Energi Mega Persada and Bumi Resources Make Merger Plans

PT Energi Mega Persada Tbk intends to merge into PT Bumi Resources Tbk. The merger will be in pooling of interest form, and the merger process will be conducted with compliance to Indonesia GAAP and all regulation relating to taxation and capital market in Indonesia. For the purpose of merger, both merger participants will use financial statements as of March 31, 2006, audited by Public Accountant Jimmy Budhi & Rekan.

Energi Mega Persada is currently one of the most substantial Indonesian owned oil and gas companies with a large and diverse portfolio of oil and gas producing assets plus assets under development, appraisal and in the exploration stage. The company is well regarded for its growth track record and its competitive positioning in the Indonesian upstream oil and gas sector and Energi Mega Persada is looking forward to substantial further production growth both from its existing portfolio and from new acquisition opportunities. Capturing all these opportunities and converting the volume to value for shareholders will require substantial capital investment.

On the other side, Bumi Resources has reputation as the large producer and exporter of high quality coal with the experience of successfully managing two strategic coal assets, PT Kaltim Prima Coal and PT Arutmin Indonesia. Management of Bumi Resources fully realizes that the energi and natural resources industry is rapidly growing, and this condition requires Bumi Resources' management to formulate more strategic business action to deal with the growing challenge and competition. One of the recent strategic actions by Bumi Resources is the divestment of all ownership in the two coal assets, KPC and Arutmin, at a most favorable offering price. Armed with the enormous proceed from divestment, Bumi Resources intends to further develop and take the most benefit out of the oil and gas sector, as well as the mineral sector and other energy resources.

This merger is a strong and preferable platform to unite all the strength and growth opportunities possessed by each Merger Participants. The combination of Bumi Resources' surplus of cash and Energi Mega Persada's abundant undeveloped gas reserves are the most fitting elements to create business synergy and value added to the shareholders of both merger participants.

Objective of Merger

  • Creating an Indonesia well-diversified natural resources company with capability to capture growth opportunities within strategy context focused on arbitraging value discontinuities.
  • Enhancing focus on upstream oil and gas sector, with niche midstream and downstream positions where there is strong upstream strategic fit, as well as the development of mineral and other energy sectors.
  • Creating a substantial and large scale company with significant portfolio depth and competitiveness advantage among other players in the industry.
  • Increasing competitiveness through the creation of larger economic scale and financial strength.
  • Creation of synergy by uniting strength factors of Bumi Resources' cash surplus and Energi Mega Persada's abundant undeveloped gas reserves.
  • Enhance assets portfolio diversity, thus giving the management more options to apply the most favorable strategy in each business sector.
  • Larger market capitalization, giving the merged company an advantageous and larger access to potential strategic partnership and also more accessibility to obtain financing alternative from financial institutions.
  • The achievement of all merger objectives will eventually create optimal value added to the shareholders of Merger Participants.

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