Fitch assigns B to Medco Energi, notes

Fitch Ratings said it assigned a B long-term issuer default rating with a stable outlook to Medco Energi Internasional Tbk.

The agency also assigned an expected rating of B(EXP) and a recovery rating of RR4 to the proposed dollar-denominated notes issued by Medco's wholly owned subsidiary Medco Strait Services Pte Ltd., and guaranteed by Medco and several of its subsidiaries.

The notes are rated at the same level as Medco's issuer default rating as they constitute direct unsubordinated unsecured obligations of the company.

Fitch said the ratings reflect Medco's business profile as a small upstream producer, with proved (1P) reserves of 247 million barrels of oil equivalent (mmboe) and proved and probable (2P) reserves of 390 mmboe; 70% of proved reserves were developed as of end-2016. Its 1P reserve life stood at nine years at end-2016.

Medco has mostly controlling interests in six fields in Indonesia from which it derives nearly 90% of production, the agency explained. It also has a small international presence in Oman, the United States and Tunisia.

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