Medco books higher third quarter profit on oil hike
Urip Hudiono, The Jakarta Post, Jakarta
Publicly-listed oil and gas company PT Medco Energi Internasional reported a 7 percent rise in its third quarter net profit on Wednesday as compared to the same period last year due to strong oil prices.
Net profit increased to US$44.5 million from $41.4 million. Revenues increased by 19 percent to $410.3 million from $345.4 million.
"The rise in the company's revenues was mostly due to the recent surge in oil prices and a rise in our gas sales," president director Hilmi Panigoro said on Wednesday.
Global oil prices have surpassed the $50-per-barrel mark over the past month, although they have now begun to slowly decline.
Medco is the largest Indonesian-based oil company, with current assets of up to $1.42 billion.
The revenue increase, Hilmi added, was also the result of additional production from Australian-based energy firm Novus Petroleum Ltd., which Medco acquired in July.
Production from Novus helped add 5,000 barrels of oil per day (BOPD) to the company's declining oil production, which is primarily due to the aging of its Kaji Semoga main oil fields in Rimau regency, South Sumatra. Medco's average daily oil production declined from 69,370 BOPD in last year's third quarter to 59,211 this year.
The company's gas production, however, doubled to 205.5 million cubic feet per day (MMCFD), around half of which came from its Novus subsidiary. Medco's gas sales reached 102.3 MMCFD, due to new contracts it signed with state electric firm PLN this year.
In total, Medco's average daily oil and gas production volume increased 20 percent to 93,461 barrels of oil equivalent per day (BOEPD).
Besides revenues of $211.5 million from oil sales and $24.8 million from gas sales, the company also earned $74.3 million during this year's third quarter from its drilling services division.
Medco's methanol division contributed $40.6 million in sales revenue as well, although this represented a decline from $44.4 million last year.
Hilmi did not mention any new corporate plans, apart from the start of production from its Tiaka oil field in Senoro Toili, Central Sulawesi.
"Testing for production in the oil field is already starting as we speak," he said.
The company was also expecting to earn revenue from its new power plant in Batam, Riau, and from the proceeds of the sale of some Novus assets.
In an initial move into the power generating business, Medco entered into a joint venture with PLN to the gas-fired power plant in Batam, which will sell 55 megawatts (MW) of electricity at Rp 197 (21 U.S. cents) per kilowatt-hour (kWh) under a 12-year contract. Medco owns 54 percent of the power plant, which started operating in October.
Meanwhile, since November Medco has been selling Novus assets worth $110 million to Santos Ltd., Australia's biggest natural gas producer. The proceeds from these sales are expected to come in this November.