Allocate US$ 150 Million, Energi Mega (ENRG) Ready to Boost Production

CORPORATE STRATEGIC - JAKARTA. PT Energi Mega Persada Tbk (ENRG) is targeting an increase in oil and gas production this year.

ENRG Investor Relations Advisor Herwin W. Hidayat revealed that to boost performance this year, the company has allocated capital expenditure of up to US$ 150 million.

"For development drilling costs, gas pipeline construction, additional production facility construction, and others are included in the total capital expenditure budgeted around US$ 150 million," said Herwin to Kontan, on Wednesday (13/3).

Herwin explained that this year they are ready to increase oil and gas production in the range of 10% to 15%. As a comparison, in 2023 the average daily production of ENRG reached 5,700 barrels of oil per day (BOPD) and 165 million cubic feet of gas per day (MMSCFD).

Efforts to boost operational performance this year and in the future are also supported by the discovery of new gas reserves from the Bentu Block operated by ENRG's subsidiary, EMP Bentu Ltd.

Previously, EMP Bentu announced a gas discovery in the Bentu Block of 126 billion cubic feet (BSCF). The gas in place was obtained after drilling activities at the CEN-01 gas well.

EMP Bentu Ltd targets to start gas production from the CEN-01 well with an average volume of 45 million cubic feet of gas per day in the future.

Meanwhile, with an assumed gas selling price of US$ 6 per MMBTU, the additional gas production of 45 million cubic feet of gas per day is estimated to be worth about US$ 270 thousand per day (about US$100 million per year).

Herwin explained that they are currently following up on the new gas discovery in the Bentu Block with development drilling activities, gas pipeline construction, and additional production facility construction this year and next year. The new gas discovery is targeted to start production in 2025.

Herwin assured that acquisition efforts remain a company focus this year. The criteria for targeted oil and gas blocks are those that are already in production or in the development stage.

"We always consider the potential acquisition of oil and gas assets that are already in production or still in the development stage as long as these new assets can add value for shareholders," added Herwin.

Herwin explained that from 2020 to 2023 they were quite active in adding new oil and gas assets.

For example, in September 2021 ENRG announced the company's success in winning the South CPP oil and gas block in Riau Province, Sumatra in an auction conducted by the Government. This information was confirmed by the Ministry of Energy and Mineral Resources (ESDM) previously on September 4, 2021.

Then, in February 2022, ENRG received government approval for the transfer of all shares of PT Energi Maju Abadi (EMA).

EMA has a 49% participating interest (PI) in the Working Area or Sengkang Block located in South Sulawesi. This is a follow-up to the Conditional Sale and Purchase Agreement that was signed by ENRG and its subsidiary in August 2021.

Thus, ENRG now officially holds a 49% participation right in the block that has proven and measurable gas reserves of 420 billion cubic feet.

Then, in July 2023, ENRG through its subsidiary, PT Aceh Energy, signed a cooperation contract to operate the Bireun Sigli Cooperation Contract (KKS) asset in Aceh on Tuesday (25/7).

ENRG, through its subsidiary, owns 64% of Aceh Energy's shares.

Just so you know, the Bireun Sigli KKS asset is an oil and gas asset that covers an area of 4,845 km2 and is located about 70 km from the Arun LNG project. The Bireun Sigli KKS asset uses a Cost Recovery scheme with a contract duration of 30 years

"We always consider potential acquisitions including increasing ownership of existing assets such as Malacca oil assets in Riau, Kangean gas assets in East Java," concluded Herwin.