Medco proposed notes rated B+

Medco proposed notes rated B+

JAKARTA: International rating agency Standard & Poor's (S&P)
assigned its B+ rating to Indonesian oil and gas company PT Medco
Energi International with senior unsecured notes issue of around
US$200 million due in 2010.

Proceeds from the new debt will be used primarily to fund
Medco's acquisition of petroleum assets in 2003 and its intensive
exploration.

In a press release, S&P said Medco's $200 million debt is
within S&P's expectation of Medco's capital structure, whereby
total debt to capital could rise to 50-60 percent (from 16
percent in December, 2002) in the near-to-medium term, depending
on the implementation of planned activities and acquisition.

S&P also said the rating reflected the company's short proved
reserves life index of 4.8 years, which explains the company's
plans to acquire producing oil blocks in 2003, in addition to
developing its gas reserves, to immediately add to its proven
reserve base and production volume. -- JP