Subject: (BN ) Energi Mega May Sell Stakes in 4 Petroleum Areas to S Date: Fri, 19 Oct 2007 00:34:05 -0400
Energi Mega May Sell Stakes in 4 Petroleum Areas to Share Risks 2007-10-18 23:18 (New York) By Leony Aurora Oct. 19 (Bloomberg) -- PT Energi Mega Persada, Southeast Asia's second-largest oil and gas explorer by market value, may sell stakes in four petroleum areas in Indonesia to accelerate development of the concessions and reduce financial risk. Jakarta-based Energi Mega may sell parts of Bentu, Korinci Baru, and Gelam areas in Sumatra island as well as Semberah block in Borneo, said President Director Christian Ponto. The proposed sale may help Energi Mega hasten development of the gas areas and benefit from record crude oil prices. The company will look to acquire gas concessions in Indonesia and overseas to make up for the loss of the stake of oil and gas rights. The company in March sold a 50 percent stake in its biggest gas area in East Java to a group including Mitsubishi Corp., which will spend $400 million to develop the field. ``If you hold 100 percent in an oil and gas area, you are in trouble,'' Ponto said in an interview in Jakarta yesterday. ``The character in oil and gas is high risk and high investment. Sharing risk is important.'' The areas have combined proven and probable reserves of 122 million barrels of oil equivalent, of which about 82 percent is gas, according to the company's Web site. Energi Mega is requesting approval from oil and gas regulator BPMigas to sell the stakes, Ponto said, declining to name potential buyers. Crude oil for November delivery rose to a record $90 a barrel in New York after the U.S. dollar fell against the euro and concerns of Turkish attack against Kurdish rebels in northern Iraq. Higher Prices Record crude prices allow Energi Mega to ask for higher prices for its gas, an alternative fuel, Ponto said. The company will seek at least $4 a million British thermal units in new contracts, 48 percent higher than current prices, he said. The company will raise prices annually. Energi Mega sells gas at an average of $2.7 a million British thermal units in existing contracts. The company is in talks with buyers including state utility PT Perusahaan Listrik Negara to increase prices in existing contracts by more than 30 percent to about $3.5 a million British thermal units, Herwin Hidayat, head of investor relations, said on Oct. 9. The plan to revise gas prices higher and record oil prices have boosted Energi Mega's shares 48 percent to 1,350 rupiah between Oct. 8 and yesterday in Jakarta. In comparison, PT Medco Energi Internasional, the country's biggest publicly traded oil company, rose 6 percent while PT Bumi Resources, Indonesia's largest exporter of power station coal, gained 27 percent in the same period. Most Expensive ``Market may clearly be overreacting'' on the news of price negotiations, Credit Suisse Group's Hong-Kong based analyst Edwin Pang wrote in a note yesterday. Energi Mega, 65 percent owned by the family of Welfare Minister Aburizal Bakrie, is trading at 44 times its estimated earnings next year, the most expensive among the eight largest energy stocks in Jakarta, according to data compiled by Bloomberg. The company aims to raise production by 35 percent to as much as 34,000 barrels of oil equivalent a day next year, Ponto said. Additional output will come from Sepanjang field in East Java, which resumed operation at 3,500 barrels a day on Oct. 8 after shutting down for six months because of problems with the oil storage facility. The Korinci Baru and Semberah blocks are expected to boost output 76 percent to 30 million cubic feet a day in the second half of this year, compared with the first half, the company said in a presentation to investors posted on its Web site. --With reporting by Arijit Ghosh in Jakarta. Editors: Russell (jal). To contact the reporter on this story: Leony Aurora in Jakarta at +62-21-3435-3023 or [EMAIL PROTECTED] To contact the editor responsible for this story: Reinie Booysen at +65-6212-1154 or [EMAIL PROTECTED] [TAGINFO] ENRG IJ CN 8058 JP CN 8002 JP CN 1662 JP CN NI INDO NI ASIA NI ASIAX NI SEASIA NI EM NI CMD NI OIL NI GAS NI FIELD NI NRG NI JAPAN NI CEO NI WIN #<520760.4093270.1.0.53.12385.25># -0- Oct/19/2007 03:19 GMT __________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com
