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Medcoenergi Investor 1Q18 Presentation

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Medcoenergi Investor 1Q18 Presentation INVESTOR UPDATE 1Q 2018 RESULTS INVESTING IN THE FUTURE Contents 2 Introduction Highlights 3 Significant Player in Three Key Business Segments 4 Energy & Natural Resources Company Focused in Indonesia 5 Business Update Delivering On Our Commitments 6 Business Segments Overview Oil & Gas 7 Medco Power Indonesia 8 Amman Mineral Nusa Tenggara 9 Financial Performance 10 What to Expect 12 Appendix The following presentation has been prepared by PT Medco Energi Internasional Tbk. (the “Company”) and contains certain projections, plans, business strategies, policies of the Company and industry data in which the Company operates in, which could be treated as forward-looking statements within the meaning of applicable law. Such forward-looking statements, by their nature, involve risks and uncertainties that could prove to be incorrect and cause actual results to differ materially from those expressed or implied in these statements. The Company does not guarantee that any action, which may have been taken in reliance on this document will bring specific results as expected. The Company disclaims any obligation to revise forward-looking statements to reflect future events or circumstances. 1Q18 Highlights 3 o Secured long term capital structure • Right issue oversubscribed with ~$195 million raised and used for debt repayment • Warrants ‘in the money’ with expected proceeds >$200 million from July 2018 • Issued $400 million through Global USD bond in 2017 and another US$500 million in 1Q 2018 to refinance near term maturities o Strong Operational results; APAC Energy Council “Upstream Company of the Year” • Oil and gas production 85.5 MBOEPD, above guidance; annual and 3-year average reserve replacement ratio > 100% • 1Q 2018 cash costs $8.3/boe with procurement contracts locked in for medium term • 1Q 2018 EBITDA $148 million, with margins >50%; improved commodity prices continuing into 2018 • Aceh first gas delivery on budget, commissioning gas on time with lump sum EPCI contract o Medco Power Indonesia • Completed acquisition of a controlling stake; financial consolidation from Q4 2017 • Sarulla phase I units I, II and III commissioned in March 2017, October 2017 and May 2018. • Gas-to-Power synergies on track with Matang proposal in PLN ‘pipeline’ o Amman Mineral • Senior and mezzanine debt repaid, MEI PCG released; repayment triggered non recurring expenses • Began Phase 7 development, and secured further new development facility • MEI equity being diluted through pre IPO equity injections • Non-cash acquisition of 44% of Macmahon; non recurring employee downsizing expenses • Smelter studies completed, land preparation in progress and signed MoU with Freeport • Elang appraisal drilling and JORC assessment in progress with increased expected resource Significant Player in Three Key Business Segments 4 Oil & Gas Power Mining • 10 Operated Indonesian assets, 7 • Independent Power Producer (IPP) for 9 • Batu Hijau open pit porphyry copper and producing Operated Indonesian assets gold mine, Sumbawa Indonesia • 66:34 gas to oil production mix • IPPs with PLN under long term TOPQ • Developing phase 7 of the existing mine site • Gas sold under long term TOPQ contracts, backed clean energy contracts 50:50 mix of fixed; commodity linked pricing • Specialized in medium sized IPPs • Exploring 6 further prospective resources including drilling of Elang • Operating costs below $10/boe through • Third party O&M contracts 2020 • Progressing Smelter tender selection Net Reserves and Contingent Resources IPP Gross Capacity Copper and Gold Gross Reserves and Resources Copper (Mlbs) Gold (Koz) 309 Gas Oil 1,091 34,319 263 565 227 141 55 23,109 91 526 209 136 168 4,620 4,360 1P 2P Contingent Operating Pipeline Total 2P & Stockpiles Resources Resources O&G reserve data mmboe as of 1Q18; Power MW capacity data as of 1Q18; Mining reserves data as of 1H17 Energy & Natural Resources Company Focused in Indonesia 5 Block A South Natuna Senoro-Toili Block Batu Hijau Sea Block B Bengara Block Nunukan • MEB • DEB South Sokang Tarakan Block • TM2500 Block • ELB Simenggaris Block International Assets Rimau Block South Sumatra Block Lematang Block Mini Hydro • MPE Energy Building Geothermal • EPE Tanjung Jati B Sarulla • Singa Mini Hydro Geothermal Ijen Production Mining Production Power Installed Development Mining Development Power Development Exploration Mining Exploration Delivering On Our Commitments 6 • Production >85 MBOEPD, cash cost maintained<$10/boe. Net Debt to EBITDA° 1Q18 Revenue and EBITDA were up by +36% and +41% YoY. ° Consolidate Base excluding MPI • Sarulla Units I, II and III delivered on schedule. Aceh gas8.0x 100 development on schedule, on budget with first gas and 6.5x commissioning beginning in March 2018. 6.0x 5.1x 75 3.7x 3.7x • Completed oversubscribed US$195 million rights issue, 4.0x 3.0x 50 issued further >US$200 million warrants. Rights used for debt repayment in January 2018 2.0x 25 • Acquired controlling interest in MedcoPower 0.0x 0 2014 2015 2016 2017 Mid-Term • AMNT acquisition debt repaid, phase 7 development Net Debt/EBITDA Average Realized Oil Price (US$/boe) financed. Elang appraisal drilling and reserves assessment ongoing. 1Q18 Net debt to EBITDA was at 3.2x consolidate base excluding MPI $195million Rights AMNT acquisition Begin repayment AMNT issue repaying Block A Aceh debt repaid, Medco of shareholder Indonesian debt PCG released first gas loan IPO 2H18 2020 USD bond 2H18-2020 Delivered extended AMNT pre-IPO Non-core USD bond extend AMNT Phase 7 Warrants exercised Further plans 2018 maturities financed 2018 - 2020 Equity injections asset sales maturities $205m–$220m Oil and Gas 7 YoY Net 2P Reserves, MMBOE Metrics 1Q17 1Q18 Net Contingent Resources, MMBOE ∆% Life Index: 11 Years Productionº Oil 307.2 308.6 Oil, MBOPD 36.7 33.9 (7.7) Gas 263.4 Gas, MMSCFD 292.0 274.1 (6.1) 252.0 140.8 Lifting/Sales 146.0 61.3 54.6 Oil Lifting, MBOPD 27.3 25.7 (6.0) Gas Sales, BBTUPD 288.6 265.2 (8.1) Oman Service Contract, MBOPD 8.8 7.6 (13.8) 208.8 Average Realized Price 161.2 167.8 190.8 Oil, USD/barrel 51.6 63.3 22.7 Gas, USD/MMBTU 5.5 5.7 3.6 °Includes Oman Service Contract 1Q17 1Q18 1Q17 1Q18 1Q18 Oil & Gas Breakdown Cash Cost/Unit*, USD/BOE Net Hydrocarbon Productionº, MBOEPD G&A TOPQ & LongTerm Contract 15.4 87 >85 Lifting Cost 35 4.1 12.3 66 35 ~ 56 56 4.3 8.8 9.1 <10 36 Indexed Fixed 31 Oil Gas Price Price 2.7 4.0 2 ~ 3 32 32 45 34% 66% 53% 47% 11.3 8.0 52 ~ 6.1 35 5.1 6 ~ 7 24 24 49 1Q18 production: 1Q18 gas production: 78 mboepd 274 mmcfd 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Guidance Guidance *Excludes Oman Service Contract ºIncludes Oman Service Contract Medco Power Indonesia 8 YoY Metricsº 1Q17 1Q18 Gross Installed Capacity, MW Pipeline Projects, MW ∆% Production & Capacity IPP IPP O&M IPP Power Production, GWh 435 593 36.3 O&M 2,676 O&M Capacity, MW 2,150 2,150 0.0 2,557 Average Realized Price* 407 526 IPP, Cent/kwh 2.77 4.41 59.2 1,070 °Gross 100% interest *Excludes Fuel Component 990 2,150 2,150 685 565 • Medco Power shareholders: Medco Energi ~88%, IFC ~12% 385 425 • Sarulla Geothermal Power Phase I, Unit I began 1Q17 1Q18 1Q17 1Q18 commercial production in March 2017, Unit II in early October, one month ahead of schedule. O&M Power Capacity IPP Power Production Unit III commercial operation in May 2018 Gross 100%, MW Gross 100%, GWh • MedcoPower was awarded the Operation & Maintenance contract for the Sarulla Geothermal Power plants. • MedcoPower won the tender to construct a 2,150 2,150 2,908 1,820 275MW IPP in Riau, PPA was signed in April 2,136 1,320 1,320 1,733 2017. 1,305 1,360 • Matang Gas-to-Power proposal included in PLN’s Electric Power Supply Business Plan 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Guidance Guidance (RUPTL) Amman Mineral Nusa Tenggara 9 YoY Copper Gross Reserves & Resources – Gold Gross Reserves & Metricsº 1Q17 1Q18 ∆% 1H17 (M lbs) Resources – 1H17 (k oz) Production 23,109 Batu Hijau Batu Hijau 34,319 Copper, M lbs 61.6 40.4 (34.3) 3,030 3,470 Gold, k oz 49.8 19.2 (61.4) Elang Elang Sales 2P & Stockpiles 2P & Stockpiles Copper, M lbs 94.0 25.0 (73.4) Gold, k oz 128.6 16.3 (87.3) 20,079 30,849 Average Realized Price 4,620 Copper, USD/lbs 2.46 3.17 29.1 4,360 Gold, USD/oz 1,133 1,421 25.5 °Gross 100% interest Batu Hijau Reserves Resources Batu Hijau Reserves Resources • Converted Contract of Work into a Special Mining Permit and extended export permit Copper (M lbs) Production Gross 100% Gold (k oz) Production Gross 100% • Copper concentrate export permit extension for 2018 for 450,826 wmt • Acquired single largest stake in the ASX listed mining contractor Macmahon through a shares - assets transaction 801 512 697 • Completed Smelter feasibility studies and 478 signed MoU with Freeport Indonesia 288 398 • Elang Joint Ore Reserves Committee (JORC) 162 78 assessment in progress; resources improved >50% 2014 2015 2016 2017 2014 2015 2016 2017 Financial performance 10 Profit & Loss (US$ mn) 1Q17 FY17 1Q18 Balance Sheet (US$ mn) 1Q17 FY17 1Q18 Revenue 212.7 925.6 288.9 Cash and cash equivalents 157.1 489.0 439.7 - Oil and gas 210.3 855.1 231.7 Investments 920.6 887.3 1,059.2 - Power - 67.5 57.0 Fixed Assets 995.1 1,279.5 1,313.7 - Others 2.4 3.0 0.3 Total Assets 3,576.4 5,160.8 5,138.5 DDA 34.9 164.9 36.1 Total Liabilities 2,647.1 3,758.1 3,678.1 Gross Profit 105.4 420.7 151.6 S, G & A 35.5 151.4 39.7 • Loans 1,107.9 1,599.1 1,305.4 Operating Income 70.0 269.3 111.9 • Capital Market Debts 716.2 990.0 1,388.0 EBITDA 104.8 434.2 148.0 • Other Liabilities 823.0 1,169.0 984.8
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