Medco Energi Bidding on Acreage to Increase Production

PT Medco Energi International has placed bids for interest in four blocks operated by ConocoPhillips and for an interest in one block operated by Equatorial Energy Inc. Medco will use proceeds from a $250 million bond issue earlier this year to help finance the acquisitions.

ConocoPhillips is selling its 31.25% stake in Kakap Block, 50% stake in Block A, 100% stake in Tungkal Block and 45% stake in South Jambi B Block as part of its plan to improve returns on capital and reduce debt.

Kakap Block, located 480 kilometers northeast of Singapore, currently produces 2,900 barrels of oil a day and 20.3 million cubic feet a day of natural gas. Block A in northern Sumatra is expected to produce 56 million cubic feet of gas a day by 2006. The Tungkal Block in southern Sumatra is expected to commence production in 2006 at an initial rate of 5,000 barrels per day. The South Jambi B Block in southern Sumatra is expected to begin production in the first quarter of 2004 at rates averaging 11 million cubic feet of gas a day, eventually increasing to 42 million cubic feet a day for export to Singapore. The size of the stake Medco seeks in Equatorial Energy's Sembakung Block in East Kalimantan was not disclosed. The block produces 5,303 barrels per day of oil.

Medco plans to acquire interests in ten blocks this year as part of its plan to increase output to 200,000 barrels of oil equivalent a day by 2007 from 80,000 currently.

Thailand's PTT Exploration & Production PCL owns a 34% stake in Medco.

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