Jul 30, 2010

Energi Mega suffers Rp79 bio in loss

Indonesian oil and gas producer, PT Energi Mega Persada (ENRG) reported it’s first half still loss Rp79 billion or down 67.76% compared to previous year Rp245 billion results. 
Energi Mega achieved an 82% growth in Earnings Before Interest Depreciation and Amortization (EBITDA) in 1H 2010 due to higher realized oil price and lower production cost. In the first half of 2010, the realized oil price increased by 53% to US$79.4 per barrel from US$52 per barrel. 
At the same time, the company continues to drill lower cost development and work over wells which resulted in a 26% drop in its costs of goods sold from Rp592 billion to Rp440 billion. 
Consequently, ENRG’s EBITDA almost doubled in the first semester of 2010 to Rp144 billion than last year. ENRG’s daily oil and gas production rate volumes went down by 18% and 30% respectively, mainly driven by the lack of drilling activities in the previous year.
Imam Agustino, ENRG’s CEO, said, the net sales also grew 29.09% from IDR440 billion to IDR568 billion. He added, ENRG look forward to have healthier balance sheet and normalized drilling activities toward the end of this year. Earlier this year, ENRG used parts of the rights issue proceed to repay its loan. Consequently, the company’s debt to equity ratio improved to 0.56x and its financing charge was cut by half. Completion of the 10% stake acquisition of Masela PSC, is expected to increase ENRG’s 2P reserves by 150% soon. 
Energi Mega expects that late this year, Kangean PSC block’s Pagerungan Utara field (East Java) and Bentu block’s Segat fied (Riau, Sumatra) to deliver oil and gas productions of 5,000 barrel per day and 20 million cubic feet gas per day respectively. 
On top of that, our Kangean PCS’s TSB field (East Java) is on track to flow 300 million cubic feet of gas per day late in 2011. In May 2010, ENRG secured a Floating Production Storage Offloading to facilitate oil production from its Kangean block’s Pagerungan Utara field. Earlier this month, ENRG also leased a Floating Production Unit to develop and commence first gas from its Kangean PSC block’s TSB field. 
Earlier this year, ENRG used parts of the rights issue proceed to repay its loan. 
Consequently, the company’s debt to equity ratio improved to 0.56x and its financing charge was cut by half. Completion of the 10% stake acquisition of Masela PSC, is expected to increase ENRG’s 2P reserves by 150% soon.

Disclosure: No position at the stock mentioned above.

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