70 mmcfd, as a result of continued oil development drilling
in all of its operating areas.

In October, Medco's average crude oil production reached
72,200 bpd while gas production reached 67.3 mmcfd, the company
added.

Medco also estimated that its rig utilization would increase
slightly, as more oil companies were planning to increase
drilling activities because of favorable oil price predictions.

Methanol prices, Medco said, had improved considerably since
the end of the first semester, and this trend was expected to
continue for the rest of this year.

Following the turnaround, the company's methanol plant is
producing an average of 930 tons of methanol per day, up from the
previous 800 tons.

Medco is Indonesia's largest private oil and gas company, and
ranks fourth in size among all of the production sharing partners
of state oil and gas firm Pertamina. (bkm)