Thai?s PTT acquires Medco?s stake
Monday, October 8 2001 - 03:55 PM WIB
PTTEP in an announcement to the Stock Exchange of Thailand Monday said it had signed an agreement Oct 7 for the purchase of the New Links stake from Cumin Ltd of the Credit Suisse Boston Group for about US $225-mil, or about $0.1975/share of Medco.
The purchase is expected to be completed at the end of 2001, said the statement.
Following the transaction, PTTEP will hold 40 percent of New Links while the remaining 60 percent will be held jointly by the Encore International Ltd, which is run by the family of businessman cum politician Arifin Panigoro and Cumin.
Medco pumps about 82,400 barrel per day of crude.
As Medco is listed on the Jakarta Stock Exchange, PTTEP will have to comply with the Indonesian capital market regulations on the transaction, the Thai company said. This may result in PTTEP being required to make a tender offer to the minority/public shareholders of Medco for all of Medco shares. PTTEP said it was consulting with the Jakarta Stock Exchange for clarification on this issue.
Meanwhile, "the company has carefully taken into account the investment risk in Indonesia together with Medco's growth potential," it said. "After such consideration, we believe the investment to be appropriately priced at $1.74/bbl oil equivalent of proven reserves and to be in accordance with PTTEP's policy to expand investment to overseas, increase oil reserves, and secure crude supply for national energy security."
Medco is involved in upstream oil and gas exploration and production in Indonesia via its subsidiaries Exspan Sumatra and Exspan Kalimantan. As of the beginning of year 2001, it had proven reserves of 315-mil boe, with 70 percent being oil. For the first six months of 2001, Medco's production averaged 88,200 boe/day, ranking it the country's third largest crude producer. Medco also provides drilling services to the oil and gas industry and operates a methanol plant at Bunyu with a production capacity of 300,000 mt/year. (*)