Medco Energi (MEDC) Stock Surges Amidst Rising Oil Prices and Positive Outlook

Jakarta – Shares of PT Medco Energi Internasional Tbk (MEDC) are experiencing a notable surge, fueled by rising global oil prices in the wake of escalating tensions between israel and Iran. The stock’s performance is further bolstered by positive recommendations from analysts, who have set high target prices, reflecting confidence in the company’s future prospects.

Medco Energi’s Q1 2025 Performance

According to research from Verdhana Sekuritas Indonesia, Medco Energi posted a net profit of US$18 million in the first quarter of 2025. This figure fell short of both Verdhana’s initial estimates and the broader consensus among analysts, who had projected a net profit of US$336 million for the entire year. The shortfall can be partially attributed to a US$20 million loss contribution from affiliate company PT Amman Mineral International Tbk (AMMN), compared to a US$23 million loss in the same quarter of the previous year.

Did You Know? Global oil prices have seen a 15% increase in the last month due to geopolitical instability in the Middle East, directly impacting energy sector stocks.

Medco Energi’s oil and gas production experienced a 9% year-on-year decline,reaching 143 mboepd (thousands of barrels of oil equivalent per day). this decrease was primarily due to reduced gas demand and ongoing facility improvements. However, the company managed to reduce cash costs by 12% quarter-on-quarter, bringing them down to US$8.4 per barrel of oil equivalent (Boe).

Upcoming Production Boost and Financial strategies

Verdhana Sekuritas Indonesia anticipates that Medco Energi will benefit from additional oil and gas production from the Natuna Block in the second quarter, estimated at around 30 mboepd (dirty).Moreover, the company has recently finalized a gas swap agreement, which is expected to optimize resource allocation and enhance operational efficiency.

Pro Tip: Keep an eye on Medco Energi’s quarterly reports for detailed insights into production volumes and cost management strategies.

The brokerage firm also projects improved performance from AMMN, driven by the normal operation of its smelter.In terms of balance sheet management, Medco Energi has proactively reduced its debt burden by repurchasing US$519 million in bonds, out of a total debt of US$3.6 billion. The company also issued US$400 million in bonds for refinancing purposes, demonstrating a strategic approach to managing its financial obligations.

“The company also released a bonds of US $ 400 million for refinancing at the last Meii. Medc is predicted to produce cash flows of US $ 680 million this year, higher than an average of five years of US $ 600 million,” Verdhana wrote, quoted on Friday (6/13/2025).

Financial Outlook and Stock Target

Verdhana forecasts that Medco Energi is poised to generate substantial cash flows of US$680 million this year, surpassing the company’s five-year average of US$600 million. This positive outlook underscores the company’s robust financial health and its ability to capitalize on favorable market conditions.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Consult with a qualified financial advisor before making any investment decisions.

What are your thoughts on Medco Energi’s future prospects? How do you see the company navigating the challenges of the energy market? Share your insights in the comments below!