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ENRG prepares US$ 114 million capital expenditure

Kamis, 22 Desember 2016 / 10:45 WIB

ENRG prepares US$ 114 million capital expenditure

JAKARTA. In the next year, PT Energi Mega Persada Tbk (ENRG) will more focus on developing oil and gas blocs, rather than expanding its business. Due to efficiency, the issuer of Bakrie Group prepares US$ 114 million capital expenditure for 2107, or lower 10% than 2016 capital expenditure.

President Director of ENRG Imam P. Agustino said, most of capital expenditure will be allocated to boost the production. To date, some oil and gas fields have matured so that ENRG productions are expected to decrease.

ENRG is targeting 40,000 barrels oil equivalent per day (boepd) in 2017. This is lower than the total productions of 42,300 boepd during January-September 2016.

“The productions declined, including in Malacca Bloc,” Imam said. To date, ENRG is managing four assets, which are contributing to the company. Aside of Malacca Bloc, ENRG is also managing oil and gas in Bentu, ONJW, and Kangean Blocs.

ENRG is likely to produce more gas than oil. “Gas revenues are like to be higher than oil revenues,” said Investor Relations of ENRG Herwin W. Hidayat. As of September 2016, gas revenues contributed to US$ 296 million of US$ 391 million ENRG total income.

To date, ENRG is still interested in managing Offshore North West Java (ONJW) Bloc, following the maturity of participating interest of this bloc in 2017. ENRG is still waiting for the approval from the government. In this case, Ministry of Energy and Mineral Resources is planning to divert 100% of participating interest in ONWJ to PT Pertamina.

In the next year, ENRG will be looking for funding sources to refinance as much as US$ 60 million-US$ 100 million debts.

Analyst at Indosurya Securities William Surya Wijaya estimates that ENRG will remain growing in 2017 due to the better oil price. Despite the gas price is cheaper than oil price, the ENRG strategy to boost gas revenues is appropriate. William still recommends ‘hold’ for ENRG shares. (Muhammad Farid/Translator)

Reporter: Narita Indrastiti
Editor: Barratut Taqiyyah
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