Medco output may surge 18% after acquisition

The Jakarta Post, Jakarta

Publicly listed energy company PT Medco Energi Internasional expects its oil and gas output to soar by 18 percent after acquiring a majority stake in Australia-based Novus Petroleum Ltd.

In a press statement on Tuesday, Medco said that by taking into account Novus' production, the company expected its oil and gas production to increase this year to 33 million barrels of oil equivalent (MMBOE) from 28 MMBOE last year.

"The successful acquisition of Novus will mark the entrance of Medco to the Middle East region, as Novus owns interests in seven blocks in Oman, United Arab Emirates and Qatar," said Medco.

Medco -- which was founded by businessman-turned-politician Arifin Panigoro -- also expects that its proven oil and gas reserves as a result of the acquisition will increase by 50 percent to about 210 MMBOE from 140 MMBOE as of the end of last year.

As of June 21, 83.36 percent of Novus shareholders had accepted Medco's offer to buy the shares of the Sydney-based company for A$1.90 each, or a total of A$350 million.

Shareholders that have accepted the offer include Novus' largest single entity shareholder Japan's Mitsui & Co., which owns 13 percent of Novus.

The bid offered by Medco is higher than those of Australia's Sunov Petroleum Ltd, which offered A$1.85 per share, or A$341 million.

Medco shares ended higher at Rp 1,350 from 1,325 on the Jakarta Stock Exchange on Tuesday.