Company Coverage
Medco Energi Internasional (MEDC IJ): Multi-year Growth Pipeline Taking Shape
NOT RATED
Current price:
Target price:
Upside:
Rp1,495
n.a.
n.a.
Analyst
Analyst
Highlights
- Delivering production growth. 1H26 production rose 19% yoy to 170 mboepd, in line with its 2026 guidance of 165-170 mboepd.
- AMMN turnaround adds a second earnings engine. MEDC's 20.9% AMMN stake should benefit as smelter ramp-up lifts 2026 gold and copper volume with consensus net profit rising from US$249m to US$953m in 2026.
- MEDC trades at 5x 2026F PE, a discount to the mean of 13.6x 2026F PE.
Analysis
Oil & gas remains the dominant earnings contributor, with cash flow concentrated in a handful of large gas-producing assets. The segment generated US$617m of revenue in 1Q26, accounting for 92% of group revenue, and contributed 91.6% of 1Q26 gross profit. 2025 net production averaged 156 mboepd, with Corridor contributing 38%, followed by Senoro Toili at 13%, and South Natuna Sea Block B at 13%. Gas represents the core of the portfolio, accounting for 72% of sales volumes, while approximately 46% of production is sold under fixed-price contracts, providing earnings stability. The reserve base remains robust, with net 2P reserves of 551 mmboe as of 2025, equivalent to an 11.4-year reserve life index (RLI). This is underpinned by a five-year reserve replacement ratio of 206% and a competitive finding cost of US$5.6/boe.
Expansion is increasingly reflected in operating performance. 1H26 production grew 19% yoy to 170 mboepd (in line with 2026 guidance of 165 170 mboepd), supported by a 70% increase in Corridor working interest (from 46%, completed in Oct 25), first oil production from Forel, first gas from Terubuk (Natuna Block B), and record output from Oman Block 60. Additional contributions came from Bualuang (Thailand), where Renewal Plan Phase I was completed and brought on stream in 2Q26, adding about 2,000 bopd of gross production, while Senoro Phase 2A reached full operational capacity in Jun 26.
Medium-term production growth is underpinned by a deep portfolio of development and exploration projects. Key growth drivers include the Sambar Field and Rebonjaro development in Corridor, with first production targeted in 2027, alongside first gas from Sakakemang (3Q27) and Paus Biru (4Q27). Growth is further supported by the newly-awarded operated Cendramas PSC in Malaysia, expected to add around 7,000 bopd of gross production. Meanwhile, further progression at Senoro Phase 2B, Amanah, Nawasena, Tanzania Blocks 1 & 4, and Oman Block 48 provide longer-term resource upside.
Highlights
- Delivering production growth. 1H26 production rose 19% yoy to 170 mboepd, in line with its 2026 guidance of 165-170 mboepd.
- AMMN turnaround adds a second earnings engine. MEDC's 20.9% AMMN stake should benefit as smelter ramp-up lifts 2026 gold and copper volume with consensus net profit rising from US$249m to US$953m in 2026.
- MEDC trades at 5x 2026F PE, a discount to the mean of 13.6x 2026F PE.
Analysis
Oil & gas remains the dominant earnings contributor, with cash flow concentrated in a handful of large gas-producing assets. The segment generated US$617m of revenue in 1Q26, accounting for 92% of group revenue, and contributed 91.6% of 1Q26 gross profit. 2025 net production averaged 156 mboepd, with Corridor contributing 38%, followed by Senoro Toili at 13%, and South Natuna Sea Block B at 13%. Gas represents the core of the portfolio, accounting for 72% of sales volumes, while approximately 46% of production is sold under fixed-price contracts, providing earnings stability. The reserve base remains robust, with net 2P reserves of 551 mmboe as of 2025, equivalent to an 11.4-year reserve life index (RLI). This is underpinned by a five-year reserve replacement ratio of 206% and a competitive finding cost of US$5.6/boe.
Expansion is increasingly reflected in operating performance. 1H26 production grew 19% yoy to 170 mboepd (in line with 2026 guidance of 165 170 mboepd), supported by a 70% increase in Corridor working interest (from 46%, completed in Oct 25), first oil production from Forel, first gas from Terubuk (Natuna Block B), and record output from Oman Block 60. Additional contributions came from Bualuang (Thailand), where Renewal Plan Phase I was completed and brought on stream in 2Q26, adding about 2,000 bopd of gross production, while Senoro Phase 2A reached full operational capacity in Jun 26.
Medium-term production growth is underpinned by a deep portfolio of development and exploration projects. Key growth drivers include the Sambar Field and Rebonjaro development in Corridor, with first production targeted in 2027, alongside first gas from Sakakemang (3Q27) and Paus Biru (4Q27). Growth is further supported by the newly-awarded operated Cendramas PSC in Malaysia, expected to add around 7,000 bopd of gross production. Meanwhile, further progression at Senoro Phase 2B, Amanah, Nawasena, Tanzania Blocks 1 & 4, and Oman Block 48 provide longer-term resource upside.
NOT RATED
Current price:
Target price:
Upside:
Rp1,495
n.a.
n.a.
Analyst
Analyst
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