Sarulla Geothermal (Credit: PT Medco Energi Indonesia).

Jakarta (TheInsiderStories) – Indonesian oil and gas producer, PT Medco Energi Internasional Tbk (IDX: MEDC) officially announced the successful completion of British ‘Ophir Energy Plc acquisition of all recommended cash offers valued at £408.4 million (US$310.38 million), said an official statement on Wednesday (05/22).

Medco Energy President Director Hilmi Panigoro said the finalization of the Ophir acquisition process would increase the Company’s pro forma production by 201 percent by 110 MBOEPD, and the combined 2P reserves and 2C resources rose by 86 percent to 1,439 MMBOE.

“We are pleased to have succeeded in completing Ophir’s acquisition, which makes Medco Energi the leading oil and gas company in Southeast Asia. This acquisition reinforces the company’s strategy to selectively expand Medco Energi’s presence and we believe this will create value for all our stakeholders,” he said.

Furthermore, according to Panigoro, Medco Energy‘s pro-forma capital expenditure will reach $400 million or below this year.

“The net debt target to EBITDA is still 3.0 times or lower at mid-cycle prices,” he added.

In addition, cash per unit for Medco Energi’s oil and gas will also be maintained below $10 per BOE this year.

PT Medco Power Indonesia will also generate power sales of 2,850 gigawatts per hour (GWh), he said.

On March 26, British energy producer, Ophir Energy finally agreed on Medco Energi offers, after months of negotiations. The acquisition value agreed is 57.5 pence for each share, higher than what it was previously proposed.

The negotiation between Ophir and Medco Energi actually has been quite a tug. UK’ Ophir several times rejected the energy producer’ offer which proposed for a lower value, but today the British energy producer approved the acquisition process officially.

Ophir itself has some assets in Indonesia, Thailand, Myanmar, Malaysia, and else.

Previously, Medco Energi was issued global bonds with total amount $650 million with coupon rate 7.38 percent. The funds use to finance the acquisition of Ophir Energy worth of $535.2 million and pay the company’ debt due in 2026.

For the ability to acquire Ophir Energy, several international rating agencies increased their positive ratings on Medco Energi’ debt. Fitch Ratings upgraded the rating from B positive outlook to B + and B2 from Moody’s Services Investor.

Similarly, rating agency S&P Global Ratings revised the outlook for MedcoEnergy‘ rating from stable to positive. The rating agency believes that Medco’s cash flows and operating profile are likely to consolidate at a stronger level after Ophir’s acquisition and integration.