J

akarta-listed PT Medco Energi Internasional announced on Monday that it had sealed an agreement on the acquisition of a number of assets in Tunisia.

Medco, through its subsidiary, Medco Tunisia Petroleum Limited, has signed an acquisition deal for a 100 percent stake in Storm Ventures International (Barbados) Ltd. (SVI) from Storm Ventures International (BVI) Ltd., a subsidiary of Toronto-listed Chinook Energy Inc.

The US$114.03 million acquisition now makes Medco the shareholder of a company owning eight participation interests of oil and gas blocks in Tunisia.

SVI owns four exploration blocks, two development blocks and two producing blocks with working contracts of either 30 or 50 years.

Of the eight blocks, five '€” Adam, Sud Remada, Bir Ben Tartar, Jenein and Borj El Khadra '€” are onshore and are located at the Ghadames Basin, which is the same basin as the company'€™s working area in Libya Area 47.

Meanwhile, three other blocks, namely Cosmos, Hammamet and Yasmin, are located offshore in the northeast coast of Tunisia.

Medco Energi Internasional president director Lukman Mahfoedz said the acquisition marked his company'€™s comeback to Tunisia.

In 2011, Medco decided to divest its stake in the Anaguid area in Tunisia.

The current acquisition is now pending approval from the Tunis government and partners of the blocks.

From the new blocks, Medco is expecting to see additional reserves of 12.3 million barrels of oil equivalent (mmboe) and the production of 2,800 barrels of oil equivalent per day (boepd).

Medco corporate secretary Imron Gazali said his company would receive additional production for a full year despite the fact that the acquisition process was not yet completed due to pending approval.

'€œThe effective date of ownership is Jan. 1, 2014. This is retroactive,'€ Imron said on Monday.

Medco'€™s production reached 62,000 boepd last year.

The company will likely hit around 64,800 boepd by year-end, given the company'€™s aim to maintain last year'€™s production and additional output from Tunisia.

The company says the Tunis blocks are promising and it is expecting that development works will be able to make total production reach 16,000 boepd, particularly driven by further drilling at Bir Ben Tartar.

Also, development work at Cosmos and Yasmin is expected to lift reserves to 12.6 mmboe when they are completed by 2018.

'€œWe are estimating that the capital expenditure needed [for the development work] is around $300 million,'€ Lukman said.

'€œThe blocks [are estimated to] give an additional EBITDA [earning before interest, tax, depreciation and amortization] of around $40 million to $45 million this year and 2015,'€ he added.

Medco reported $3.6 million in net profit during the first three months of the year, rising from $1.8 million during the same period last year.

The company reported a lower revenue by 8 percent to $202 million between January and March the year, compared to $220 million in the same period last year.

But the revenue drop, mainly due to lower oil production and prices, was compensated for by lower production costs.

According to its financial report, Medco'€™s production costs were 12 percent lower to $116 million in the first quarter of the year compared to the same period last year, while its operational costs were lower by 14 percent to $25 million in the first quarter year-on-year.