PTTEP Completes Sale of Shares in New Links to Encore

PTT Exploration and Production Public Company Limited, through its subsidiary, PTTEP Offshore Investment Company Limited, has sold its 40% equity in New Links Energy Resources Limited to Encore Int'l Limited with a total cash received of US$ 236.5 million. The share purchase agreement had been signed on January 29, 2005 and the transaction was completed on February 17, 2005. New Links holds 85.5% equity in PT Medco Energi Internasional Tbk. (Medco). Accordingly, the shares sold by PTTEPO constituted 34.20% indirect equity in Medco.

The share sale was conducted jointly through a competitive bidding process with Cumin Limited (CSFB) who held another 19.9% interest in New Links. Subsequently, Encore, as an existing shareholder, exercised its pre-emptive right over all of PTTEPO's and Cumin's shares. As a result, Encore is now the sole owner of New Links.

PTTEP became a 34.18% shareholder of Medco through its acquisition of New Links shares in December 2001. An additional 0.02% interest was acquired in April of the following year by tender offer. The total acquisition costs were US$ 226.37 million. The strategy then was to establish its presence in an active and prolific petroleum exploration and production business in Indonesia through a leading exploration and production company in the country.

Throughout its 3-year participation in Medco, PTTEP has received a total of US$ 33 million in dividends. The company has gained knowledge and experience of the local environments and how the business is conducted in the country. Moreover, along the course of working together, both companies have mutually transferred expertise and built a strong partnership. Such has strengthened PTTEP's future investment in Indonesia.

The current share sale is driven by the change of PTTEP's investment strategy. Said Mr. Maroot Mrigadat, President of PTTEP, "we are now focusing on direct investment in E&P at the asset level instead of through holding companies". While PTTEP focuses its intension on the upstream petroleum business, Medco has gradually become an integrated energy company by expanding its investment into related energy business such as power generation. Indonesia's electricity demand has been recognized for its high growth potential. According to Mr. Maroot, "despite our divestment from Medco, we will maintain our good partnership and close cooperation and both companies will jointly seek E&P investment opportunities in Indonesia".

PTTEP will use the proceeds from the sales to re-invest in the E&P opportunities domestically as well as internationally, including Indonesia, Middle East and Africa to fuel its future growth.