Private oil firm EMP to sell 25-30% stake

The Jakarta Post, Jakarta

The country's second largest privately owned oil and gas company PT Energi Mega Persada (EMP) plans to sell a large portion of its shares to the public next month via an initial public offering (IPO) to raise cash for development of its hydrocarbon resources.

EMP finance director Nazamudin Latief told The Jakarta Post on Friday that the company planned to offer 25 percent to 30 percent of its shares to the public at the initial price of around Rp 100 per share.

"We expect between Rp 425 billion (US$50 million) and Rp 510 billion in cash from the IPO, which will be used partly to finance the development of our new onshore oil and gas fields in East Java and Kondur Island (in the Strait of Malacca)," said Nazamudin.

The company also plans to use some of the proceeds to seek new gas and oil resources, he said.

The company has appointed PT Danatama Sekuritas as the lead underwriter for the IPO. EMP shares are expected to be listed on the Jakarta Stock Exchange (JSX) in May.

EMP is the parent company of Panama-registered oil firm Kondur Petroleum S.A. and gas producer Lapindo Brantas Inc.

Kondur produced 10,500 barrels of oil per day (bpd) last year from its production sharing contract (PSC) block in the Riau archipelago's Kondur island, which is believed to contain an oil reserve of 61 million barrels.

Nazamudin said that this year, EMP had projected an increase in its oil production to around 12,000 bpd from Kondur.

As for its gas business, EMP expected Lapindo Brantas, which operates PSC block in Brantas, East Java, to be able to produce 80 million cubic feet per day by the end of this year, up from the current 68 million to 70 million cubic feet per day, he said.

Lapindo has a contract to sell gas to PT Perusahaan Gas Negara until 2008.

According to Nazamudin, EMP recorded an operating revenue of around Rp 613 billion last year, with a profit of about Rp 115.8 billion.

For this year, the company has estimated its revenue to surge to around Rp 623 billion with a profit of around Rp 190 billion, he said.

EMP will be the country's second oil and gas company listed on the JSX after PT Medco Energi Internasional.