The company said the efficiency moves undertaken by the company in the year helped prevent the net profit to fall even further. The company managed to cut financial charges to US$71 million in 2014 compared to US$77 million in previous year.
In the period, the company managed to keep the natural decline of ageing oil wells at level of 7 percent, compared to 20-25 percent of average decline of old fields in the world.
In 2014, Medco produces oil at the average of 56,000 barrels of oil equivalent per day (boepd) from 62,000 boepd in 2013. The decline was partly due to the handover of Sembakung Block to PT Pertamina in December 2013.
Medco’s realized oil sales in 2014 was at US$97.83 per barrel or 9.6 percent lower than in 2013.
Medco managed to compensate the decline by higher gas sales after the company following the completion of the renegotiation of gas sales price. The average gas sales price in 2014 increased to US$5.60 per MMBTU, or up 9.2 percent from 2013. This added additional revenues of US$40 million.
The total oil and gas sales in 2014 reached US$701 million, down 15.2 percent from previous year of US$827 million. The oil and gas oil exploration and production segment contributed 93.4 percent to total revenues of US$750 million.
Its gross profit and operating profit were at US$271 million and US$161 million respectively. Earnings before interest, tax, depreciation and amortization (EBITDA) reached US$259 million, down from US$351 million in 2013.
Cost of goods sold, general and administration costs reached US$110 million, down 5.8 percent compared to 2013 at US$117 million. The headquarter office costs were also reduced by 25 percent from previous year.
Followings are the highlight activities of Medco Energi in 2014:
- Acquiring 4 exploration blocks in PNG, 8 blocks in Tunisia and acquiring Block 56 in Oman. The eight blocks in Tunisia added production and 2P oil and gas reserves of the Company by 2,800 boepd and 11 million barrels of oil equivalent (MMBOE) respectively. The Tunisian blocks are expected to contribute 16,000 boepd in 2019.
- The Senoro field is scheduled to deliver natural gas to the Donggi Senoro LNG (DSLNG) project in June 2015, with the maiden delivery of gas set for October 2015. The two projects are expected to contribute significant revenues to the company in 2015.
- The development of Block A in Aceh. The company and PT Pertamina has signed gas sales purchase agreement (PJBG) in January 2015 with gas sales price was set at US$9.45 per million standard cubic feet per day (MMBTU). Medco is currently preparing the final investment decision (FID) in the second quarter this year, with the first delivery of gas of 68 billion british thermal unit (BBTU) per day is set for end 2017.
- In 2014, PT Medc Power Indonesia secured loan of US$1.2 billion from JBIC, ADB and other commercial banks to develop the Sarulla geothermal power plant with capacity of 3×110 MW in North Sumatera. The Unit-1 of the power plant is expected to be completed in 2016, Unit 2 and 3 are expected to be completed in 2017 and 2018 respectively. (*)