MEDCO ENERGI INITIATION │ BUY WITH 74% UPSIDE

COMPANY FOCUS │ 18 September 2022
Medco Energi Internasional BUY (Initiation)

Target Price 1,700 (+74% ups.)
The Real O.G. Previous TP
Current Price
-
975
We initiate our coverage of Medco Energi Internasional (MEDC) with a TP of
Rp1.7k, +74% ups. We like MEDC because: 1) Tight supply-demand balance will
keep the oil price high; 2) Corridor block acquisition; 3) is an alternative way to
get copper exposure at attractive prices; and 4) appealing valuation, trades at
4.2x 2023F P/E. But if we exclude AMI, MEDC is only trading at 2.41x 2023F P/E.
Structural and fundamental issues in the O&G industry will keep the prices high
We believe O&G prices will remain high with 2022-24F brent crude oil prices of
$102/96.9/85 per bbl with an LT price of $71.4/bbl driven by 1) lack of capex spending on
the upstream industry; 2) high gas demand from EU during the coming winter. Our
calculation shows EU's gas storage is not enough to fulfill the EU's total demand; 3)
potential restocking of the US Strategic Petroleum Reserve (SPR) in the future; and 4) the
recovery of China's oil imports once they decide to ease their lockdown policy. We believe
that this is a fundamental and structural issue that will take time to resolve immediately.
Hence, we think MEDC will benefit from this elevated price as 22% of its product is oil
(spot), while c20% of its gas is indexed. We expect MEDC to generate an avg 2022-24F
EBITDA of $1.5bn (+173% vs. 5yr avg), and an avg core profit of $360mn (exc. Amman it
will be $212mn). We did a stress test, if oil prices fell to $65/bbl by next year, MEDC would
still be able to book core profit exc. Amman at $60mn, something that never happened
before. MEDC also plans to give value in the form of dividends to shareholders. Hasbie
Hasbie@trimegah.com
Corridor Block, the cash cow gas block with cheap cash cost 021 – 2924 6322
MEDC in Mar22 acquired Grissik (CPGL), a Corridor Block operator with a working interest
of 54% (will be 46% on Dec23-Dec43), for $1.35bn, a total 2P reserve of 125mmboe, a Willinoy Sitorus
production contribution of c61mboepd, and a low cash cost of $4-5/boe (50-60% lower to willinoy.sitorus@trimegah.com
MEDC). Historically, MEDC will spend capex on the new acquiring block and then increase 021 – 2924 9099
its production and reserve life, which happened on Block B (up by +141%) and Ophir
Blocks (up by +22%). Corridor Block could generate an avg EBITDA of $661mn in 2022F-
26F, with a margin of c80-90% (compared to MEDC's 50%-60%). Currently, MEDC and its Stock Data & Indices
customers are preparing to renew the contract extension as it will expire by Dec 23, and Bloomberg Code MEDC.IJ
we expect this should be an important potential catalyst. Our sensitivity shows that every JCI Group IDXENER
50mmboe additional reserve will increase MEDC’s target price by c13.5%.
MSCI Indonesia No
The Amman copper and gold project is paying off and sustainable in the long run JII No
MEDC holds a stake of 23.15% in Amman (AMI), one of the world's largest copper and gold LQ45 Yes
projects. Currently, AMI is mining a high-grade ore in phase 7, which may continue Kompas 100 Yes
through 2023F-24F before transitioning to phase 8. This year, we anticipate AMI's net
profit contribution to peak at $201mn (32% NPM) before declining owing to lower copper
prices. Despite shifting to phase 8, we do not expect an output decline as severe as in Key Data
2018-19 as management mentioned that AMI has been paralleling spending capex for Issued Shares (mn) 25,136
phase 8. Another upside potential risk would be unlocked when AMI decides to conduct an
Free Float (est) (%) 25.6%
IPO, which, according to the AMI bank loan arrangement, is required if AMI wants to pay
dividends. MEDC also has the right to get an additional 2% of AMI shares by end of 22. Mkt. Cap (IDRbn) 24,507.8
Mkt. Cap (USDmn) 1,642.9
Valuation: Attractive risk & reward, ESG, and energy plays (+74% ups.) ADTV 6mo (IDRbn) 72.9
We use a SOTP-based price target of IDR1.7k (+74% ups.). We use DCF for O&G assuming 52 Wk-range 1,020 / 458
a WACC of 9.5% (10% ESG disc; implies 2023F P/E 4.98x, a -30% disc.) and Amman with
a target P/E of 11.1x (30% disc. to peers). MEDC is only trading at 4.2x 2023F P/E. But if Performance (%)
we exclude Amman, MEDC is only trading at 2.41x 2023F P/E. We expect the re-rating to
YTD 1m 3m 12m
be visible once MEDC starts to deliver consistent profit on its O&G and stable production on
AMI. In addition, MEDC has MSCI ESG rating of BB and net zero emissions target scope Absolute 109.2 54.8 54.8 95.0
1&2 by 2050. Risks: global economic recession, lower O&G and metal prices. Relative
107.2 55.1 54.0 80.6
to JCI
Company Data
Year end Dec 2020 2021 2022F 2023F 2024F
9/12/2022
Revenue (USD mn) 1,100 1,323 2,358 2,426 2,098
Avg. 5 Day MA Trading volume
(RHS)
EBITDA (USD mn) 491 713 1,586 1,670 1,405

Net Profit (USD mn) -193 47 432 390 262
Core Profit (USD mn) -172 33 428 390 262
Core EPS (IDR/sh) -100 19 249 233 156
Core EPS Growth (%) na na 1,232.9 -6.5 -32.9
Core P/E (x) -9.8 52.1 3.9 4.2 6.2
EV/ EBITDA 9.3 6.4 3.1 2.6 2.8
P/ BV (x) 1.7 1.6 1.2 0.9 0.8
Div. yield (%) 0.0 0.0 1.5 3.1 3.3
PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 1

Income statements Company Background
Year end Dec (USD mn) 2020 2021 2022F 2023F 2024F MEDC is a holding energy
Revenue 1,100 1,323 2,358 2,426 2,098 company that owns oil and gas
Gross profit 314 566 1,174 1,226 1,021
businesses and power plants.
Operating profit 158 403 973 1,026 829
EBITDA 491 713 1,586 1,670 1,405 Company also has several JVs
Interest expense -282 -225 -250 -248 -233 which indulge in mining
Interest income 19 9 19 13 25 business (Amman), real estate,
Income from JV 30 66 201 146 97 LNG terminal, and geothermal.
Other income (expense) 122 435 981 1,026 829
Pre-tax profit -111 286 951 937 718
Income tax expense -72 -232 -497 -524 -434 Major Shareholders
Minority interest -12 -16 -22 -22 -22
Net profit -193 47 432 390 262
Core profit -172 33 428 390 262 PT Medco Daya
51.50%
Div. payout ratio (%) 0.0% 0.0% 53.2% 11.7% 13.7% Abadi Lestari
Diamond Bridge PTE 21.46%

Balance Sheet
Year end Dec (USD mn) 2020 2021 2022F 2023F 2024F
Public 26.60%
Cash 297 481 367 715 1,013
Trade receivables 162 221 517 532 385
LT Investment 832 1,075 1,402 1,548 1,646 Treasury 0.44%
O&G properties 1,858 1,680 2,154 1,823 1,551
Other assets 2,733 2,226 1,938 1,926 1,911
Total assets 5,883 5,684 6,378 6,544 6,506
Trade Payables 175 189 326 330 260 SWOT Analysis
Short term debt 419 411 588 554 520
Long term debt 2,586 2,801 2,862 2,697 2,531 Strength Weakness
Others 1,508 1,054 974 974 974 Strong strategic Highly
Total liabilities 4,687 4,455 4,750 4,554 4,284 M&A, leveraged
Minority interest 188 157 179 201 223 Cheap lifting
Shareholder's Equity 1,007 1,073 1,449 1,789 1,998
cost, Strong cash
Net debt / (Cash) 2,707 2,731 3,083 2,535 2,037
flow
Cash Flow
Opportunity Threat
Year end Dec (USD mn) 2020 2021 2022F 2023F 2024F
Corridor block Oil and metals
Net profit -193 47 432 390 262 contract price volatility,
Non cash profit from JV -30 -66 -201 -146 -97 extension, Lower than
Depreciation 333 310 613 644 576 Amman IPO expected new
Change in working capital 84 -47 -201 -13 89 gas pricing for
plan, Senoro
Others 264 219 209 0 0
block Corridor block
Operating cash flow 458 463 853 877 830
expansion
Capital expenditure -297 -188 -1,084 -300 -300
Others 4 271 -88 0 0
Investing cash flow -293 83 -1,172 -300 -300
Net change in debt -190 207 239 -200 -200
Net change in equity 12 0 0 0 0
Dividends 0 0 -25 -51 -53
Others -140 -563 -8 22 22
Financing cash flow -318 -357 206 -228 -231
Net cash flow -152 189 -114 348 298
Cash at beginning 456 297 481 367 715
Cash at end 297 481 367 715 1,013
Free cash flow 161 275 -231 576 529
Ratio Analysis
Year end Dec 2020 2021 2022F 2023F 2024F
Profitability (%)
Gross margin 28.6 42.8 49.8 50.6 48.6
Operating margin 14.3 30.5 41.3 42.3 39.5
EBITDA margin 44.6 53.9 67.3 68.9 66.9
Net margin -17.5 3.5 18.3 16.1 12.5
ROAA -3.24 0.81 7.16 6.04 4.02
ROAE -17.57 4.51 34.22 24.11 13.84
ROIC 2.06 4.14 10.23 9.95 7.73
Stability
Current ratio 1.4 1.7 1.3 1.7 2.0
Debt to equity 3.0 3.0 2.4 1.8 1.5
Net debt to equity 2.7 2.5 2.1 1.4 1.0
Interest coverage ratio 0.6 1.8 3.9 4.1 3.6
Efficiency (in days)
Receivables 54 61 80 80 67
Inventory 46 49 44 44 45
Payables 81 91 100 100 88

Table of contents
Investment thesis ……………………………………………………………………………………………..……………………………………………. 4
Industry overview…………………………………………………………………………………………………………………………………………… 5
Fossil fuels remain to be essential and dominate global energy mix…………………..………........................……………. 6
Increasing ESG trends in the past have resulted in decreased capex spending, causing limited incremental
………capacity in the future……………………………………………………………………………………..………………………….……………. 6
EU will likely experience a gas shortage in this year’s…………………………………………………………............……………. 8
US SPR crude oil release to pressure oil price, but we don’t think it will be forever…………………..........…………… 10
The reopening of China's economy will be another driver of oil consumption …………………..................……………. 11
The oil price curve is forming a backwardation………………………………………………………….....................……………. 12
Macroeconomic perspective. What indicators should we aware of?……………………………………..............…………… 12
Oil and gas prices outlook………………………………………………………………………………………………………………….…………… 13
Company background………………………………………………………………………………………………………………………..…………… 15
MEDC’s O&G business: The current and future focus…………………..………..............................................…………… 16
M&A on the O&G business; MEDC’s main strength……………………………………………..………………………….…………… 17
Acquiring one of the biggest and profitable gas block in Indonesia, Corridor Block……………….......…………………. 18
MEDC’s mining business: Waiting to be unlocked…………………..............................................................…………… 23
MEDC is not acquiring non-O&G assets again since 2020…………………..................................................…………… 26
Sensitivity analysis on target price, EBITDA, and net profit…………………………………………………………………...…………… 28
Financial Outlook……………………………………………………………………………………………………………………….........…………… 29
Profit & Loss…………………..………..........................................................................................................……………. 29
Balance Sheet……………………………………………..…………………………………………………………………………..……………. 30
Cash flow………………............................................................................................................................……………. 31
MEDC ESG strategy – Road to Net Zero……………………………………………………………………………………………….……………. 32
Valuation………………………………………………………………………………………………………………………………………………………. 34
Ownerships positioning……………………………………………………………………………………………………………………..…………… 37
Appendix………………………………………………………………………………………………………………………………………….…………... 38
Power business…………………..……….......................……………………………………………………………………………………. 38
Production Sharing Contracts (PSCs)……………………………………………..………………………….……………….……………. 40
MEDC reserves and production contribution on all O&G assets……………..……………………………………….……………. 42
Global O&G production and consumption by region……………………………………………………………………………………. 44
Glossary………………………………………………………………………………………………………………………………………………… 46
Management Background………………....................................................................................................…………….. 48

Investment thesis
We believe oil and gas prices will remain high with 2022-24F brent crude oil prices of $102/96.9/85 per bbl with an LT price
of $71.4/bbl on the back of: 1) lack of capex spending on the upstream industry. This limits the incremental output before
2025F. The big LNG project will only start to kick in 2025F while the major expansion on the oil project (i.e. Saudi Aramco)
will start to run by 2025F. We also see Bloomberg’s consensus expectation of 75 O&G companies’ capex spending will only
grow by 11% CAGR in 2022-24F at avg of $334mn, which is still below by -27% compared to the sector’s peak spending in
2012-14F at avg of $457mn even though we have included Aramco in the future projections (Saudi Aramco data is still only
available since 2016). Note that O&G energy contribution to the energy mix in 2021 was still big at 55.4%, only fell by -
1.1% compared to its capex cycle peak in 2013; 2) high gas demand during winter because looking at the EU gas storage,
we believe it isn’t enough to cover the EU’s total demand. Our scenario shows that even if EU has filled its gas storage by
>80%, assuming no Russia import at all while the demand is flat, they could experience a shortage of electricity by 33 days,
in which we don’t think the EU govt will let it happen, hence they will buy as much as O&G production as they can. In
addition, Norway, the largest exporter of gas in EU, would lower its gas export once winter comes because winter will freeze
its river which usually runs for its hydropower (Norway’s largest energy sources). They need the gas to fulfill their domestic
demand; 3) potential restocking of the US’ Strategic Petroleum Reserve (SPR) in the future. We also expect the inventory
destocking will continue post-Oct given US also has interest for lowering their spending on oil imports. Yet, we think US will
maintain a high gas price due to its position as the gas exporter. However, note that SPR at the end of the day will be very
tight; and 4) the recovery of China's oil imports once they decide to ease its lockdown policy. Note that in Aug, China’s oil
import fell by -1mmbopd YoY, which we believe was mostly driven by aviation sector still being closed. We might get an
update on the reopening schedule once China’s election finish by the end of Oct22. We believe this is a fundamental and
structural issue that can’t be solved immediately.
Hence, we think MEDC will benefit from this high oil prices as 22% of its product is oil (spot), while c20% of its gas is
indexed to oil prices. We expect MEDC to produce oil and gas 2022-24F at an avg rate of 156.4MBOEPD (+67% vs last 5y
avg), 2022-24F avg cash cost of $7.48/boe (-24% vs last 5yr), resulting in a 2022-24F avg EBITDA of $1.5bn (+173% vs
last 5yr avg), and a 2022-24F avg core profit of $360mn (exc. Amman it will be $212mn). If oil price fell to $65/bbl next
year, while existing block’s cash cost fell by -7% to $9.1/boe, MEDC would still be able to book a core profit exc. Amman of
$60mn, something that never happened before. Our sensitivity suggests that every +/- 1% in oil price, MEDC 2023F
EBITDA/net profit/target price will change by 0.7%/1.5%/0.4%. While every +/- 1% in cash cost, will change by
0.3%/0.5%/0.2%.
MEDC recently acquired Grissik (CPGL), a Corridor Block operator with a working interest of 54% (until Dec23; will be 46%
on Dec23-Dec43) per Mar22, for $1.355bn, a total 2P reserve of 125mmboe, a production contribution of c61mboepd, and a
low cash cost of $4-5/boe (50-60% lower to MEDC). Historically, MEDC will spend capex on the new acquiring block and then
increase its production and reserve life, which happened on Block B (up by +141% since 2016) and Ophir Blocks (up by
+22% since 2019). Corridor Block could generate an avg EBITDA of $661mn in 2022F-26F, with a margin of c80-90%
(compared to MEDC's 50%-60%). Currently, MEDC and its customers are preparing to renew the contract extension as it will
expire by Dec 23, and we expect this should be an important potential catalyst. Our sensitivity shows that every 50mmboe
additional reserve will increase MEDC’s target price by c13.5%.
MEDC holds a stake of 23.15% in Amman (AMI), one of the world's largest copper and gold projects. Currently, AMI is
mining a high-grade ore in phase 7, which may continue through 2023F-24F before transitioning to phase 8. This year, we
expect AMI's net profit contribution to peak at $201mn (32% NPM) before declining owing to lower copper prices. Despite
shifting to phase 8, we do not anticipate an output decline as severe as in 2018-19 as mgmt mentioned that AMI has been
paralleling spending capex for phase 8. Another upside potential risk would be unlocked if AMI decides to conduct an IPO,
which, according to the AMI bank loan arrangement, is required if AMI wants to pay dividends. MEDC also has the right to
acquire an additional 2% of AMI shares by end of 22.
We use a SOTP-based price target of IDR1.7k (+74% ups.). We use DCF for O&G assumes a WACC of 9.5% (10% ESG disc;
implies 2023F P/E 4.98x, a -30% disc.), Amman with a target P/E of 11.11x (30% disc. to peers), power plant with 8.5x
EV/EBITDA (35% disc.), and others JV with 0.5x PBV (50% disc. to MEDC P/BV). MEDC is only trading at 4.2x 2023F P/E.
But if we exclude AMI, MEDC is only trading at 2.41x 2023F P/E. We expect the re-rating would be visible once MEDC starts
to deliver consistent profit on its O&G and stable production on AMI.
MEDC’s MSCI ESG rating is BB, while its sustainalytics score is at 44th. MEDC has a net zero emission scope 1 & 2 target by
2050.
Key risks: Stronger than expected USD Index (DXY) & the fed fund rate, Iran nuclear deal, weaker than expected global GDP
growth, O&G rationing consumptions, and lower than expected O&G and metal prices.

Industry Overview
A tight O&G supply demand; can’t solved within a night. We are seeing a different case compared to 70s
Why are we currently experiencing scarcity in the energy sector? The most common response is that capital expenditures in
the fossil fuel industry have been declining while the consumption trend has remained strong. But what is the actual figure?
We would want to provide approximate figures based on the listed firms that produce more than 90 percent of the world's oil
and gas.
Fossil fuels remain to be essential and dominate global energy mix

In 2021, oil and gas continued to dominate the world's energy use, accounting for 55.4% of the overall energy consumption.
The proportions will grow by 27% to 82.3% if we include coal in our category. This illustrates why fossil fuel is still a crucial
and relevant component of our daily activities. When fossil fuel businesses were still investing heavily in capex 8 years ago,
O&G accounted for 56.5% and if we add coal, it will be 86.5%. This demonstrates that the transition from fossil fuels to
renewable energy has been exceedingly modest during the 8y. Renewable energy consumption’s CAGR is only 0.55% for the
last 8y. In our opinion, the cost per kilowatt-hour and its reliability are the most crucial elements in the slow adoption of
renewable energy.
Figure 1. Global energy mix in 2013, 2021, and its change in %
Source: BP, Trimegah Research
Figure 2. Fossil fuel-based power plants are highly reliable and reasonably cheap
Source: EIA annual energy outlook 2022

Increasing ESG trends in the past have resulted in decreased capex spending, causing limited
incremental capacity in the future
Based on Bloomberg's GISC sectors, we tracked 137 O&G upstream and integrated firms with a market capitalization of at
least $1bn. The entire market capitalization is $5.4trn, with the top 10 accounting for 70% of the total. This industry
contributed c95% of the world's yearly oil and gas output or c85mmboepd. Prior to 2013, spending on O&G capex was an
uptrend. During that high oil prices period, worldwide capex spending was $605bn (excluding Aramco) and production was
64mmboepd.
However, due to the rising ESG awareness and trends. Many O&G companies face bank loan difficulties and complicated
licensing for new projects. As a result, the capex spending trends have been dropping, with a CAGR growth rate of -7.7%,
reaching only $317.7bn in 2021. The consequence of reduced capital expenditures is not evident immediately. Because, in
the O&G business, once a company has succeeded to explore a new field, it might have a lifespan of 15–30 years on average
(onshore field). Yet, companies must continue to conduct extensive drilling and spending capex just to sustain production
over time.
Consumption, on the other hand, continues to increase. The consumption CAGR between 2013 and 2021 is 0.6%, a
deviation of 8.3% from the negative CAGR on the capex. Currently, we are experiencing a tight O&G production. It is also
worth remembering that the long duration of the exploration phase to production would be c9 years. Saudi Aramco, the
world's largest oil and gas firm backed by a monarchy, is still required c4 years to create a sizeable expanding capacity.
Figure 3. O&G sector market cap contributions Figure 4. O&G sector market cap contributions (%)
Source: Bloobmerg, Trimegah Research Source: Bloomberg, Trimegah Research
Figure 5. O&G global production per companies Figure 6. Global capex and production trends exc. Aramco
Source: Bloomberg, BP, Trimegah Research Source: Bloomberg, BP, Trimegah Research
What about future production initiatives?

We sort 75 companies based on historical and projected capex and production data. Bloomberg consensus forecasts that
those companies' capex spending would rise by 11% CAGR 2021-24F from $253bn in 2021 (72% of global capex
contributions include Russian companies) to $346bn. This will result in a 3.7% increase in production from 60mmboepd to
67mmboepd CAGR 2021-24F. The stats appear to be impressive, but the incremental is still lower than Russia's production
rate of c10mmboepd if the world wants to cut Russia out of the supply chain, the increase is still insufficient. It's also worth

noting that US LNG export capacity is only just getting started this year. The extra capacity will not be operational until at
least 2025F. This protracted wait will exacerbate the already tight supply-demand, especially once winter arrives in
November.
Figure 7. O&G 5 stages life cycle. The process from exploration to production takes a lot of time
Source: OEA Consulting, Trimegah research
Figure 8. Despite the inclusion of Aramco data (Aramco data is Figure 9. Companies can’t aggressively increase production
only available since 2016), the O&G capex trend until 2024F is given the length of time to spend on preparing the new block. In
still lower compared to previous cycle trends. 2021-24F, the BBG consensus predicts a CAGR of 3.7%.
Source: Bloomberg, BP, Trimegah Research Source: Bloomberg, Trimegah Research
Figure 10. The US LNG project will only start to deliver the Figure 11. Currently, the S-D of O&G is very tight. The
first product in 2025F. It is still 3 years away balance per 2Q22 is still below the historical position of
0.3mmboepd at -0.05mmboepd
Source: EIA, Trimegah Research Source: OPEC+ weekly data, Trimegah Research

Figure 12. One of the main reasons is declining Russia oil Figure 13. The global rig has not recovered due to the difficulty
production rate which fell by -0.65mmboepd in 2Q22 of financing and the possibility of investing at a peak cycle
15.0 35.0%
14.5 30.0%
14.0 25.0%
13.5 20.0%
13.0
15.0%
12.5
10.0%
12.0
11.5 5.0%
11.0 0.0%
10.5 -5.0%
10.6
10.0 -10.0%
3Q15
1Q14
3Q14
1Q15
1Q16
3Q16
1Q17
3Q17
1Q18
3Q18
1Q19
3Q19
1Q20
3Q20
1Q21
3Q21
1Q22
Disc. to historical avg (RHS) Russia production

Historical production
Source: OPEC+ weekly data, Trimegah Research Source: Bloomberg, Trimegah Research
EU will likely experience a gas shortage in this year’s winter

The region’s long-standing dependency on Russian gas is exacerbated when gas supply was cut off
We expect EU will experience an increase in gas demand in the winter to fulfill the increasing needs for heating appliances.
Historically, the EU has depended on Russian gas imports to help them get through the winter. Most of Russia's gas is
supplied through the Nord Stream 1 pipeline, managed by Russia’s state-owned, Gazprom. Yet, Gazprom extended the
shutdown of the Nord Stream 1 pipeline to Germany after previously shutting it down for 3 days due to unscheduled
maintenance. The restart was supposedly scheduled for Friday (02/09), but Gazprom abruptly canceled the restart, citing an
oil leak in a turbine. Gazprom provides no timeframe for the restart of the pipeline.
Some EU countries are equipped with a gas storage facility that they utilize every year for the winter. The dark blue color in
Figure 14 shows EU countries that are equipped with a gas storage facility. The circle’s area represents gas storage capacity.
The teal color represents countries that don't currently own a gas storage facility but have an arrangement with neighboring
countries that do own a gas storage facility. The storage facilities are rather concentrated with the top 4 storage capacities
contributing to 46% of EU’s total capacity.
Figure 14. EU gas storage by country Figure 15. Summary of current EU gas storage situation
Gas in storage (TWh) %Full Storage capacity (TWh) %total EU

Germany 212.8 87% 244.8 22%
Italy 163.4 84% 193.4 17%
Netherlands 112.9 81% 139.0 12%
France 123.7 94% 131.5 12%
Austria 66.3 69% 95.5 9%
Hungary 44.6 66% 67.7 6%
Slovakia 29.1 81% 36.0 3%
Czech Republic 36.2 83% 43.8 4%
Poland 36.2 99% 36.4 3%
Spain 30.2 86% 35.3 3%
Romania 25.1 77% 32.8 3%
Others 40.3 72% 56.2 5%
Total 921 83% 1,112 100%
Source: AGSI, Trimegah Research Source: AGSI, Trimegah Research

Figure 16. EU gas storage trends; in line with historical avg Figure 17. Germany gas storage trends; slightly above avg
120
120
100 100
86.95
82.77
80 80
60
%
60
%
40
40
20
20
0
0 Jan Feb Mar Apr Mei Jun Jul Agu Sep Okt Nov Des
Jan Feb Mar Apr Mei Jun Jul Agu Sep Okt Nov Des
6yr range Average 2022

6y range 2022 Average
Source: AGSI, Trimegah Research Source: AGSI, Trimegah Research
EU members are filling up their storage capacity…

We noticed that the EU is already starting to fill up their gas storage facility, reaching c82.8% of maximum capacity as of 8
Sep22. This number is ahead of its previous target of 80% by Oct22. The current pace of filling is in-line with its 6-year
average. But, we think the lack of gas supply from Russia will lead to an energy deficit in the EU.
Figure 18. EU gas demand during winter season Figure 19. Russia’s export of natural gas (TCF) 2021
Source: AGSI, Trimegah Research Source: Russiamatters
…but we doubt it’s sufficient; here is our scenario analysis on EU gas demand during winter season...
In the last 5 winters (Nov-Mar), the EU imported ~3000TWh of gas and burned ~600TWh of gas from their storage facilities.
This translate to total implied demand needed by the EU during winter to be ~3600TWh. With a total maximum capacity of
~1000Twh, the EU gas storage capacity can only satisfy ~30% of the winter demand.
According to our analysis, if Russia continues to entirely stop its flow of gas to the EU and if there is no reduction in
consumption by the EU, assuming a maximum capacity of gas storage is reached, there will be a 797TWh of gas deficit in
the EU. This translates to an energy shortage of 33 days. We are aware that the EU will most definitely do some kind of
energy curtailment this winter. To look at how this will play out in terms of gas balances, we did a scenario analysis in figure
22 & 23. The x-axis is adjusted for the percentage of Russian gas supplied to the EU that is reduced, and the y-axis is
adjusted for the EU's consumption reduction.
We found that consumption reduction from the EU side is more effective in terms of reducing the energy deficit compared to
the continuation of Russian gas supply. Note that the European Commission proposed a voluntary target for all EU countries
to cut gas consumption by 15% from Aug22 to Mar23 compared to their average consumption over the last 5 years. The cut
will only affect industries as households are classified as protected consumers under EU law and will be shielded from the
cut.

Figure 20. Worst case scenario; Russia gas export at 100% Figure 21. 5y avg of gas consumption in EU during winter
TWh
Demand 3617
Conversion
Import 2996
Gas demand (TWh) 3617
Import from Russia -1288
Gas demand (TWh/month) 723
Import available if russia cut 100% 1708
Gas storage @ 100% 1112 Gas demand (TWh/day) 24
Balance -797
Source: AGSI, CEIC, Trimegah Research Source: AGSI, CEIC, Trimegah Research
Figure 22. Gas balance scenario in TWh Figure 23. Gas balance scenario in days
Russia import supply cut Russia import supply cut

TWh 40% 60% 80% 100% Days 40% 60% 80% 100%
EU 0% -24 -282 -540 -797 EU 0% -1 -12 -22 -33
demand -5% 157 -101 -359 -616 demand -5% 6 -4 -15 -26
reduction -10% 338 80 -178 -435 reduction -10% 14 3 -7 -18
-15% 518 261 3 -255 -15% 21 11 0 -11
Source: AGSI, CEIC, Trimegah Research Source: AGSI, CEIC, Trimegah Research
…and Norway has typically reduced energy exports throughout the winter to meet domestic demand
Currently, Norway is exporting its natural gas resources to Europe given the high demand as the EU starts to shift its imports
from Russia to other countries. Norway had 15 international connection pipelines in 2021 before connecting additional
pipelines to the UK and Germany. Norway can do this because 65% of its energy sources come from hydro power. Yet, rivers
flow rate usually decreases during winter. Hence, looking at the seasonality, there is a possibility that Norway would reduce
some of its natural gas exports in the near term.
Figure 24. Norway export energy trend since 2008 Figure 25. Natgas export will declines during winter
Source: Bloomberg, Trimegah Research Source: Bloomberg, Trimegah Research
US SPR crude oil release to pressure oil price, but we don’t think it will be last forever
The Strategic Petroleum Reserve is an oil reserve owned by the US, located in Louisiana and Texas, with a total capacity of
714mmbbls that was established in the 70s after the Saudi Arabian oil embargo. Following the oil crisis, the United States
realized that it needed its own oil reserve for energy security. The ratio of sweet and sour oil in SPR was 40% sweet (low
sulfur, <1%, pricier, less refining) and 60% sour (high sulfur, 1-2%, cheaper, more refining). In March 2022, the US issued
a regulation that would allow them to drain their SPR to satisfy crude oil demand and prevent the oil prices to spike up like
LNG or coal with a rate of 1mmbopd until end of Oct22 (the possible extension is still possible). We think this extra supply
from the US plays a role in the current oil price dynamic, given its buyers can trade it internationally. As the results, SPR
reserves fell by -23% since the implementation of this policy, to 442mmbbls. If the Biden administration wants to extend
this strategy, assuming the same rate at 1mmbopd, the current reserve will only last for c15 months. Worth to remember
that this strategy in our view will only backfire the US govt when they need to do restocking on its SPR because the solution
that is being offered is just like a temporary solution. The massive amount of oil that needs to be restocked will only keep
the S-D tight in the future, even though some new project might would start to deliver its new volume.
Figure 26. SPR inventory is falling steeply… Figure 27. … while the regular inventory is also falling
Source: EIA, Bloomberg, Trimegah Source: EIA, Bloomberg, Trimegah
The reopening of China's economy will be another driver of oil consumption

Since the implementation of the zero covid-19 policy, China has closed its border once more. China's August oil imports
declined by 1.1mmbopd as of August 22, and the aviation sector is suffering as the number of flights has dropped sharply.
Historically, China's jet fuel usage reached almost 1 million barrels per day. We predict that if China begins to reopen its
economy, which might happen this year in November or December 2022 following the 20th National Congress of the Chinese
Communist Party, gasoline consumption would rise quickly and oil imports will rebound significantly.
Figure 28. China crude oil import soften during their lockdown Figure 29. China aviation industry has yet to recover
this year
Source: China’s general administration of customs Source: Bloomberg, VariFlight
Figure 30. China’s Jet fuel yearly consumption (mbopd) Figure 31. China’s crude oil imports by source (2021)
Source: Theglobaleconomy Source: EIA

The oil price curve is forming a backwardation; implies shortage condition
We can also see from the financial market perspective that the current oil price is still running at deficit territory through its
curve. The curve has started to become backwardation since the covid19’s lockdown is getting ease and the economic
activity has started back to normal. From the open interest side, the trend is still declining. This could means the current
rising price trend is not mainly driven by traders, but because of the tight S-D balance as we have described previously.
Figure 32. Brent crude oil price curves; Backwardation Figure 33. Open interest trend
Macroeconomic perspective. What indicators should we aware of?
We compared oil price consumption growth to global GDP growth and US GDP growth for the last 30 years. We also
investigate the relationships between oil prices and the US Federal Reserve rate and the USD index (DXY) within the same
period. As a result of our findings, oil prices exhibit a negative correlation with Fed rate hikes and a stronger DXY. It does,
however, has a positive relationship with global GDP growth and US CPI YoY increase. This means that if global GDP growth
and economic data (such as the unemployment rate, new job opening, and govt relief) remain robust, we expect the
negative effects of the Fed raise and CPI will be offset by those things, as long as the global economy does not collapse.
Figure 34. Oil consumption grows by c50% of global GDP Figure 35. oil consumption vs US CPI YoY; Oil consumption
growth grows by c24% of US CPI YoY growth
8% 400%
8% 300%
6%
200%
6% 250% 24%
4%
4% 0%
200% 2%
2% -200%
150% 0%
0%
-2% -400%
100%
-2% 52% -4%
-600%
50%
-4% -6%
0% -800%
-6% -8%
-50% -1000%
-8% -10%
-10% -100% -12% -1200%
oil cons. Growth/GDP growth (RHS) Global YoY GDP growth

oil cons. Growth/CPI YoY (RHS) US CPI YoY
Global YoY oil consumption growth Average (RHS)
Global YoY oil consumption growth Average (RHS)

Figure 36. Brent crude oil prices and DXY correlation
Source: Bloomberg, Trimegah Research
Figure 37. Brent crude oil prices and Fed fund rate correlation
Brent, coal, gas, and US O&G exports and imports charts
Figure 38. Brent crude and Newcastle coal price trends. Oil price Figure 39. Japan and Europe LNG prices are in an uptrend due
increase is still below its peak price at c$140/bbl while coal price to the shortage energy inventory and supply
have increased by more than 3 folds from its previous peak
160 500
100
140 450
90
400 80
120
350 70
USD/MMBTU
100 300 60
$/ton
$/bbl
80 250 50
200 40
60
150 30
40 20
100
20 10
50
0
0 0
Apr-21
Apr-22
Nov-20
Jun-21
Nov-21
Jul-21
Jun-22
Jul-22
Feb-21
Mar-21
Dec-21
Feb-22
Mar-22
Sep-20
Oct-20
Dec-20
Jan-21
May-21
Aug-21
Sep-21
Oct-21
Jan-22
May-22
Aug-22
Sep-22
Japan LNG Europe LNG

Brent crude price Newcastle coal price (RHS)

Figure 40. US benefits from low oil prices (net importers)… Figure 41. …but they gain a lot through gas exports business
12000 400 16
350 14
10000
300 12
Thousands barrel/day
billion cubic feet

8000 250 10
USD/MMBTU
200 8
6000
150 6
4000 100 4
50 2
2000
0 0
0
Sep-15 Sep-16 Sep-17 Sep-18 Sep-19 Sep-20 Sep-21 Sep-22
Net import (export) US Crude oil export US Crude oil import US gas export (RHS) Henry hub gas price
Oil and gas prices outlook

We expect oil prices to be sustain in >$80 in longer terms
We adjusted the benchmark oil price in the table below to reflect the most recent state of the oil and gas industry. We
forecast 2022F Brent crude to be $102/bbl, -7% lower than our prior projection, because we expect oil prices to be around
$90/bbl until October, then rising due to the winter season in November. We raise our 2023F estimates by +8% because we
expect China's reopening economy would exacerbate the S-D. Given the number of projects that will operate in the future,
we reduced our long-term assumption by -5%, implying that the oil price will be around c10y avg at $71/bbl (avg 2013-21),
in our opinion. We expect gas price to follow the trends of the oil prices as well.
Figure 42. Trimegah’s new oil price assumptions
Source: Bloomberg, Trimegah research
Figure 43. Gas prices assumption based on JCC Figure 44. Gas prices assumption based on HSFO
Source: Trimegah Research, Bloomberg Source: Bloomberg, Trimegah Research

Company Background
Medco Energi was first established in 1980 as the first Indonesian drilling service company by its founder, Arifin Panigoro,
under the name PT Meta Epsi Pribumi Drilling. In 1992, PT Meta Epsi Pribumi became an E&P company with operation in East
Kalimantan. Company went public on Indonesian Stock Exchange in 1994 and changed its name to PT Medco Energi
Corporation. Over the years MEDC has evolved to become an energy and natural resource company with three main
business segments: Oil & Gas, Power, and Copper & gold mining. The oil and gas business mostly located in Indonesia (79%
of total reserves), while the international business (21% of total reserves) located in several countries such as Vietnam,
Thailand, Yemen, and Oman.
The power business runs gas, solar PV, geothermal, and hydro power facilities in Indonesia as an independent power
producer (IPP) with capacity of 939 MW and as an operational & maintenance at 1,925MW. MEDC also has a non-
consolidated stake in Amman Mineral Nusa Tenggara (AMI, 23.15%), a large Indonesian copper and gold mine located in
Sumbawa, Nusa Tenggara. Other than that, MEDC in the past did a lot of M&A on the non O&G sectors. On the bright side,
we have not seen any major M&A beyond O&G sector since 2020.
Figure 45. MEDC asset’s location
Source: Company
Figure 46. MEDC shareholders composition as of Sept 2022
*as of Sep 5th 2022

Source: Company

MEDC’s O&G business: The current and future focus
Figure 47. MEDC’s consolidated oil & gas assets
Source: Company, Trimegah Research
Oil and gas are Medco’s main businesses, contributing to c94% of revenue in 6M22. MEDC leveraged its many subsidiaries to
indulge in the O&G business. In total, MEDC has a stake in 23 projects: 15 in Indonesia and 8 internationally (5 producing).
The total O&G reserves of Medco have been in a steady uptrend in the last 9 years through many organic M&A and the
discovery of new reserve, with the huge last uptick in 2Q22 due to the inclusion of Corridor block production by full quarters
(1Q22 inclusion was only 1month). MEDC's main strategy has always been to acquire a good producing asset at a fair or
even lower-than-market price and then develop the asset into a more valuable asset.
The interesting thing about MEDC's oil and gas business is that it mostly operates on a PSC or concession contract, except
for Oman. The Oman asset operates under a service contract, meaning that all oil and gas produced in the field are owned
by the Oman government, MEDC is only entitled to a service fee paid by the Oman government. The Area 47 asset in Libya
is also worth mentioning as it has c61mmoe of crude oil. But we don’t calculate it on our forecasting because we don’t think
Libya assets will become material in the future as MEDC doesn’t plans to produce it given its insecurity of Libya country.
Currently, the majority of MEDC's production originates from Indonesia, particularly beginning in 2022F when the corridor
block begins to contribute.
Figure 48. MEDC production per block and its shares in 2021 Figure 49. MEDC production per block and its shares in 2022F
Source: Company, Trimegah Research Source: Company, Trimegah Research

MEDC’s gas selling price uses two methods: fix and index based
There are 2 ways MEDC’s natural gas (pipelines) prices are formed, fixed and indexed. Fixed meaning MEDC sells its gas to
the other party at a fixed cost. Indexed price follows different indexes for the price such as the HFSO and Japan crude oil
index. Assets that use indexed price are: 1) Senoro Toili, 2) Block B, 3) Sinphuhorm, and 4) Corridor block (20% of the
volume), while the rest block are fixed (ranges from $5-6.5/boe). We are expecting the indexed price to contribute to 21%
of total gas volume in 2022F.
M&A on the O&G business; MEDC’s main strength
One of MEDC greatest strength lies in their strategic M&A decision. MEDC usually purchases an operating asset from a
prominent player looking to exit Indonesia's O&G business at a cheap rate (MEDC tends to receive a discount). MEDC’s last 2
notables acquisition on O&G were on the Block B (owned by ConocoPhillips) in 2016 and Ophir (2019). MEDC acquired Block
B from ConocoPhillips with cost of $261mn (implies $7.7/boe) in 2016. During the 6 years of its operational, MEDC has spent
c$218mn of capex to increase production and increase it reserves. As a results, Block B total reserves (includes production)
increased from only 33.9mmboe to be 81.6mmboe, an increase of 141%. The additional reserve per boe is only $4.6/boe,
which is quite small given its position as one of the gas blocks that have been operating for a long time. Hence, MEDC only
needs to spend a relatively small capex.
On the Ophir case, the case is quite different. Ophir Energy Ltd is an independent upstream oil and gas exploration and
production company that has a wide range of oil and gas assets both in Indonesia and in Southeast Asia. The total
identifiable net assets of Ophir were USD623.8mn while the amount of paid was $297mn (implies $4.9/boe). During its 3-
years ownership of the assets, MEDC not only managed to successfully operate the assets, it is also successful in extending
its asset’s life, proven by the increasing total implied reserves value (production + reserves) while also maintaining
production level. The total reserves plus total produced by the asset were 64.5 mmboe (2019 reserves: 60.5mmboe). We
calculate Ophir's additional reserve per boe at $8.8/boe, which is quite high, but understandable given that, while Ophir is an
operating asset, production has not yet peaked. As a result, MEDC must spend more money on it in order to improve its
overall assets. Overall, we expect this pattern to continue with the most recent acquisition asset, Corridor Block. Although in
our base calculation we do not forecast any additional reserve on Corridor.
Figure 50. MEDC’s notable M&A on the O&G industry
Figure 51. MEDC is successful in both operating the asset and improving its asset’s life

Acquiring one of the biggest and profitable gas block in Indonesia, Corridor Block
Fantastic assets at a very low price, thanks to its timely acquisition

MEDC entered transaction to acquire 100% of ConocoPhillips Indonesia Holding Ltd (“CIHL”) from Phillips International
Investment Inc. CIHL holds a 100% interest in Grissik (ConocoPhillips Grissik Ltd) (“CPGL”) and a 35% interest in Transasia
Pipeline Company. CPGL owns 54% working interest and was the operator of the corridor block, an Indonesian gas-focused
asset located in Sumatra. The block has 7 producing gas fields and 2 producing oil fields. The corridor acquisition was funded
through a $400mn 2028 notes (4Q21) and a $450mn 2-year amortizing loan (1Q22) which is on track to be fully repaid by
end of 2024 according to the company notes. Note that as of 1H22, $208mn of its loan has been repaid since Corridor
acquisition. The deal was completed on March 3rd, 2022, resulting in MEDC owning a 54% interest in the corridor asset and
a 35% interest in Transasia Pipeline Company. The deal was valued at USD1.35bn, but MEDC only paid cUSD788bn for the
asset. This is because since the deal was signed in 2021, all cash flow from the asset are already considered MEDC’s. From
the signing until the transaction completion date, the block managed to print cUSD575mn of cash, implies a huge advantage
for MEDC.
Previously, CIHL's license was extended from 2023 to 2043, with a noteworthy difference being a decrease in working
interest (WI) from 54% to 46% and a change in PSC license from cost recovery to gross split. In our opinion, the license
change is neutral for MEDC because, as an operating asset, the risk not covered by the government is not material.
However, MEDC may benefit from this because they will need to be more efficient because the government will no longer
fund their cash cost. Overall, according to management, next year will be MEDC's high before declining in 2024F due to
decreased WI in the corridor block, and those numbers will be MEDC's long-term aim.
Figure 52. Corridor Block area – Strategic location in Sumatra Figure 53. PT Transportasi Gas Indonesia (TGI)
Source: Company Source: Company
Corridor block profile

Corridor block is Indonesia’s 2nd largest gas block in Indonesia after BP Tangguh. Corridor Block has 11 active contracts, 10
to domestic costumer while the remaining 1 contract is to GSPL Singapore. Currently Corridor Block’s remaining contract is
684TBTU, in which the daily contract volume in 2022 is 955BBTUD. Note that MEDC has 54% working interest on it. The first
gas was delivered in 2003 to PGN West Java. Currently, 90% of Corridor Block’s contract will expire in 2023F, while the other
10% will expire in 2026F. We may see the announcement of the new agreement between this year and next year. However,
even though the gas price is currently relatively high, there is still a risk in the domestic market for asking a lower price.
Because the government is currently responsible for ensuring that cheap gas at $6/mmbtu remains available until at least
2024F. In our base case scenario, nevertheless, we expect the new deal would be priced at the same price as before.

Figure 54. Corridor block’s gas contract agreement
Corridor Block Active contract

No Customer WI Agreement date Original contract (TBTU) Remaining contract quantity (TBTU) Daily contract quantity (BBTUD) Length/Expire % volume DCQ
1 GSPL Singapore 54% 12 Feb 2021 (First Gas Aug 03) 2380 127 232 Aug-23 24%
2 PGN West Java 54% 9 Aug 2004 (First gas Oct 07) 2310 289 412 Sep-23 43%
3 EHK 54% 30 Oct 2007 (First Gas Jan 09) 65.7 12.7 20 Dec-23 2%
4 PGN Central Sumatera 54% 31 May 2010 34 5.7 12.5 Dec-23 1%
5 PLN 54% 04-Mei-15 43.8 1.4 3 Dec-23 0%
6 PUSRI 54% 25-Mei-16 133 57.7 73 Dec-23 8%
7 PGN Dumai 54% 17-Mei-17 57 26.6 37 Dec-23 4%
8 PGN RU Dumai 54% 03-Nov-17 65 28.7 40 Dec-23 4%
9 PGN Batam 3 54% 12-Nov-18 37.5 14 20 Dec-23 2%
10 PHR Rokan 54% 06-Agu-21 133 116 100 Dec-26 10%
11 PGN Jargas & BBG 54% 14-Okt-21 7.5 5.1 5.82 Dec-23 1%
Total 5,267 684 955
MEDC Portions (54%) 369 516
The corridor block's gas reserve in 2021 was c660bcf while the total reserve is 125mmboe. Corridor block’s gas production
runs at 326mmscfd or 61mboepd, bigger than MEDC’s existing gas production rate. While its oil runs at c2mbbls. Note that
this is a net interest owned by MEDC before deducted it for govt’s shares. Corridor’s gas production contract rate is 80%
fixed rate at c$5.8-6/mmbtu while the rest (20%) is linked to the High Sulphur Fuel Oil (HSFO), for its Singaporean
customer. The biggest improvement from Corridor compared to MEDC existing business is the cash cost. Corridor block cash
cost is only $4-5/boe, 50-60% cheaper than MEDC’s consolidated cash cost. This is because the corridor block's reservoirs
are more concentrated compared to other assets. Meaning, drilling, and lifting activities can be focused on one spot, hence
reducing the cost. We forecast the corridor block's addition will push down MEDC's blended cash cost to a cUSD7.5/boe level.
At current rate, Corridor block reserve will be depleted by end of 2026F (assume no additional reserve in the future), which
also become our base scenario. However, as we have mentioned before, MEDC always managed to prolong its asset's life in
previous acquisitions. We expect the addition of Corridor block to MEDC’s asset will contribute greatly to MEDC’s total
production volume. But we are also expecting existing production volume to continue to decline given the nature of O&G
assets (depleting over the time).
Figure 55. MEDC’s production trends on its existing field. We Figure 56. Corridor’s cheaper cash cost will make MEDC’s cash
expect the cash cost to be around c$10/boe cost to decline by up to 20-30% to only <$8/boe

Figure 57. We expect fixed gas portion to dominate MEDC’s Figure 58. Expecting gas portion to rise >74% with corridor
production volume until 2026F. In addition, we expect Senoro’s contribution. We also expect increase from Senoro (LNG) which
expansion to kick in 2025F for supporting Amman smelter contribute to indexed gas portion
100%
90% 39% 38% 40% 37% 23% 22% 23% 24% 26%
80% 78%
77% 77% 76% 74%
70%
60% 61% 62% 63% 21% 20% 21%
60% 25%
27%
50%
40% 33%
32% 33%
30% 38% 56% 58% 56% 51% 47%
20%
30% 27% 31%
10% 23%
0%
2018 2019 2020 2021 2022F 2023F 2024F 2025F 2026F
Fixed gas Indexed gas Oil Total gas
Figure 59. ASP trends. Even though we expect ASP to lower in Figure 60. We expect MEDC to report c78% of its gross revenue
coming years, in terms of value it will be much bigger as net reported revenue (P&L) due to the impact of PSC
From the oil side, we expect corridor to only contribute slightly due to Corridor’s nature of a gas-focused asset. We do expect
the revenue from oil to jump in 2022F on the back of rising benchmark oil prices. However, after 2022F we expect revenue
from this segment to start falling on the back of softening oil prices and lower lifting volume from the assets.
Figure 61. O&G revenue contribution trend Figure 62. O&G margin trend; expects high margin
80%
71% 73% 71%
70%
60%
60% 55% 55%
52% 50%
50% 48%
47%
50% 55% 43% 43%
52%
40% 45%
44% 44% 43%
28%
30% 35%
33%
30%
20%
10% 18%
0%
2017 2018 2019 2020 2021 2022F 2023F 2024F
Oil and gas GPM Oil and gas OPM Oil and gas EBITDA margin

Corridor is a highly profitable block
Even though Corridor is only recorded for 4 months during 1H22. Corridor 1H22 revenue (net) generated $337mn (29% of
MEDC's 1H22 revenue) and PBT of $167mn, or margin of 49.5% (32% contribution). This demonstrates how profitable the
Corridor block is. We expect that the contribution will increase in 2023F before beginning to drop in 2024F, with an avg
EBIDA of >$600mn.
Figure 63. Corridor operational and financial summary
Valuing corridor block yields an equity value of $632mn or $692mn if including Transasia
We valued the corridor block using the DCF valuation method with a WACC of 9.5%, we assume that the block will produce
oil and gas until 2026F. For the valuation we put in 10% ESG discount. This method and assumption yield an equity value of
USD631mn which implied a share price of IDR376/sh.
Figure 64. Corridor valuation

Sensitivity on additional Corridor block potential reserve
We are not considering corridor block's potential additional reserve after MEDC investment in our forecasting as we want to
be conservative. Nonetheless, we provide sensitivity ranging from 0 to 100 mmboe of additional reserves.
Figure 65. Corridor’s potential reserve sensitivity to MEDC’s target price

MEDC’s mining business: Waiting to be unlocked
In August 2016, MEDC executed a conditional sales purchase agreement (SPA) to purchase 50% of PT Amman Mineral
Investama (AMIV) with PT AP Investment as the seller. MEDC acquired a bargaining purchase discount of USD467mn on the
deal, making the deal have an estimated value of USD404mn and was completed on November 2nd 2016. MEDC’s 50%
ownership of AMIV translates to 41.1% ownership of PT Amman Mineral Nusantara (AMNT), and hence a 41.1% ownership
to the Batu Hijau concession. In 2018 MEDC exchange its 50% ownership of AMIV to 39.35% ownership of AMI (Amman
Mineral Indonesia).
Also in 2018, MEDC, through its subsidiary, PT Medco Services Indonesia (MSI), acquired 5.10% of AMI, but management
decided to sell its investment in MSI in the same year. In 2020, MEDC divested 10% of its ownership to PT Sumber Mineral
Citra Nusantara (SMCN) in a transaction valued at $202mn. But, as of August 2022, only $80.9mn out of $202mn has been
paid by SMCM. As an effort to pay its payables, SMCM will transfer 2% of its ownership of AMI to MEDC valued at c$51mn,
which will decrease SMCM's payables to MEDC to c$70mn. The 2% of ownership will be transferred by the end of 2022. In
2020, MEDC’s ownership was diluted from 29.35% to 23.13% because of Amman’s right issue. In addition, as a form of
covenant on a bank loan AMNT took, AMI is allowed to pay a dividend to its shareholders only if an initial public offering has
already taken place for AMI's shares.
The Batu Hijau concession is one of the world’s largest copper and gold project located in West Sumbawa Indonesia. Batu
Hijau operates under an operation production special mining business license (IUPK-OP) which is valid until 2030, with a
25,000ha concession area consisting of four blocks. This open-pit mine began its operation in 2002.
AMNT is also currently focusing on developing the Elang project, one of the world’s largest undeveloped copper-gold
porphyry deposits, located 60km east of the Batu Hijau mine. The pre-feasibility study was completed in 2018. A feasibility
study and a project optimization study for the Elang project are expected to begin in 2022. According to MEDC, Elang has a
potential production of 300-430Mlbs of copper and 350-600k oz gold (annualy).
Figure 66. Combined resources of Batu Hijau and Elang Figure 67. Expecting copper price to soften while gold price to
concession is one of the largest in the world steadily go up
AMNT Reserves and Resouces as of Dec 21

Copper Reserves (Mlbs) 17,540 4.5 1,917 2000
4.23 1,869
Batu hijau 7,040 1,771 3.97 1,805
4.0 1800
Elang 10,500
1,800 1,805
Copper Resources (Mlbs) 40,093
3.5 1600
Batu Hijau 16,093 3.63 3.61 3.60
$/lb
Elang 24,000 2.96 1,393
$/oz
2.80
3.0 1400
1,259 1,269
Gold Reserves (Koz) 23,900 2.72

2.80
2.5 1200
Batu hijau 8,900
Elang 15,000 2.0 1000
Gold Resources (Koz) 14,797 2017 2018 2019 2020 2021 2022F 2023F 2024F LT
Batu Hijau 14,797 Copper price Gold price (RHS)
Elang 33,754
We are expecting a softer benchmark copper prices in coming years due weaker China’s property demand.
We forecast our copper price to reflect the most recent state of the base metals industry. We forecast that copper price in
2022F will soften to an average of $3.97/lbs (1H22:4.43/lbs), this decrease is to reflect the current slowing demand from
property sector in China amid high inflation level and covid-19 lockdowns. Potential upside risk include the recent
announcement from Evergrande, Chinese property giant, to resume 668 out of 706 frozen projects (c94%). We forecast gold
price to remain in an uptrend on the back of gold being a hedge to inflation.

Figure 68. We expect smoother transition from phase 7 to phase 8 as AMI has started to deploy capex since Phase 7
900
800 Phase 6
Phase 7 Phase 8 Phase 9
700
Phase 5
600
500
400
300
200
100
0
Copper (Mlbs) Gold (koz)
Source: Company, Newmont, Trimegah Research
Amman’s jump in production volume can be explained by their different production phases. Currently Amman is entering its
phase 7 which is why we are seeing a big increase in production. Concerns arise on how production level plummet on each
phase transition. But we do not anticipate an output decline such that in 2010-2012 or 2017-2019, Amman’s management
mention that AMI has been paralleling spending capital expenditure for phase 8, which will result in a smoother transition
between phases.
Figure 69. Expecting copper sales to peak in 2022F and Figure 70. Gold sales to also peak in 2022F, but its ASP will
gradually soften in following years remain in an uptrend
800 2,000
450 4.5
1,864
399 683 672 1,900
400 380 700
371
585 1,800
331 4.21 4.0
350 600 1,799 1,807
1,793 1,788 1,700
3.89 492
300 271 500
1,600
3.63 3.5
250 228 3.59
$/oz
Mn lbs
k oz
$/lbs
400 1,500
200 1,338
3.0 300 1,400
150 130 126 1,225 1,300
2.87 200 152
100 2.71 2.69 2.5 118 1,200
1,219 68
2.50 100 54
50 1,100
0 2.0 0 1,000
2017 2018 2019 2020 2021 2022F 2023F 2024F 2017 2018 2019 2020 2021 2022F 2023F 2024F
Copper sales Copper ASP (RHS) Gold sales Gold ASP (RHS)
We forecast Amman to book a net profit margin (NPM) of 32% in 2022F. Note that they recorded a 1H22 net profit margin of
36%. We expect a decrease in net margin on the back of a softening copper price in 2H22 at $3.5/lbs (1H22: $4.43/lbs). By
forecasting consistent mining activity and lower metal prices in the following year, we expect the net profit margin of Amman
to continue to decline to 15% in 2025F (based on Newmont consensus projection). In addition, we consider this NPM number
to be conservative compared to Newmont NPM when they operate the asset in phases 5 and 6.
Figure 71. Amman revenue and NPM trends Figure 72. Amman profit contribution to MEDC
3000 50%
2711 1,000 45%
2521 40% 39% 868
2500 2337 40%
30% 800
32% 35%
20% 29% 630
2000 24% 25%
600 30%
18% 10%
USDmn
23% 23% 23% 421 23%

USDmn
25%
1500 9% 1299 0% 400 316
23% 301
20%
1003 -10%
1000 200 15%
-20% 86
433 388 -30% 10%
500 0
-32% -40% 5%
-39% -125
0 -50% -200 0%
2018 2019 2020 2021 2022F 2023F 2024F 2019 2020 2021 2022F 2023F 2024F 2025F
Net profit % to MEDC (RHS)

Copper revenue Gold revenue NPM (RHS)

Amman’s smelters. AMNT is currently in the process of building a smelter for its copper. This initiative is in compliance
with the 2020 mineral and coal mining law. AMNT is committed to realizing these initiatives through its subsidiary, PT
Amman Mineral Industri (AMI). The smelter is expected to have a capacity of 900k dry tonnes of copper concentrate
annually (copper concentrate typically contains 20-30% of copper) and will be located near AMNT’s port at Benete Bay,
Sumbawa. The China Non-ferrous Metal Industry’s Foreign Engineering and Construction Co., Ltd (NFC China) has been
appointed to become the main contractor for the construction, while the design will be carried out by PT Pengembangan
Industri Logam (PIL).
Amman valuations: Ready to be unlocked. We value Amman by using target 2023F P/E of 11.1x, which is 30% discounts
to peers’ average. On the net profit side, we use average 2023-27F net profit to consider the volatility during mining phase
transitions, which we think is already very conservative. We could see a big increase in MEDC’s valuation if Amman’s owner
decides to list its company on Indonesia Stock Exchange (IDX). Note that Amman can’t distribute dividend if they do not list
its company in IDX.
Figure 73. Amman’s equity value calculation
Source: Trimegah Research

MEDC is not acquiring non-O&G assets again since 2020
Medco's notable M&A acquisitions since 10y ago (2012). We use the estimated profit (loss) based on MEDC's financial
statement reporting. The biggest benefit comes from selling AMI's ownership in 2020, although keep in mind that the figures
are based on our simplistic calculation not company’s profit estimates. On the bright side, MEDC has not bought non-O&G
assets since 2020, which we believe is due to the low return on investment when compared to focusing solely on its
specialty, the O&G business.
Currently MEDC has 6 JV with total equity of $594mn. The biggest one comes from DSNLG, while the smallest one is SMCN
(One of Amman’s shareholders).
Figure 74. Summary of MEDC’s JV

Figure 75. MEDC M&A list since 2012 excludes O&G business

Sensitivity analysis on target price, EBITDA, and net profit
Figure 76. Target price sensitivity to brent crude oil price and O&G cash cost. Note that Our target price is IDR1,671/sh
(rounding Rp1.7k/sh)
Brent oil price

Target price -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5%
-5% -1.3% -0.8% -0.4% 0.0% 0.4% 0.9% 1.3% 1.7% 2.2% 2.6% 3.0%
-4% -1.5% -1.0% -0.6% -0.2% 0.3% 0.7% 1.1% 1.6% 2.0% 2.4% 2.8%
-3% -1.6% -1.2% -0.8% -0.3% 0.1% 0.5% 0.9% 1.4% 1.8% 2.2% 2.7%
-2% -1.8% -1.4% -0.9% -0.5% -0.1% 0.3% 0.8% 1.2% 1.6% 2.1% 2.5%
-1% -2.0% -1.5% -1.1% -0.7% -0.3% 0.2% 0.6% 1.0% 1.5% 1.9% 2.3%
Cash cost 0% -2.1% -1.7% -1.3% -0.9% -0.4% 0.0% 0.4% 0.9% 1.3% 1.7% 2.1%
1% -2.3% -1.9% -1.5% -1.0% -0.6% -0.2% 0.3% 0.7% 1.1% 1.5% 2.0%
2% -2.5% -2.1% -1.6% -1.2% -0.8% -0.3% 0.1% 0.5% 0.9% 1.4% 1.8%
3% -2.7% -2.2% -1.8% -1.4% -0.9% -0.5% -0.1% 0.3% 0.8% 1.2% 1.6%
4% -2.8% -2.4% -2.0% -1.6% -1.1% -0.7% -0.3% 0.2% 0.6% 1.0% 1.5%
5% -3.0% -2.6% -2.2% -1.7% -1.3% -0.9% -0.4% 0.0% 0.4% 0.8% 1.3%
Figure 77. EBITDA sensitivity to brent crude oil price and O&G cash cost. Note that our 2023F EBITDA is $1.67bn
Brent oil price

EBITDA -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5%
-5% -2.3% -1.6% -0.9% -0.1% 0.6% 1.3% 2.0% 2.7% 3.4% 4.1% 4.8%
-4% -2.5% -1.8% -1.1% -0.4% 0.3% 1.0% 1.7% 2.4% 3.1% 3.8% 4.6%
-3% -2.8% -2.1% -1.4% -0.7% 0.1% 0.8% 1.5% 2.2% 2.9% 3.6% 4.3%
-2% -3.0% -2.3% -1.6% -0.9% -0.2% 0.5% 1.2% 1.9% 2.6% 3.3% 4.0%
-1% -3.3% -2.6% -1.9% -1.2% -0.5% 0.3% 1.0% 1.7% 2.4% 3.1% 3.8%
Cash cost 0% -3.5% -2.8% -2.1% -1.4% -0.7% 0.0% 0.7% 1.4% 2.1% 2.8% 3.5%
1% -3.8% -3.1% -2.4% -1.7% -1.0% -0.3% 0.5% 1.2% 1.9% 2.6% 3.3%
2% -4.0% -3.3% -2.6% -1.9% -1.2% -0.5% 0.2% 0.9% 1.6% 2.3% 3.0%
3% -4.3% -3.6% -2.9% -2.2% -1.5% -0.8% -0.1% 0.7% 1.4% 2.1% 2.8%
4% -4.6% -3.8% -3.1% -2.4% -1.7% -1.0% -0.3% 0.4% 1.1% 1.8% 2.5%
5% -4.8% -4.1% -3.4% -2.7% -2.0% -1.3% -0.6% 0.1% 0.9% 1.6% 2.3%
Figure 78. Net profit sensitivity to brent crude oil price and O&G cash cost. Note that our 2023F net profit is $390mn
Brent oil price

Net profit -5% -4% -3% -2% -1% 0% 1% 2% 3% 4% 5%
-5% -4.9% -3.3% -1.8% -0.3% 1.2% 2.7% 4.2% 5.7% 7.3% 8.8% 10.3%
-4% -5.4% -3.9% -2.4% -0.9% 0.7% 2.2% 3.7% 5.2% 6.7% 8.2% 9.7%
-3% -5.9% -4.4% -2.9% -1.4% 0.1% 1.6% 3.1% 4.7% 6.2% 7.7% 9.2%
-2% -6.5% -5.0% -3.5% -1.9% -0.4% 1.1% 2.6% 4.1% 5.6% 7.1% 8.7%
-1% -7.0% -5.5% -4.0% -2.5% -1.0% 0.5% 2.1% 3.6% 5.1% 6.6% 8.1%
Cash cost 0% -7.6% -6.1% -4.5% -3.0% -1.5% 0.0% 1.5% 3.0% 4.5% 6.1% 7.6%
1% -8.1% -6.6% -5.1% -3.6% -2.1% -0.5% 1.0% 2.5% 4.0% 5.5% 7.0%
2% -8.7% -7.1% -5.6% -4.1% -2.6% -1.1% 0.4% 1.9% 3.5% 5.0% 6.5%
3% -9.2% -7.7% -6.2% -4.7% -3.1% -1.6% -0.1% 1.4% 2.9% 4.4% 5.9%
4% -9.7% -8.2% -6.7% -5.2% -3.7% -2.2% -0.7% 0.9% 2.4% 3.9% 5.4%
5% -10.3% -8.8% -7.3% -5.7% -4.2% -2.7% -1.2% 0.3% 1.8% 3.3% 4.9%

Financial Outlook
Profit & Loss
Figure 79. Oil and gas will continue to become MEDC’s Figure 80. Lower O&G cash cost will push O&G GPM higher
largest revenue contributor while power GPM expected to stabilize at 62%
1400 70%
3000 62% 62% 62%
17 1200 81 60%
2500 17 79
128 131 17 49%
1000 83 50%
2000 133 43% 42%
50% 50%
48%
USDmn
2 800 40%
USDmn
1500 17 43%
212 13 122 25%
2213 2278 600 1149 30%
1000 136 1948 59 1096
53
28% 941
1161 1184 400 20%
500 951
57
500 510
200 10%
0 266
2019 2020 2021 2022F 2023F 2024F
0 0%
-500
2019 2020 2021 2022F 2023F 2024F
Oil and gas Power Others Growth
Oil and gas Power plant O&G GPM (RHS) Power plant GPM (RHS)
Figure 81. Blended GPM improved on the back of lower Figure 82. Lower o&g cash cost also pushes blended OPM
O&G cash cost higher
1400 60% 1200 42% 45%

41%
1226 39%
1174 49% 1026 40%
1200 50% 973
1000
43% 50% 51% 1021 35%
1000 40% 30% 829
40% 800 30%
800 24%
USDmn
USDmn
29% 25%
30% 600
547 566 20%
600
14% 403
20% 400 329 15%
400 314
10%
10% 200 158
200
5%
0 0% 0 0%
2019 2020 2021 2022F 2023F 2024F 2019 2020 2021 2022F 2023F 2024F
Total gross profit Blended GPM (RHS) Total Blended OPM (RHS)
Figure 83. Expecting constant depreciation for power and a Figure 84. Blended EBITDA and EBTIDA margin trend
decreasing depreciation over the years for O&G

Figure 85. We expect PBT to gradually decrease on the Figure 86. Tax rate for O&G business to remain at c50%
back of lower production from O&G and mining business
Figure 87. We expect MEDC to book its highest earnings Figure 88. MEDC’s non-core earning usually is due to selling
this year, with a softening result in subsequent year of an asset, we assume no such thing in our model
500 25%
432 500 25%
390 428
400 20% 390
400 20%
18% 15%
300 16% 262 18% 262 15%
300 16%
12% 10% 10%
200 200 12%
4% 2%
USDmn
USDmn
5% 5%
100 47 100 33
0% 0%
0 0
-5% -5%
-39 -100
-100 -76 -10%
-10%
-3% -200 -6% -15%
-200 -172
-15%
-193 -300 -16% -20%
-300 -18% -20% 2019 2020 2021 2022F 2023F 2024F
2019 2020 2021 2022F 2023F 2024F
Core profit Core profit margin (RHS)
Net profit NPM (RHS)
Balance Sheet
Figure 89. MEDC to experience a downtrend in net gearing Figure 90. Net debt/EBITDA to also experience a downtrend
ratio on the back of debt payment and increasing cash following debt repayment and increase in EBITDA
4,000 3.0
2.7
2.5
3,500 3,500 5.5 6.0
2.3 2.5 3,083
2.1 3,000
3,000 2,739 2,707 2,731 5.0
3,050 2,535
2.0 2,500 3.8
2,500 4.0
4.4
USDmn
2,037
1.4
USDmn
2,000
(x)
2,000 1.5 1,586 1,670

(x)
3.0
3,450 3,250 1.0 1,405
1,500 3,195 3,005 3,212 1,500
1.9
1,013 1.0 713 1.5 1.5 2.0
1,000
1,000 715 627
491
456 481 0.5 1.0
500 297 367 500
0 0.0
0 0.0 2019 2020 2021 2022F 2023F 2024F
2019 2020 2021 2022F 2023F 2024F
Net debt Total EBITDA Net debt/EBITDA (RHS)
Gross debt Cash Net gearing (RHS)

Figure 91. The rise of MEDC’s EBIT will improve its interest Figure 92. ROAE to peak at 2022F and gradually soften on
coverage the back of lower earnings
1,200 4.1 4.5 40% 34%

3.9 1026
973 4.0 30%
3.6 24%
1,000
3.5
829 20% 14%
800 3.0 10% 10%
8%
1.8 10% 5%
USDmn
2.5 3% 2%
(x)
600 1.4 4%
2.0 0% 7% 6%
403 4%
0.6 1%
400 329 1.5 -1%
282 -10% -3%
227 225 250 248 233
1.0 -3%
200 158
-20%
0.5 -18%
0 0.0 -30%
2019 2020 2021 2022F 2023F 2024F 2019 2020 2021 2022F 2023F 2024F
Finance cost Total operating profit Interest coverage (RHS) ROAE ROAA ROIC
Cash flow
Figure 93. We expect MEDC will begin to generate Figure 94. .. which could be used to pay dividends to
consistent free cash flow.. shareholders
60 60%
53% 53
1,000 853 877 830 51
50 50%
576 529
458 463
500 388
275
161 206 40 40%
83
0
USDmn
-231
-85 30 30%
-228 -231 25
-269 -293 -318 -300 -300
-500 -357
20 20%
-743 14%
-1,000 12%
-1,172 10 10%
-1,500
2019 2020 2021 2022F 2023F 2024F 0 0
0 0%
CFO CFI CFF Free cash flow 2020 2021 2022F 2023F 2024F
Dividends DPR % to net profit (RHS)
Overall, on P&L side, we forecast MEDC’s best earnings to come in 2022F before gradually coming down on the back of lower
commodity prices (exc. gold) and lower production output. We also expect during this period of high commodity prices and
production output, MEDC will be able to gradually improve its balance sheet by lowering its leverage. Net gearing forecasted
to go down from 2.1x in 2021 to 1.0x in 2024F. We are also forecast that MEDC will start to consistently give back to its
shareholder in the form of dividend. Note that the last time MEDC payout their dividend was in 2015.

MEDC ESG strategy – Road to Net Zero
MEDC aims for net zero Scope 1 and 2 greenhouse gas (GHG) emissions by 2050 and net zero Scope 3 emissions by 2060.
To achieve this, there are three pillars for their Climate Change Strategy, which are:
1. Emissions Intensity Reduction, by switching diesel generators with electricity (Rimau, Bangkanai, Oman assets),
substituting nitrogen in pneumatic supply with electric air compressors (Oyong, Sampang), and replacing GEGs with
solar power installation (Wortel, Sampang, Block B).
2. Transition to Low Carbon Energy, by expanding natural gas portfolio by acquiring Corridor PSC, collaborating
with PLN and Grab to develop EV ecosystems, and participating in Thailand’s carbon reduction market.
3. Managing Emerging Physical Risks, by monitoring climate trends and explore opportunities to maintain their
asset operation and the safety of their employees.
In addition, MEDC’s Sustainalytics ESG Risk rating is 42.2 (ranks 44th in the O&G producer industry and 38th in the O&G
exploration and production sub industry; way better than avg coal producer in Indonesia) while its MSCI ESG rating is BBB.
Figure 95. MEDC’s net zero expectation timeline
Source: Company
Figure 96. E&P Scope 1&2 GHG Emissions Figure 97. E&P Methane Emissions
6 180
5.3 158
160
5 4.6 136
4.4 140 131
4 3.5 120
3.1 98
thousand tCO2e
100
million tCO2e
3 83
80
2 60
40
1
20
0 0
2019 2020 2021 2025F 2030F 2019 2020 2021 2025F 2030F
MEDCO aims to cut scope 1&2 GHG emissions by 20% in 2025 and 30% in 2030. To accomplish this, MEDCO has committed
to an upstream CCS pilot project by 2025, the use of renewable energy resources, hydrogen, and the expansion of Natural
Carbon Capture, as well as collaboration throughout supply and value chains to increase efficiency. MEDCO will reveal Scope
3 and establish its goals by 2025. MEDCO also intends to reduce methane emissions by 25% by 2025 and 37% by 2030. To
accomplish this, MEDCO will begin focusing on lowering flaring, venting, and fugitive emissions, with the goal of eliminating
regular flaring by 2030 or sooner.

Figure 98. Renewable Mix Installed Capacity
62%
72% 72% 74% 70%
38%
28% 28% 26% 30%
2019 2020 2021 2025F 2030F
Renewable IPP Gas IPP
MEDC also has a target for renewable equity shared installed capacity in the power sector. MEDC aimed for 26% renewable
IPP in 2025 and 30% in 2030, higher than the Indonesian government's target of 23% in 2025 and 25% in 2030.
Other than reducing the carbon footprint affected by its operation, Medco Energi also protects the individuals involved in
their business as well as the need of good Health, Safety, and Environment (HSE) leadership at all levels. MEDC have several
targets regarding this and strategies to achieve it.
Figure 99. MEDC long-term ESG target
MEDC long-term target Current status Strategies

Zero work fatalities that cause 1. Process safety performance
2021: Achieved
death in all assets. 2. Contractor safety ambassador
Medco program to improve Medco’s safety
2021 LTIR O&G: 0.0 culture and CHSEMS
Lost Time Incident Rate (LTIR) is implementation.
2021 LTIR Power: 0.0
below the average of industry
3. Contractor management and
peers in Indonesia.
Asia/Australasia leadership engagement to give
2021 LTIR IOGP: 0.14 insights from field-site incidents.
Medco 4. Engage contractor management
2021 TRIR O&G: 0.39 team on regular basis through HSE
leadership training and site visits.
Total Recordable Injury Rate 2021 TRIR Power: 0.0 5. Established cross-functional
(TRIR) is below the average of emergency response teams at all
industry peers in Indonesia. facilities and assets.
Asia/Australasia 6. Regular training and table-top
exercises to practice emergency
2021 TRIR IOGP: 0.69 preparedness and responses.
All assets continue to apply
Complete occupational health
the actions from evaluation
hazard assessments on all assets.
results.

Valuation
We value Medco Energi Internasional using the sum of the parts (SOTP), with oil & gas business using the discounted cash
flow (DCF) method (WACC 9.5% includes 10% ESG discounts). For power plant business, we used a target EV/EBITDA of
8.54x, implying a 35% discount to its global peers. To value the mining business, we are using a target P/E of 11.1x,
implying a 30% discount to its global peers, we expect the multiple to re-rate once the owner of Amman listed its stock on
IDX. For Medco Geopower Sarulla JV we are using a P/BV target of 0.25x (75% disc. To MEDC’s current P/BV). For other JVs
such as Api Metra Graha, Sumber Mineral Citra Nusantara, and Apico LLC we are using a target P/BV of 0.5x (50% disc. to
MEDC’s P/BV).
Using the above method and assumption, we arrived at a total equity value of $2.8bn (IDR42trn) for MEDC. O&G business
contributes the most with a 52% contribution to equity value, the Corridor block acquisition alone contributes an equity
value of USD692mn (IDR10.4tn; 47% of MEDC O&G business or 24% of MEDC total equity value). Amman has an equity
value of USD1.04bn and contributes 37% to MEDC equity value, while its others JV contributes 9% or $263mn. This equity
value translates to target price of IDR 1,700/sh (+74% ups.). MEDC is only trading at 4.2x 2023F P/E. But if we exclude
Amman, MEDC is only trading at 2.41x 2023F P/E. We expect the re-rating would be visible once MEDC starts to deliver
consistent profit on its O&G and stable production on AMI. Downside risks: Iran nuclear deal, global economic recession,
higher than expected inflation rate.
Figure 100. MEDC SOTP valuation summary
Figure 101. Oil and gas valuation

Figure 102. Power plant valuation Figure 103. Amman valuation
Power plant
EBITDA 2023F (USDmn) 48
Peers avg 2023F 13
ESG Discounts 35%
Target EV/EBITDA 2023F 8.5
EV (USDmn) 411
Cash 2023F (USDmn) 143
Debt 2023F (USDmn) 325
Minority 2023F (USDmn) 201
Equity value (USDmn) 28
Figure 104. Oil and gas peers; Our valuation implies a 49% EV/reserve discount compared to global peers

Figure 105. Power plant peers’ valuation table. We expect 35% discounts to avg 2023F EV/EBITDA
Figure 106. Metals mining peers’ valuation table. We expect the value would be unlocked when Amman IPO
Figure 107. EV/EBITDA band forward 1 year for the last 10 years. MEDC is still trading at -48% to its 10y avg
12
10
0
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
Fwd EV/EBITDA band MEDC Avg 5.66x +1 STD 7.75x +2 STD 9.83x -1 STD 3.58x -2 STD 1.50x
Figure 108. P/BV band forward 1 year for the last 10 years. PBV is trading at
6.00
5.00
4.00
3.00
2.00
1.00
0.00
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
-1.00
Fwd P/BV band MEDC Avg 1.41x +1 STD 2.20x
+2 STD 2.99x -1 STD 0.63x -2 STD -0.1x

Ownerships positioning
From ownership perspective based on its free float, we can see that MEDC has the least total (foreign and local) number of
institutional investors (pension fund, mutual fund, insurance, and foundation) amongst selected O&G play in JCI (MEDC,
PGAS and AKRA). Although if we only consider local institutional investors, AKRA has less local institutional investor
compared to MEDC, but AKRA is currently full of foreign institutional investors.
Figure 109. Local institution shareholders; AKRA currently has Figure 110. Foreign institution shareholders; MEDC has the
the lowest number of local institutional investors compared to least number of foreign institutional investors compared to AKRA
MEDC and PGAS and PGAS
Source: KSEI, Trimegah Reserach Source: KSEI, Trimegah Reserach
Figure 111. Total institution shareholders (foreign + local); Figure 112. Local individual shareholders: MEDC’s local
MEDC has the least number of institutional investors compared individual shareholder has been in an uptrend compared to AKRA
to AKRA and PGAS and PGAS
70% 45%
65% 40%
60% 49.6% 33.2%

35%
55%
30%
50%
25%
45% 48.6%
20%
40% 20.1%
15%
35%
10%
30%
30.1% 9.4%
25% 5%
20% 0%
Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
AKRA PGAS MEDC AKRA PGAS MEDC
Source: KSEI, Trimegah Reserach Source: KSEI, Trimegah Reserach

Appendix
Power Business
PT Medco Power Indonesia, originally established as PT Medco Power Karimata, was founded in 2004 as an Independent
Power Producer (IPP) and provider of Operation and Maintenance (O&M) services. Currently, the firm owns and runs power
generators of more than 3,100 MW dispersed over 15 Indonesian locations, engaging in the following business activities: gas
IPP, geothermal IPP, hydro IPP, and other renewables, and O&M services. IPP is a privately owned Electricity Producer
Company that develops, builds, owns, and operates power plants and carries out power purchase agreements with PLN.
Meanwhile, O&M services run power plants owned by third parties.
Figure 113. Operating assets. Gross operating installed capacity per 1H22L 939 MW (IPP)
Subsidiary Location Ownership Installed Generator Operating
Capacity Status
Non-renewables IPP 564.2MW

PT Dalle Energy Batam 79.99% PT Medco Kansai Power 84.1MW 55.55 MW PLTG, 20.6 MW 
Batam Indonesia CCPP and 8 MW Chiller
20% PLN Batam
0.01% PT Dalle Energy
PT Energi Prima Patih, Galung, 92.50% PT Medco Kansai Power 12.5 MW PLTG 
Elektrika Prabumulih, South Indonesia
Sumatera. 7.50% PLN Engineering
PT Multidaya Prima Kali Doni, 85% PT Medco Kansai Power Indonesia 12.5 MW PLTG 
Elektrindo Palembang, South 15% PLN Engineering
Sumatera.
PLTG 20 MW Batam 100% PT Medco Power Indonesia 20 MW truck mounted units 

Truck-Mounted
Mobile Units
PT Mitra Energi Batam 54% PT Medco Energi Menamas 84.1MW 2x27.75 MW SCPP, 20.6 
Batam 10% PT Medco Power Indonesia MW CCPP and 8 MW
6% YPK PLN Chiller
30% PLN Batam
PT Energi Listrik Batam 95% PT Universal Batam Energy 76 MW 2 units of PLTG 
Batam 1.51% PT Universal Gas Energy
3.49% PT Medco Power Indonesia
PT Medco Ratch Pekanbaru, Riau 51% PT Medco Power Sentral 275 MW PLTG 
Power Riau Sumatera (from:Feb
49% Ratchaburi 2022)
PT Medco Sumbawa, NTB 99% PT Medcopower Energi Baru 26 MWp Construction

Sumbawa Gas 1% PT Medco Power Indonesia
Renewables IPP 374MW

PT Bio Jatropha Cianjur, West Java. 99% PT Sangsaka Agro Lestari 9 MW 3 Horizontal Francis 
Indonesia 0.01% PT Sangsaka Hidro Selebes Turbine
PT Pembangkitan Cianjur, West Java. 99.99% PT Medco Power Indonesia 9 MW 2 Horizontal Francis 
Pusaka 0.01% PT Dalle Panaran Turbine
Parahiangan
Sarulla Operations Sarulla, North 18.99% PT Medco Power Indonesia 330 MW, 
Ltd Sumatera 18.25% INPEX operational
24.75% Itochu
24.75% Kyushu Electric Power
12.50% Ormat International
PT Medco Cahaya Banyuwangi, East 51% PT Medco Geothermal Indonesia 2x55 MW Exploration
Geothermal (PLTP Java 49% PT Ormat Geothermal Power
Ijen)
PT Medco Solar Bali West Bali 51% PT Medco Power Indonesia 25 MWp Not yet
Barat 49% Solar Philippines Power Project operating
Holdings, Inc comercially
PT Medco Solar Bali East Bali 51% PT Medco Power Indonesia 25MWp Not yet
Timur 49% Solar Phillipines Power Project operating
Holdings, Inc comercially
PT Medcopower Sumbawa, NTB 99% PT Medcopower Energi Baru 26 MWp 
Solar Sumbawa 1% PT Medco Power Indonesia (from: June
2022)

At the end of 2021, Medco Power had a gross operating installed IPP capacity of c638MW. Then, on February 10, 2022, the
Riau IPP Combined Cycle Gas Power Plant, with a capacity of 275MW, started commercially operating. This project began
with the appointment of PT Medco Ratch Power Riau (MRPR) as the winner of an open tender by PLN in April 2015.
Consequently, the total operating installed capacity increased to 913MW in 1Q22. Later, in June 2022, Sumbawa PV 26 MWp
was put into service, culminating in a total installed capacity of 939MW in 1H22.
Figure 114. Gross Operating Installed Capacity (1H22) O&M: 1,925 MW
Subsidiary Location Ownership Installed Capacity Operating

Status
Non-Renewables Operation & Maintenance (O&M) 1,595 MW
Tanjung Jati B Jepara, Central 75.1% PT Medco General 2x660 MW Operating

Power Services Java Power Services
19.9% AF Consult OY
5% PT Medco Power Indonesia
PLTMG Luwuk Luwuk, Central N/A 40 MW Construction

Sulawesi
Medcopower Pekanbaru, Riau 95% PT Medco Kansai Power 275 MW Operating

Servis Indonesia Indonesia
(MPSI)
4% PT Medco Power Indonesia
1% PT Medco Geothermal
Nusantara
PLTU Sulut-1 Bolaang N/A 100 MW Construction

Mongondow,
North Sulawesi
PLTU Timor-1 Kupang, NTT N/A 100 MW Construction
Renewables O&M 330MW
Medco North Tapanuli, 95% PT Medco Kansai Power 3x110 MW Opearting

Geothermal North Sumatera Indonesia
Sarulla (PLTP
Sarulla) 4.96% PT Medco Power
Indonesia
0.04% PT Medco Energi

Nusantara
Medco Power had a total installed O&M capacity of 1,650MW by the end of 2021. In 1Q22, the total installed capacity grew
to 1,925MW as Medcopower Servis Indonesia (MPSI) began to operate in February 2022, in tandem with the commencement
of MRPR. In 2018, MPSI was granted a contract with PT Medco Ratch Power Riau ("MRPR") to perform O&M at PLTGU Riau
275 MW. There was no additional O&M installed capacity from 1Q22 to 1H22.
Figure 115. Power revenue trend Figure 116. Power margin trend
250 237 25% 60%
212
49% 49% 49% 49% 49%
50%
200 20%
42% 42%
19% 161 39%
155 158
152 40%
150 136 15% 32%
USDmn
15% 122 29% 29% 30% 29% 29% 29% 29%

30% 25%
100 12% 10% 30%
28%
68 20% 16% 25% 25% 25% 25% 25%
9% 23%
8% 7% 8%
50 6% 7% 5%
10%
13%
0 0% 0%
2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F 2017 2018 2019 2020 2021 2022F 2023F 2024F 2025F
Power revenue % Power to total (RHS) Power GPM Power OPM Power EBITDA margin

Production Sharing Contracts (PSCs)
Figure 117. PSC – cost recovery schema Figure 118. PSC – gross split schema
PSC (Production Sharing Contract) laid down the terms under which a proportion of the oil or gas produced is divided
between the contractor and the resource holder. In MEDC’s case, the resource holder is the country where the asset
operates. For the contractor/O&G Company, the PSC provides a binding contract that revenue gained from the asset will
mostly be used to recover their initial investment and operating costs, creating a good return on investment level. For the
country, it provides the opportunity to extract valuable resource with minimum risk. PSC can be divided into two schemes;
cost recovery and gross split.
In a cost recovery PSC, gross revenue will first be divided through:
1) FTP (First Tranche Petroleum), where the contractors and the government received petroleum equivalent to 20%
(example number, actual number may vary) of the output before any operating costs were deducted. The FTP was
then divided according to the contracts' equity shares. The distribution scheme is usually 65% for the government
and 35% for contractors.
2) Then comes the cost recovery, where all the operating expense, including depreciation, are paid first, note that the
depreciation method follows the PSC rule rather than the usual straight-line method.
3) Equity to be split is the remainder of the revenue. Split between contractor and government. Distribution will
usually be in the range of 70%/30% for the government.
4) DMO, for every barrel taken from Contractors to supply domestic needs, Govt. will pay a DMO fee with a much
lower price than the market price of oil (~25% discount).
5) Taxable income. After paying the cost, revenue that is left is taxable by the government. Tax rate will usually be
around 45%
While, in a gross split PSC, the gross revenues will be divided through:
1) Base split, the gross revenue is immediately split between contractor and government with no regards of how cost
recovery. The split in this phase is usually 57%/43% for the government. The base split percentage can be adjusted
based on several components such as: 1) field location, 2) reservoir type, 3) production stages, 4) oil/gas prices,
etc.
2) DMO, for every barrel taken from Contractors to supply domestic needs, Govt. will pay a DMO fee with a much
lower price than the market price of oil (~25% discount).

3) Taxable income. After paying the cost, revenue that is left is taxable by the government. Tax rate will usually be
around 45%
The main difference between the two contracts have been summarized in the figure below
Figure 119. Differences between PSC cost recovery and gross split
Category PSC Cost Recovery PSC Gross Split
Concept The operating costs are incurred by the The calculation of split between the Government
cooperation contractors (KKKS) to produce oil and the Contractor is calculated in advance
and will later be borne by the government. (directly from the gross revenue). Operating
costs are the full responsibility of the contractor.
Cost recovery Could reach 100%. None.
Procedure Before starting operations, the contractor must The contractor only needs to explain the Work
provide a Work Program & Budget so that the Program rather than requiring budget approval.
government knows the initial planning and the
contractor must obtain approval from SKK
Migas.
Bureaucracy Cost recovery agreement is complicated and Easier and simpler. The government does not
lengthy. More government interventions. interfere with the contractor's budgeting and
decision making.
However, the Gross Split will not eliminate

state’s control on:
1. Determination of work area
2. Determination of production and lifting
capacity, as well as commercial aspects
of oil and gas.
Efficiency Not efficient. Since 2015, cost recovery has been Contractors will naturally make savings. State’s
greater than the state's oil and gas revenues. oil and gas revenue is more certain.
Split percentage Depends on the agreement. Government share Base split 57:43 for oil and can be adjusted
ranges from 60-70%. The split between govt. based on variable and progressive components.
and contractors tends to remain unchanged.
DMO Price SKK Migas pays the Contractor the full ICP price Full ICP.
for its DMO for the first 5 years after commercial
production begins. For the following years, this
is decreased to 10% or 25% of the original price
(depending upon the PSC generation). The price
used is the Weighted Average Price.
FTP a. 15% for Conventional None.

b. 20% for frontier
Source: Company, Trimegah Research, several sources

MEDC reserves and production contribution on all O&G assets
Figure 120. MEDC’s oil reserves contribution on all O&G assets
MEDC oil reserves map 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F 2035F
Indonesia assets
South Natuna Sea Block B 9% 8% 7% 6% 5% 4% 2% 0% 0% 0% 0% 0% 0% 0% 0%
Senoro Toili Tiaka 11% 12% 12% 12% 13% 13% 13% 12% 11% 9% 7% 5% 2% 0% 0%
South Sumatra 3% 3% 2% 2% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Rimau 7% 7% 6% 5% 4% 3% 2% 1% 0% 0% 0% 0% 0% 0% 0%
Lematang 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Block A 3% 3% 3% 4% 3% 3% 3% 2% 2% 1% 0% 0% 0% 0% 0%
Madura 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Tarakan 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Sampang 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Bangkanai 1% 1% 1% 1% 1% 1% 1% 1% 1% 0% 0% 0% 0% 0% 0%
Simenggaris 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Corridor block 0% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
North Sokang (exploration) 2% 2% 2% 2% 2% 2% 2% 3% 3% 3% 3% 3% 3% 4% 4%
Bengara (exploration) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
West Bangkanai (exploration) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
% Indonesia asset 37% 37% 35% 32% 30% 27% 23% 19% 16% 13% 11% 8% 5% 4% 4%
International assets
Block 12W (Chimsao) 3% 3% 2% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Bualuang 11% 10% 9% 8% 6% 4% 1% 0% 0% 0% 0% 0% 0% 0% 0%
Tunisinia 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Sinphuhorm 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Block 9 Yemen 6% 6% 7% 7% 7% 7% 8% 7% 6% 5% 4% 3% 2% 0% 0%
USA 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Libya (area 47) 41% 44% 47% 51% 57% 62% 68% 74% 78% 81% 85% 89% 93% 96% 96%
% International asset 63% 63% 65% 68% 70% 73% 77% 81% 84% 87% 89% 92% 95% 96% 96%
Figure 121. MEDC’s gas reserves contribution on all O&G assets
MEDC gas reserves map 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F 2035F
Indonesia assets
South Sumatra 3% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Rimau 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Lematang 2% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Block A 11% 7% 8% 9% 9% 10% 9% 8% 7% 6% 4% 0% 0% 0% 0%
Madura 3% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Tarakan 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Sampang 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Bangkanai 5% 3% 3% 4% 4% 5% 4% 4% 4% 3% 3% 2% 0% 0% 0%
Simenggaris 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Corridor block (bcf) 0% 32% 28% 20% 11% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Total Indonesia assets (bcf) 93% 95% 95% 94% 92% 91% 90% 89% 88% 86% 83% 78% 71% 56% 0%
Block 12W 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Bualuang 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Tunisinia 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Sinphuhorm 2% 1% 2% 2% 2% 2% 2% 1% 1% 0% 0% 0% 0% 0% 0%
Block 9 Yemen 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
USA 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Libya (area 47) 4% 3% 4% 5% 6% 7% 8% 10% 11% 13% 17% 22% 29% 44% 100%
Total international assets 7% 5% 5% 6% 8% 9% 10% 11% 12% 14% 17% 22% 29% 44% 100%
Figure 122. MEDC’s oil and gas reserves contribution on all O&G assets
MEDC oil and gas reserves map 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F 2035F
Indonesia assets
South Sumatra 3% 2% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Rimau 3% 2% 2% 2% 2% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0%
Lematang 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Block A 8% 6% 6% 7% 7% 7% 7% 6% 5% 4% 2% 0% 0% 0% 0%
Madura 2% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Tarakan 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Sampang 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Bangkanai 3% 2% 3% 3% 3% 3% 3% 3% 2% 2% 1% 1% 0% 0% 0%
Simenggaris 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Corridor block (bcf) 0% 23% 19% 13% 7% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Total Indonesia assets (bcf) 72% 77% 75% 72% 68% 64% 62% 59% 55% 50% 44% 37% 28% 18% 3%
Block 12W 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Bualuang 4% 3% 3% 3% 2% 2% 1% 0% 0% 0% 0% 0% 0% 0% 0%
Tunisinia 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Sinphuhorm 1% 1% 1% 1% 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 0%
Block 9 Yemen 2% 2% 2% 2% 3% 3% 3% 3% 3% 3% 2% 2% 1% 0% 0%
USA 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Libya (area 47) 18% 16% 18% 21% 25% 30% 34% 38% 42% 47% 53% 62% 71% 82% 97%
Total international assets 28% 23% 25% 28% 32% 36% 38% 41% 45% 50% 56% 63% 72% 82% 97%

Figure 123. MEDC’s oil production contribution on all O&G assets
MEDC oil production map (mbopd) 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F 2035F
Indonesia assets
South Natuna Sea Block B 5.5 (20%) 5.5 (19%) 5.5 (19%) 5.5 (20%) 5.5 (19%) 5.5 (20%) 5.5 (23%) 4.32 (23%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Senoro Toili Tiaka 2.1 (8%) 2.1 (7%) 2.1 (7%) 2.1 (8%) 3.07 (11%) 3.07 (11%) 3.07 (13%) 3.07 (17%) 4.48 (44%) 4.92 (54%) 4.92 (51%) 4.92 (55%) 4.92 (61%) 3.67 (58%) 0 (0%)
South Sumatra 2.2 (8%) 2.2 (8%) 2.2 (8%) 2.2 (8%) 2.2 (8%) 2.2 (8%) 1.58 (6%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Rimau 3.9 (14%) 3.9 (14%) 3.9 (13%) 3.9 (14%) 3.9 (13%) 3.9 (14%) 3.9 (16%) 3.9 (21%) 1.52 (15%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Lematang 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
South Natuna Sea Block A 0.9 (3%) 0.9 (3%) 0.9 (3%) 0.9 (3%) 1.5 (5%) 1.5 (5%) 1.5 (6%) 1.5 (8%) 1.5 (15%) 1.5 (16%) 1.5 (16%) 0.91 (10%) 0 (0%) 0 (0%) 0 (0%)
Madura 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Tarakan 1 (4%) 1 (3%) 0.95 (3%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Sampang 0.1 (0%) 0.08 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Bangkanai 0.3 (1%) 0.3 (1%) 0.3 (1%) 0.3 (1%) 0.3 (1%) 0.3 (1%) 0.3 (1%) 0.3 (2%) 0.3 (3%) 0.3 (3%) 0.3 (3%) 0.3 (3%) 0.26 (3%) 0 (0%) 0 (0%)
Simenggaris 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Corridor block 0 (0%) 1.64 (6%) 2 (7%) 1.7 (6%) 1.28 (4%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
North Sokang (exploration) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Bengara (exploration) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
West Bangkanai (exploration) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Total Indonesia assets 16 (59%) 17.63 (61%) 17.85 (61%) 16.6 (60%) 17.74 (61%)16.47 (60%)15.84 (65%)13.08 (70%) 7.8 (76%) 6.72 (74%) 6.72 (70%) 6.13 (68%) 5.19 (64%) 3.67 (58%) 0 (0%)
Block 12W 2.8 (10%) 2.8 (10%) 2.8 (10%) 2.8 (10%) 2.8 (10%) 2.55 (9%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Bualuang 7.2 (26%) 7.2 (25%) 7.2 (25%) 7.2 (26%) 7.2 (25%) 7.2 (26%) 7.2 (30%) 3.07 (17%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Tunisinia 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Sinphuhorm 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Block 9 Yemen 1.2 (4%) 1.2 (4%) 1.2 (4%) 1.2 (4%) 1.2 (4%) 1.2 (4%) 1.2 (5%) 2.4 (13%) 2.4 (24%) 2.4 (26%) 2.88 (30%) 2.88 (32%) 2.88 (36%) 2.71 (42%) 0 (0%)
USA 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Total international assets 11.2 (41%) 11.2 (39%) 11.2 (39%) 11.2 (40%) 11.45 (39%)10.95 (40%) 8.4 (35%) 5.47 (30%) 2.4 (24%) 2.4 (26%) 2.88 (30%) 2.88 (32%) 2.88 (36%) 2.71 (42%) 0 (0%)
Figure 124. MEDC’s gas production contribution on all O&G assets
MEDC gas production map (mboepd) 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F 2035F
Indonesia assets
South Natuna Sea Block B 12.7 (21%) 12 (10%) 12 (9%) 12 (10%) 12 (11%) 12 (12%) 12 (26%) 7.5 (18%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Senoro Toili Tiaka 16.4 (28%) 15.5 (13%) 15.5 (12%) 15.5 (13%) 22.5 (20%) 22.5 (22%) 22.5 (50%) 22.5 (56%) 32.6 (76%) 32.6 (76%) 32.6 (77%) 32.6 (79%) 32.6 (94%) 32.6 (100%) 36.5 (100%)
South Sumatra 6.4 (11%) 6.4 (5%) 6.4 (5%) 6.4 (5%) 2.6 (2%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Rimau 0.4 (1%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Lematang 2.9 (5%) 2.9 (2%) 2.9 (2%) 2.9 (2%) 1.8 (2%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Block A 6.4 (11%) 6.4 (5%) 6.4 (5%) 6.4 (5%) 6.4 (6%) 6.4 (6%) 6.4 (14%) 6.4 (16%) 6.4 (15%) 6.4 (15%) 6.4 (15%) 6.3 (15%) 0 (0%) 0 (0%) 0 (0%)
Madura 5.9 (10%) 5.9 (5%) 5.9 (5%) 5.9 (5%) 1.2 (1%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Tarakan 0.4 (1%) 0.4 (0%) 0.4 (0%) 0.4 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Sampang 2.8 (5%) 2.8 (2%) 2.8 (2%) 0.3 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Bangkanai 2.6 (4%) 2.6 (2%) 2.6 (2%) 2.6 (2%) 2.6 (2%) 2.6 (3%) 2.6 (6%) 2.6 (6%) 2.6 (6%) 2.6 (6%) 2.6 (6%) 2.6 (6%) 2 (6%) 0 (0%) 0 (0%)
Simenggaris 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Corridor block 0 (0%) 60.6 (51%) 73.8 (56%) 62.8 (54%) 62.8 (55%) 54.9 (55%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Total Indonesia assets 57.1 (96%) 115.6 (98%) 128.7 (98%) 115.2 (98%) 112 (98%) 98.4 (98%) 43.5 (96%) 39 (96%) 41.6 (96%) 41.6 (96%) 41.6 (98%) 41.5 (100%) 34.6 (100%) 32.6 (100%) 36.5 (100%)
Block 12W 0.7 (1%) 0.7 (1%) 0.3 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Bualuang 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Tunisinia 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Sinphuhorm 1.6 (3%) 1.5 (1%) 1.5 (1%) 1.5 (1%) 1.5 (1%) 1.5 (2%) 1.5 (3%) 1.5 (4%) 1.5 (4%) 1.5 (4%) 0.7 (2%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Block 9 Yemen 0.3 (0%) 0.3 (0%) 0.3 (0%) 0.3 (0%) 0.3 (0%) 0.3 (0%) 0.3 (1%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
USA 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Total international assets 2.6 (4%) 2.5 (2%) 2.1 (2%) 1.8 (2%) 1.8 (2%) 1.8 (2%) 1.8 (4%) 1.5 (4%) 1.5 (4%) 1.5 (4%) 0.7 (2%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Figure 125. MEDC’s oil and gas production contribution on all O&G assets
MEDC oil and gas production map (mboepd) 2021 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F 2035F
Indonesia assets
South Natuna Sea Block B 18.2 (21%) 17.5 (12%) 17.5 (11%) 17.5 (12%) 17.5 (12%) 17.5 (14%) 17.5 (25%) 11.8 (20%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Senoro Toili Tiaka 18.5 (21%) 17.6 (12%) 17.6 (11%) 17.6 (12%) 25.6 (18%) 25.6 (20%) 25.6 (37%) 25.6 (43%) 37.1 (70%) 37.6 (72%) 37.6 (72%) 37.6 (74%) 37.6 (88%) 36.3 (93%) 36.5 (100%)
South Sumatra 8.6 (10%) 8.6 (6%) 8.6 (5%) 8.6 (6%) 4.8 (3%) 2.2 (2%) 1.6 (2%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Rimau 4.3 (5%) 3.9 (3%) 3.9 (2%) 3.9 (3%) 3.9 (3%) 3.9 (3%) 3.9 (6%) 3.9 (7%) 1.5 (3%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Lematang 2.9 (3%) 2.9 (2%) 2.9 (2%) 2.9 (2%) 1.8 (1%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
South Natuna Sea Block A 7.3 (8%) 7.3 (5%) 7.3 (5%) 7.3 (5%) 7.9 (6%) 7.9 (6%) 7.9 (11%) 7.9 (13%) 7.9 (15%) 7.9 (15%) 7.9 (15%) 7.2 (14%) 0 (0%) 0 (0%) 0 (0%)
Madura 5.9 (7%) 5.9 (4%) 5.9 (4%) 5.9 (4%) 1.2 (1%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Tarakan 1.4 (2%) 1.4 (1%) 1.4 (1%) 0.4 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Sampang 2.9 (3%) 2.9 (2%) 2.8 (2%) 0.3 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Bangkanai 2.9 (3%) 2.9 (2%) 2.9 (2%) 2.9 (2%) 2.9 (2%) 2.9 (2%) 2.9 (4%) 2.9 (5%) 2.9 (5%) 2.9 (6%) 2.9 (6%) 2.9 (6%) 2.3 (5%) 0 (0%) 0 (0%)
Simenggaris 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Corridor block 0 (0%) 62.3 (42%) 75.8 (47%) 64.5 (45%) 64.1 (45%) 54.9 (43%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Total Indonesia assets 73.1 (84%) 133.2 (91%) 146.5 (92%) 131.8 (91%) 129.7 (91%)114.8 (90%) 59.3 (85%) 52.1 (88%) 49.4 (93%) 48.4 (93%) 48.4 (93%) 47.6 (94%) 39.8 (93%) 36.3 (93%) 36.5 (100%)
Block 12W 3.5 (4%) 3.5 (2%) 3.1 (2%) 2.8 (2%) 2.8 (2%) 2.6 (2%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Bualuang 7.2 (8%) 7.2 (5%) 7.2 (5%) 7.2 (5%) 7.2 (5%) 7.2 (6%) 7.2 (10%) 3.1 (5%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Tunisinia 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Sinphuhorm 1.6 (2%) 1.5 (1%) 1.5 (1%) 1.5 (1%) 1.8 (1%) 1.5 (1%) 1.5 (2%) 1.5 (3%) 1.5 (3%) 1.5 (3%) 0.7 (1%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Block 9 Yemen 1.5 (2%) 1.5 (1%) 1.5 (1%) 1.5 (1%) 1.5 (1%) 1.5 (1%) 1.5 (2%) 2.4 (4%) 2.4 (4%) 2.4 (5%) 2.9 (6%) 2.9 (6%) 2.9 (7%) 2.7 (7%) 0 (0%)
USA 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)
Total international assets 13.8 (16%) 13.7 (9%) 13.3 (8%) 13 (9%) 13.2 (9%) 12.8 (10%) 10.2 (15%) 7 (12%) 3.9 (7%) 3.9 (7%) 3.6 (7%) 2.9 (6%) 2.9 (7%) 2.7 (7%) 0 (0%)

Global O&G production and consumption by region
Figure 126. Oil production by region in 2021 Figure 127. Oil consumption by region in 2021
Production by region Consumptions by

(mmbopd) % (mmbopd) %
per 2021 region per 2021
China 3,994 4.4% China 15,442 16.4%
India 746 0.8% India 4,878 5.2%
Indonesia 692 0.8% Indonesia 1,471 1.6%
Malaysia 573 0.6% South Korea 2,813 3.0%
Others Asia Pacific 1,331 1.5% Japan 3,341 3.6%
Total Asia Pacific 7,335 8.2% Others Asia Pacific 7,860 8.4%
Algeria 1,353 1.5% Total Asia Pacific 35,806 38.1%
Angola 1,164 1.3% Africa 3,922 4.2%
Libya 1,269 1.4% Middle East 8,640 9.2%
Nigeria 1,626 1.8% CIS 4,307 4.6%
Others Africa 1,874 2.1% France 1,424 1.5%
Total Africa 7,286 8.1% Germany 2,045 2.2%
Iran 3,620 4.0% UK 1,236 1.3%
Iraq 4,102 4.6% Others EU 8,822 9.4%
Total EU 13,527 14.4%
Kuwait 2,741 3.0%
South America 5,622 6.0%
Oman 971 1.1%
US 18,684 19.9%
Qatar 1,746 1.9%
Others NA 3,579 3.8%
Saudi Arabia 10,954 12.2%
Total NA 22,264 23.7%
United Arab Emirates 3,668 4.1% Global consumptions 94,088 100.0%
Others Middle East 354 0.4%
Total Middle East 28,156 31.3%
Kazakhstan 1,811 2.0%
Russian Federation 10,944 12.2%
Others CIS 1,074 1.2%
Total CIS 13,829 15.4%
Norway 2,025 2.3%
United Kingdom 874 1.0%
Others EU 521 0.6%
Total EU 3,420 3.8%
Brazil 2,987 3.3%
Colombia 738 0.8%
Others SA 2,183 2.4%
Total SA 5,909 6.6%
Canada 5,429 6.0%
Mexico 1,928 2.1%
US 16,585 18.5%
Total NA 23,942 26.6%
Global production 89,877 100.0%
Source: BP, Trimegah Research Source: BP, Trimegah Research

Figure 128. Gas production by region in 2021 Figure 129. Gas consumption by region in 2021
Total gas production Total gas

(bcf/d) % consumption per (bcf/d) %
per region (2021)
region (2021)
Australia 14 3.6%
China 37 9.4%
China 20 5.2%
Japan 10 2.6%
India 3 0.7%
India 6 1.5%
Indonesia 6 1.5%
South Korea 6 1.5%
Malaysia 7 1.8%
Taiwan 3 0.7%
Others Asia Pacific 15 3.7%
Others Asia Pacific 27 7.0%
Total Asia Pacific 65 16.6%
Total Asia Pacific 89 22.7%
Algeria 10 2.5%
Algeria 4 1.1%
Egypt 7 1.7%
Egypt 6 1.5%
Others Africa 9 2.2%
Others Africa 5 1.4%
Total Africa 25 6.4%
Total Africa 16 4.1%
Iran 25 6.4%
Iran 23 6.0%
Qatar 17 4.4%
Saudi Arabia 11 2.9%
Saudi Arabia 11 2.9%
United Arab Emirates 7 1.7%
Others ME 16 4.1%
Others ME 14 3.7%
Total ME 69 17.7%
Total Middle East 56 14.3%
Russian Federation 68 17.4%
Russian Federation 46 11.8%
Others CIS 19 4.8%
Others CIS 13 3.4%
Total CIS 87 22.2%
Total CIS 59 15.1%
Norway 11 2.8%
France 4 1.1%
Germany 9 2.2%
Others EU 6 1.6%
Total EU 20 5.2%
Italy 7 1.8%
Brazil 2 0.6%
Others EU 28 7.1%
Argentina 4 1.0%
Total EU 55 14.1%
Others SA 9 2.2%
Argentina 4 1.1%
Total SA 15 3.8%
Brazil 4 1.0%
Canada 17 4.3%
Others SA 7 1.9%
US 90 23.1%
Total SA 16 4.0%
Others NA 3 0.7%
Canada 12 3.0%
Total NA 110 28.1%
Mexico 9 2.2%
Total Global production 391 100.0%
US 80 20.5%
Total NA 100 25.6%
Global consumption 391 100.0%
Source: BP, Trimegah Research Source: BP, Trimegah Research

Glossary
Glossary
# Term Definition Type
1 mmbtu Million British thermal unit Unit
2 bbtupd Billion British thermal unit per day Unit
3 tbtu Trillion British thermal unit Unit
4 bbl Barrel Unit
5 mbbls Thousand barrels Unit
6 boe Barrel of oil equivalent Unit
7 mboe Thousand barrels of oil equivalent Unit
8 mbopd Thousand barrels of oil per day Unit
9 mboepd Thousand barrels of oil equivalent per day Unit
10 mmscf Million standard cubic feet Unit
11 tcf Trillion cubic feet Unit
12 mmscfd Million standard cubic feet per day Unit
13 mtpa Million tonnes per annum Unit
14 mscf/bbl Thousand standard cubic feet per barrel Unit
15 mmbtu/mscf Million British thermal unit per thousand standard cubic feet Unit
16 mmbtu/bbl Million British thermal unit per barrel Unit
17 mlbs Million pounds Unit
18 koz Thousand ounces Unit
19 PSC Production sharing contract Contract
20 PSC JOB Production sharing contract joint operating body Contract
21 PSA Professional service agreement Contract
22 EPSA IV Exploration and Production Sharing Agreement (Libya) Contract
23 WI Working interest. Working interest owners are obligated to pay a corresponding General
percentage of the cost of leasing, drilling, producing and operating a well or unit.
24 NWI Net working interest General
25 Cost Cost recovery is the return of operating costs in the upstream oil and gas (oil General
recovery and gas) business. According to the PSC, the contractor must provide the initial
capital needed to finance exploration activities to field development. The initial
capital will be returned
26 FTP First tranche petroleum. A certain amount of crude oil and/or natural gas General
produced from a working area in one calendar year, which can be taken and
received by the Implementing Agency and/or contractor in each calendar year,
before deducting the return of operating and production handling costs (own
use).
27 DMO fee Compensation paid by the Government to contractors for the delivery of oil General
and/or natural gas to meet domestic needs using a price determined by the
Minister whose duties and responsibilities include oil and gas business activities.
28 POD Plan of development General
29 FSO Floating storage and offload (vessel) General
30 FPSO Floating production storage and offload (vessel) General
31 GSA Gas sales agreement General
32 FID Final investment decision. FID is the point in the capital project planning General
process when the decision to make major financial commitments is taken
33 MPI Magnetic particle inspection. A nondestructive inspection procedure for detecting General
surface cracks in welded areas through the use of fine iron particles in an
electrical field.
Core units used by MEDC

Figure 130. Crude oil conversion multiplier
To convert
Crude Oil Tonnes
Kilolitres Barrels US gallons Tonnes/year
(metric)
From Multiply by
Tonnes (metric) 1 1.165 7.33 307.86 -
Kilolitres 0.8581 1 6.2898 264.17 -
Barrels 0.1364 0.159 1 42 -
US gallons 0.00325 0.0038 0.0238 1 -
Tonnes/year - - - - 49.8
Figure 131. Various product conversion multiplier
To convert
Tonnes to
Products Barrels to Tonnes to Kilolitres to Tonnes to Tonnes to
barrels oil
tonnes barrels tonnes kilolitres gigajoules
equivalent
From Multiply by
Ethane 0.059 16.85 0.373 2.679 49.4 8.073
LNG 0.086 11.6 0.541 1.849 46.15 7.542
Gasoline 0.12 8.35 0.753 1.328 44.75 7.313
Kerosene 0.127 7.88 0.798 1.253 43.92 7.177
Gas oil/diesel 0.134 7.46 0.843 1.186 43.38 7.089
Residual fuel oil 0.157 6.35 0.991 1.01 41.57 6.793
Product basket 0.124 8.058 0.781 1.281 43.076 7.039
Figure 132. Natural gas and LNG conversion multiplier
To convert
Nat gas and LNG Billion cubic Billion cubic feet Million tonnes oil Million tonnes Trillion British Million barrels oil
Petajoules NG
metres NG NG equivalent LNG thermal units equivalent
From Multiply by
1 Billion cubic metres NG 1 35.315 36 0.86 0.735 34.121 5.883
1 Billion cubic feet NG 0.028 1 1.019 0.024 0.021 0.966 0.167
1 Petajoules NG 0.028 0.981 1 0.024 0.021 0.952 0.164
1 Million tonnes oil equivalent 1.163 41.071 41.868 1 0.855 39.683 6.842
1 Million tonnes LNG 1.36 48.028 48.747 1.169 1 46.405 8.001
1 Trillion British thermal nits 0.029 1.035 1.05 0.025 0.022 1 0.172
1 Million barrels oil equivalent 0.17 6.003 6.093 0.146 0.125 5.8 1
Figure 133. Various units conversion multiplier
Units
1 metric tonne = 2204.62 lb = 1.1023 short tons
1 kilolitre = 6.2898 barrels
1 kilocalorie (kcal) = 4.1868 kJ = 3.968 Btu
1 kilojoule (kJ) = 0.239 kcal = 0.948 Btu
1 petajoule (PJ) = 1 x 10^15 joules
1 exajoule (EJ) = 1 x 10^18 joules
1 British thermal unit (Btu) = 0.252 kcal = 1.055 kJ
1 tonne of oil equivalent (toe) = 39.683 million Btu = 41.868 million kJ
1 barrel of oil equivalent (boe) = 5.8 million Btu = 6.119 million kJ
1 kilowatt-hour (kWh) = 860 kcal = 3412 Btu = 3600 kJ

Management Background
Board of Commissioners
Yani Panigoro
President Commissioner
Indonesian citizen
• Master in Management from Sekolah Tinggi Manajemen-Bandung (1997)

• Bachelor’s degree in Electrical Engineering from Institut Teknologi Bandung
(1975)
• Commissioner of PT Medco Duta and PT Medco Intidinamika

• President Commissioner of PT Sarana Jabar Ventura and PT Sarana Bali
Ventura
Yaser Raimi A. Panigoro
Commissioner
Indonesian citizen
• Bachelor’s degree in Information Technology from the American University,

USA (2002)
• Deputy Managing Director of MedcoEnergi Mining (2007-2010)

• Business Development Manager of MedcoEnergi (2003)
Marsillam Simanjuntak
Independent Commissioner
Indonesian citizen
• Master’s degree in Law from Universitas Indonesia (1989)

• Bachelor’s degree in Medicine from Universitas Indonesia (1971)
• Special Staff for Tax Reform Initiative and Custom of the Ministry of Finance
(2006-2010)
• Head of Presidential Working Unit Program on Governance Reform (2006-2009)
• Secretary of Cabinet of the Republic of Indonesia (2001)
Bambang Subianto
Independent Commissioner
Indonesian citizen
• Bachelor’s degree in Chemical Engineering from Institut Teknologi Bandung

(1973)
• Partner at PT Ernst & Young Consulting (2000-2004)

• Minister of Fiinance of the Republic of Indonesia (1998-1999)
• Chairman of the Indonesian Bank Restructuring Agency (1998)

Board of Directors
Hilmi Panigoro
President Director
Indonesian citizen
• MSc from the Colorado School of Mines, USA (1988)

• MBA Core Program of the Thunderbird University, USA (1984)
• Bachelor’s degree in Geological Engineering from Institut Teknologi Bandung
(1981)
• President Commissioner (2008-2015), President Director (2001-2008), and

Director (1998-2001) of MedcoEnergi
Roberto Lorato
Director & Chief Executive Officer
Italian citizen
• Master’s degree from the London Business School, UK

• Bachelor’s degree in Energy Economics from Scuola Superiore Enrico Mattei,
Italy (1988)
• Bachelor’s degree in Mechanical Engineering from the University of Padua, Italy
(1987)
• President Director of Premier Oil Indonesia (2010-2015)

• Managing Director of ENI Indonesia (2006-2009)
• President & CEO of VICO (2003-20006))
• Managing Director of Agip, UK (2001-2002)
Anthony R. Mathias
Director & Chief Financial Officer
British citizen
• MBA from the Manchester Business School, UK (2004)

• Bachelor’s degree in Electrical Engineering from the Bradford University, UK
(1989)
• Vice President of Finance and IT Premier Oil (2012-2015)

• Various positions at ConocoPhillips and Mobil Oil (1999-2012), PriceWaterhouse
(1990), GEC Marconi (1988)
Ronald Gunawan
Director & Chief Operating Officer
Indonesian citizen
• MSc degree in Petroleum Engineering from Texas A&M University, USA

(2000)
• Bachelor’s degree in Petroleum Engineering from Institut Teknologi Bandung
• VP Operations & Development of Premier Oil (2014-2015)

• President & General Manager of Hess Indonesia (2012-2014)
• VP Assets of VICO Indonesia (2002-2006)

Amri Siahaan
Director & Chief Administrative Officer
Indonesian citizen
• MBA from University of Leicester, UK (2003)

• Bachelor’s degree in Mechanical Engineering from Institut Teknologi
Bandung (1989)
• VP Government Affairs & Business Support of Premier Oil Indonesia (2011-

2015)
• GM Operations/Start-Up Manager of Tangguh LNG, BP Indonesia (2008-
2011)
• VP Semberah Asset VICO Indonesia (2004-2006)

Research Team
Willinoy Sitorus Head of Research, Strategy willinoy.sitorus@trimegah.com +62-21 2924 9107
Fakhrul Fulvian Economics, Fixed Income fakhrul.fulvian@trimegah.com +62-21 2924 9097
Adi Prabowo Banks, and Financial-related adi.prabowo@trimegah.com +62-21 2924 9105
Heribertus Ariando Consumer, Media and Healthcare heribertus.ariando@trimegah.com +62-21 2924 9106
Richardson Raymond Telco, Tower, and Digital Media richardson.raymond@trimegah.com +62-21 2924 6325
Kharel Devin Fielim Property, CPO, Cement, Toll, Small Caps kharel.devin@trimegah.com +62-21 2924 9106
Hasbie Commodities, Auto, and Small Caps hasbie@trimegah.com +62-21 2924 6322
Alpinus Dewangga Commodities, Auto, and Small Caps alpinus.raditya@trimegah.com +62-21 2924 6322
Kimberly Bianca Banks and Economics kimberly.bianca@trimegah.com +62-21 2924 6325
Ignatius Samon Consumer, Healthcare and Media & Tech ignatius.samon@trimegah.com +62-21 2924 9143
Amyra Ibrahim Economics and Fixed Income amyra.ibrahim@trimegah.com +62-21 2924 6323
Sabrina Telco, Tower, and Digital Media sabrina@trimegah.com +62-21 2924 6325
Corporate Access
Nur Marini Corporate Access marini@trimegah.com +62-21 2924 6323
Institutional Sales Team

Beatrix Susanto Head of Institutional Sales beatrix.susanto@trimegah.com +62-21 2924 9086
Henry Sidarta, CFTe Head of Institutional Dealing henry.sidarta@trimegah.com +62-21 3043 6309
Raditya Andyono Equity Institutional Sales raditya.andyono@trimegah.com +62-21 2924 9146
Calvina Karmoko Equity Institutional Sales calvina.karmoko@trimegah.com +62-21 2924 9080
Morgan Gindo Equity Institutional Sales morgan.gindo@trimegah.com +62-21 2924 9076
Mabelista Bisset Equity Institutional Sales mabelista.bisset@trimegah.com +62-21 2924 9081
Retail Sales Team

Billy Budiman Head of Retail Equity Sales billy.budiman@trimegah.com +62-21 3043 6310
Hasbie Sukaton Deputy Head of Retail Sales hasbie.sukaton@trimegah.com +62-21 2924 9088
Untung Wijaya Area Manager (Indonesia Timur) untung.wijaya@trimegah.com +62-31 2971 8000
Jakarta Area
Ignatius Candra Perwira Kelapa Gading, Jakarta ignatius.perwira@trimegah.com +62-21 8061 7270
Ariffianto BSD, Jakarta ariffianto@trimegah.com +62-21 5089 8959
Sumatera
Juliana Effendy Medan, Sumatera Utara juliana.effendi@trimegah.com +62-61 4100 0000
Eastern Indonesia
Carlo Ernest Frits Coutrier Makasar, Sulawesi Selatan carlo.coutrier@trimegah.com +62-411 3604 379
East Java
Pandu Wibisono Surabaya, Jawa Timur pandu.wibisono@trimegah.com +62-31 2973 18000
Central Java, Area
Aloysius Primasyah Semarang, Jawa Tengah primasyah.kristanto@trimegah.com +62-24 8600 2310
Laili Ma’muroh Solo, Jawa Tengah laili.mamuroh@trimegah.com +62-271 6775 590
West Java
Bhisma Herlambang Bandung, Jawa Barat bhisma.herlambang@trimegah.com +62-22 8602 6290
Renny Nurhayati Hidayat Cirebon, Jawa Barat renny.nurhayati@trimegah.com +62-231 8851 009

Disclaimer
This report has been prepared by PT Trimegah Sekuritas Indonesia Tbk on behalf of itself and its affiliated
companies and is provided for information purposes only. Under no circumstances is it to be used or
considered as an offer to sell, or a solicitation of any offer to buy. This report has been produced
independently and the forecasts, opinions and expectations contained herein are entirely those of PT
Trimegah Sekuritas Indonesia Tbk.
While all reasonable care has been taken to ensure that information contained herein is not untrue or
misleading at the time of publication, PT Trimegah Sekuritas Indonesia Tbk makes no representation as to
its accuracy or completeness and it should not be relied upon as such. This report is provided solely for
the information of clients of PT Trimegah Sekuritas Indonesia Tbk who are expected to make their own
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officer or employee of PT Trimegah Sekuritas Indonesia Tbk accept any liability whatsoever for any direct
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This report is not intended for media publication. The media is not allowed to quote this report in any
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This report was prepared, approved, published and distributed by PT Trimegah Sekuritas Indonesia Tbk
located outside of the United States (a “non-US Group Company”). Neither the report nor any analyst who
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INVESTMENT RATING RULE:

Buy : Share price is expected to exceed more than 10% over the next 12 months
Neutral : Share price is expected to trade within the range of 0%-10% over the next 12 months
Sell : Share price is expected to trade below 0% over the next 12 months
Not Rated : The company is not within Trimegah research coverage

Analysts Certification
The research analyst(s) of PT Trimegah Sekuritas Indonesia Tbk. primarily responsible for the content of
this research report, in whole or in part, certifies that with respect to the companies or relevant securities
that the analyst(s) covered in this report: (1) all of the views expressed accurately reflect his or her
personal views on the company or relevant securities mentioned herein; (2) no part of his or her
remuneration was, is, or will be, directly or indirectly, connected with his or her specific recommendations
or views expressed in the research report; and (3) the report does not contain any material non-public
information.
The disclosure column in the following table lists the important disclosures applicable to each company
that has been rated and/or recommended in this report:
Company Ticker Disclosure (as applicable)

MEDC -
Trimegah Disclosure Data
Trimegah represents that:

1. Within the past year, it has managed or co-managed a public offering for this company, for which
it received fees.
2. It had an investment banking relationship with this company in the last 12 months.
3. It received compensation for investment banking services from this company in the last 12
months.
4. It expects to receive or intends to seek compensation for investment banking services from the
subject company/ies in the next 3 months.
5. It beneficially owns 1% or more of any class of common equity securities of the subject company.
6. It makes a market in securities in respect of this company.
7. The analyst(s) or an individual who assisted in the preparation of this report (or a member of
his/her household) has a financial interest position in securities issued by this company. The
financial interest is in the common stock of the subject company, unless otherwise noted.
8. The analyst (or a member of his/her household) is an officer, director, employee or advisory board
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MEDCO ENERGI INITIATION │ BUY WITH 74% UPSIDE

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MEDCO ENERGI INITIATION │ BUY WITH 74% UPSIDE

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COMPANY FOCUS │ 18 September 2022

Medco Energi Internasional BUY (Initiation)

EBITDA (USD mn) 491 713 1,586 1,670 1,405

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 1

Diamond Bridge PTE 21.46%

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 2

Fossil fuels remain to be essential and dominate global energy mix…………………..………........................……………. 6

EU will likely experience a gas shortage in this year’s…………………………………………………………............……………. 8

The oil price curve is forming a backwardation………………………………………………………….....................……………. 12

Macroeconomic perspective. What indicators should we aware of?……………………………………..............…………… 12

Oil and gas prices outlook………………………………………………………………………………………………………………….…………… 13

MEDC’s O&G business: The current and future focus…………………..………..............................................…………… 16

M&A on the O&G business; MEDC’s main strength……………………………………………..………………………….…………… 17

MEDC’s mining business: Waiting to be unlocked…………………..............................................................…………… 23

MEDC is not acquiring non-O&G assets again since 2020…………………..................................................…………… 26

Sensitivity analysis on target price, EBITDA, and net profit…………………………………………………………………...…………… 28

Profit & Loss…………………..………..........................................................................................................……………. 29

MEDC ESG strategy – Road to Net Zero……………………………………………………………………………………………….……………. 32

Production Sharing Contracts (PSCs)……………………………………………..………………………….……………….……………. 40

MEDC reserves and production contribution on all O&G assets……………..……………………………………….……………. 42

Global O&G production and consumption by region……………………………………………………………………………………. 44

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 3

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 4

Fossil fuels remain to be essential and dominate global energy mix

Figure 1. Global energy mix in 2013, 2021, and its change in %

Source: BP, Trimegah Research

Source: EIA annual energy outlook 2022

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 5

Source: Bloobmerg, Trimegah Research Source: Bloomberg, Trimegah Research

What about future production initiatives?

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 6

Source: OEA Consulting, Trimegah research

Source: Bloomberg, BP, Trimegah Research Source: Bloomberg, Trimegah Research

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 7

Disc. to historical avg (RHS) Russia production

EU will likely experience a gas shortage in this year’s winter

Gas in storage (TWh) %Full Storage capacity (TWh) %total EU

Source: AGSI, Trimegah Research Source: AGSI, Trimegah Research

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 8

6yr range Average 2022

Source: AGSI, Trimegah Research Source: AGSI, Trimegah Research

EU members are filling up their storage capacity…

Source: AGSI, Trimegah Research Source: Russiamatters

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 9

Russia import supply cut Russia import supply cut

Source: Bloomberg, Trimegah Research Source: Bloomberg, Trimegah Research

Source: EIA, Bloomberg, Trimegah Source: EIA, Bloomberg, Trimegah

The reopening of China's economy will be another driver of oil consumption

Source: China’s general administration of customs Source: Bloomberg, VariFlight

Source: Theglobaleconomy Source: EIA

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 11

Source: Bloomberg, Trimegah Research Source: Bloomberg, Trimegah Research

Macroeconomic perspective. What indicators should we aware of?

-10% -100% -12% -1200%

oil cons. Growth/GDP growth (RHS) Global YoY GDP growth

Source: Bloomberg, Trimegah Research Source: Bloomberg, Trimegah Research

PT Trimegah Sekuritas Indonesia Tbk – www.trimegah.com 12

Source: Bloomberg, Trimegah Research

Source: Bloomberg, Trimegah Research

Brent, coal, gas, and US O&G exports and imports charts

Japan LNG Europe LNG

Source: Bloomberg, Trimegah Research Source: Bloomberg, Trimegah Research