Medco in Talks to Potentially Take Over Ophir Energy

Indonesian oil and gas company PT Medco Energi Global PTE Ltd (Medco) has been in talks with London-based Ophir Energy plc to potentially take over the company, both parties confirmed Monday.

The potential deal would be an all-cash takeover of Ophir Energy. While the companies did not specify amounts or other details regarding the acquisition, Ophir said Medco must make an offer or walk away by Jan. 28.    

“This is a bold move by Medco, and if successful would create a Southeast Asian upstream powerhouse,” Wood Mackenzie’s research director Angus Rodger said in an emailed statement to Rigzone.

Ophir’s upstream portfolio includes assets in Thailand, Vietnam, Indonesia, Malaysia, Equatorial Guinea and Tanzania as well as exploration acreage in Mexico and Bangladesh.

“Ophir's current output of 25,000 [barrels of oil equivalent per day] boepd combined with Medco’s stated 2018 target of 85,000 boepd would take it to 110,000 boepd, of which 101,000 boepd is in-region,” Rodger added. “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.”

Rodger said a successful acquisition for Medco would substantially increase the country’s reginal footprint and diversify its mature, Indonesia-heavy portfolio.

He noted other opportunities for Medco to beef up its non-Asian exposure by adding growth options in Tanzania and Equatorial Guinea to add to existing positions in Libya, Oman, Yemen, Tunisia and the United States.

“It would also offer exposure to the global upstream hotspot that is offshore Mexico, where Ophir recently secured participation in three blocks,” he said. “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.”