Fitch places Medco Energi on positive watch

Fitch Ratings said it placed the B+ long-term issuer default rating of PT Medco Energi Internasional Tbk. on Rating Watch positive.

Fitch also placed the B+ rating on the company's outstanding senior unsecured U.S. dollar notes on Rating Watch positive. The recovery rating is RR4.

“The RWP follows Medco's announcement of signing a conditional sales and purchase agreement to acquire ConocoPhillips Indonesia Holding Ltd. (CIHL), which holds a 54% working interest in the Corridor Block production sharing contract (PSC), an operating asset in South Sumatra, and a 35% interest in Transasia Pipeline Company Pvt Ltd.,” Fitch said in a news release.

“We view the transaction as credit-accretive, as the acquisition will add an average of about 45 thousand barrels of oil equivalent per day (mboepd) to Medco's existing production of 100 mboepd while almost doubling the proportion of fixed-price contracts.”

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