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il and gas company PT Energi Mega Persada is expecting to see a better balance sheet in its financial report in the third quarter of the year after paying off part of its debts on Tuesday.

Energi Mega, whose shares are traded under the code ENRG, paid a US$200 million loan facility arranged by Credit Suisse set to mature in September.

The money used for the debt payment was part of the $313 million the company recently raised from selling a 10 percent stake in Masela PSC to INPEX Masela Ltd and Shell Upstream Overseas Services (I) Limited.

The loan facility from Credit Suisse has put pressure on ENRG'€™s finances, as the company has to pay a 12 percent interest rate for the loan.

With the payment, the company said it would save $25 million in interest costs per year.

'€œThe reduction can only be seen as starting from our financial report in the third quarter, as the payment has just been made on July 2 [Tuesday],'€ ENRG chief of investor relations Herwin Hidayat said on Tuesday.

The company has not released its financial statement of the first quarter of the year as it remains under an audit.

ENRG'€™s full year 2012 report shows its assets were worth $2.07 billion, with liabilities of $1.38 billion and equity of $690 million.

After Tuesday'€™s debt payment, the company is also planning to reduce its debt further this year by refinancing loans amounting to $228 million it obtained in 2011 to finance the acquisition of CNOOC ONWJ Ltd.

The company holds a 36.72 percent participating interest in Offshore North West Java (ONWJ) PSC, which produces oil and natural gas in West Java.

'€œWe will seek loans from other entities to fully pay the loans. We don'€™t need to be in hurry because the maturity is still in 2014. However, we will refinance it to get a lower interest rate,'€ Herwin said.

For the loans to support its acquisition of ONWJ, ENRG has to pay 17 percent in interest rate in the first year and 20 percent afterward.

ENRG claimed that its production reached 48,500 barrels of oil equivalent per day (boepd) during the January to March period of the year.

It said production per day had been rising since then and had touched 55,040 boepd as of June 27.

Herwin said ENRG targeted to report a production of over 55,000 boepd by year end, increasing significantly from last year'€™s 38,000 boepd.

The company would use $113 million in remaining funds from the selling of the Masela block in Maluku to support the production increase of its three blocks, which are Kangean PSC, ONWJ and Bentu PSC.

'€œWe will disburse the funds equally to the three blocks,'€ Herwin said.

The 18.73 percent-owned ONWJ is expected to help the company meet its full-year target. ONWJ recorded 7,100 boepd in oil production in the first quarter of the year compared to 6,200 boepd during the entirety of 2012.

Meanwhile, the block'€™s gas output reached 39.7 million cubic feet per day (mmcfd) in the first quarter of 2013 from 37.2 mmcfd in 2012.

The company has said that it is planning to increase Bentu PSC gas output to 32 mmcfd by the end of the first semester, from previously 24 mmcfd.

ENRG currently holds a stake in 11 oil, gas and coal bed methane assets nationwide.

Shares in ENRG were closed at Rp 117 apiece on Tuesday, declining by 1.68 percent compared to a day earlier.