- Medco Energi (MEDC, along five other E&P players, recorded oil production of 23,863 bopd which has overlapped its 2011 production target of 23,000 bopd, according to BP Migas. BP Migas also stated that 31 contractors (e.g. ConocoPhilips, Kodeco, and Pertamina) still below target. We have not got any detail on each MEDC’s block production; however, MEDC’s 2011 oil production forecast is less optimistic than ours of about 32,000 bopd. We believe that MEDC is still able to lift more oil this year relying on its Rimau block.
- We think this could be a positive update for MEDC given declining national oil production, and only 5 of 31 contractors that were able to achieve this amid disturbed oil production nationwide.
- We still maintain Neutral recommendation on MEDC, currently traded at EV/2P US$5.5/boe, PER 11F 18.4x, and
EV/EBITDA 11F 4.4x
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