Indonesia’s Medco in Talks to Acquire Ophir

Medco Energi Global, a unit of Indonesia’s Medco Energi Internasional, is in talks to acquire Ophir Energy, UK-listed Ophir said December 31.

“The Boards of Ophir and Medco confirm they are in discussions about a possible cash offer to be made by Medco for the entire issued and to be issued share capital of Ophir,” Ophir said.

As per UK takeover laws, Medco has until January 28 to make a firm offer for Ophir or to announce that it does not intend to move ahead, Ophir said.

Ophir Energy is an independent upstream oil and gas exploration and production company focused on Asia and Africa.

"This is a bold move by Medco, and if successful would create a Southeast Asian upstream powerhouse. Ophir's current output of 25,000 boe/d combined with Medco's stated 2018 target of 85,000 boe/d would take it to 110,000 boe/d, of which 101,000 boe/d is in-region. This would catapult the firm into being the seventh largest non-NOC upstream producer in South-East Asia, above Hess and BP, and just behind Repsol and Total," WoodMac's research director Angus Rodger said in a note published January 2.

"For Medco a successful acquisition would substantially increase its regional footprint and diversify its mature, Indonesia-heavy portfolio. It would also bulk up its non-Asian exposure by adding growth options in Tanzania and Equatorial Guinea, to add to its existing positions in Libya, Oman, Yemen, Tunisia and the US. It would also offer exposure to the global upstream hotspot that is offshore Mexico, where Ophir recently secured participation in three blocks. Following Ophir's acquisition of Santos's Asian assets last year it appeared to have pivoted its portfolio towards Asian growth, given its troubled Fortuna FLNG project in Equatorial Guinea was struggling to attract finance," Rodger added.