Bakrie Group-affiliated PT Energi Mega Persada

Energi Mega in talks to divest two gas blocks in Mozambique to refinance debt

Bakrie Group-affiliated PT Energi Mega Persada Tbk (ENRG) is looking to divest part of its rights in Bentu PSC in Riau and Buzi EPCC gas blocks in Mozambique.

The company said that several African and European investors have put forward their bids for the blocks.

“There are now three investors that have been shortlisted from 10. We are in the process of selecting the best offer”, said the Director of Energi Mega, Imam Agustino, in Jakarta.

Energi Mega will use the sale proceeds to refinance some of its most expensive debts, he added. The company hopes to conclude the deal before year-end.

The Jakarta-based firm acquired 75% stake in Buzi block in October 2013, while the remaining 25% is still owned by ENH. The gas block has 2P reserves of 283 billion cubic feet and prospective resource of 13.4 trillion cubic feet (on 100% basis).

Energi Mega has been struggling to reduce cost and produce greater efficiency to profit amid sluggish oil and gas prices. In 2015, revenues fell to US$624.1-million from US$811.4-million in the previous year. Net loss jumped from US$54.3-million in 2014 to US$218.5-million.

Agustino said his firm is aiming to surpass last year’s EBITDA of US$339-million in 2016, but was reluctant to say if it expects a net profit.

“We will be making cuts of inefficient areas, workers and equipment this year while maintaining our output target”, he said.

Source: Deal Street Asia

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