Medco Energi: Key takeaways from analyst meeting (MEDC, Rp2,525, Neutral, TP: Rp3,200) - Mandiri

􀂄 We attended Medco Energi (MEDC) analyst meeting and highlighted several points 􀂄 Management changes occur with new board positions:
(i) Lukman Mahfoedz, CEO, previously Project Director (now dispensed)
(ii) Syamsurizal Munaf, CFO, previously a Technical Director in Medco E&P Indonesia, has been in MEDC group level since 1997
(iii) Dasril Dahya, Human Capital previously Producing Asset Director in Medco E&P Indonesia, with Geologist background, has served around 30 years in MEDC
(iv) Frila Berlini Yaman, COO E&P, has a long experience in global oil companies
(v) Akira Mizuta, Chief Planning Officer, a representative from Mitsubishi.
􀂄 We noted MEDC now has two COO, with different focus (E&P and non-E&P business) and more boards at MEDC level (previously positioned in Medco E&P Indonesia group)
􀂄 As expected, revenue growth was mainly driven by strong oil price ASP at US$113.2/bbl (+40.7%yoy), mitigating oil lifting decline to 29.3mbopd (-4.5%yoy). On the other hand, gas production grew at high single digit to 159.6mmscfd (+9.7%yoy) mainly came from Lematang block.
􀂄 In terms of reserves, MEDC is still faced a declining trend with 2P reserves at 243mmboe (vs 3M11: 248mmboe). However, there is a potential reserve may come from Lika well in SCS block as MEDC conducted exploration efforts recently.
􀂄 We are reviewing our forecast on MEDC, currently traded at EV/2P US$5.2/boe