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Introduction & Market Context
Indonesian energy company PT Medco Energi Internasional Tbk (IDX:MEDC) presented its Q1 2025 financial results on May 30, 2025, highlighting resilient performance despite seasonal challenges. The company’s stock has experienced recent pressure, trading at 1,360 IDR, down 4.56% from its previous close, though still significantly above its 52-week low of 875 IDR.
MedcoEnergi continues to position itself as a diversified energy player with operations spanning oil and gas production, clean power generation, and copper and gold mining across Southeast Asia and the Middle East.
Quarterly Performance Highlights
MedcoEnergi reported Q1 2025 EBITDA of $332 million, an improvement from the previous quarter despite seasonal headwinds. Net income reached $18 million, with return on equity (ROE) at 16%, though this represented a decline from Q4 2024 primarily due to net losses from its AMMN mining operations.
As shown in the comprehensive financial results below, the company maintained strong operational metrics across its business segments:
Oil and gas production averaged 143 mboepd during the quarter, while power sales reached 871 GWh. The company kept oil and gas cash costs under control at $8.4 per barrel of oil equivalent, well below its target of $10/boe. Capital expenditure for the quarter totaled $89 million, with $78 million allocated to oil and gas operations and $11 million to power projects.
Operational Updates
MedcoEnergi achieved several operational milestones during Q1 2025, including the inauguration of first oil from Natuna Forel by the Indonesian President and Energy Minister, and first gas from Natuna Terubuk with a domestic gas swap agreement effective from June 2025.
The company’s operational performance across its diversified portfolio is illustrated in the following chart:
In the clean power segment, MedcoEnergi brought its Ijen Geothermal Phase-1 into service and is on track to bring East Bali PV online in Q2 2025. The company has already met its 2025 renewable capacity target, demonstrating its commitment to energy transition.
The Ijen Geothermal project represents a significant milestone as the first geothermal independent power producer (IPP) in East Java:
Additionally, the East Bali Solar PV project is nearing commercial operation, with construction complete and commercial operations expected in Q2 2025:
Financial Analysis
MedcoEnergi’s financial performance demonstrated resilience in a challenging environment. The company’s EBITDA of $332 million was supported by effective cost management, though partially offset by seasonally lower gas demand. Fixed-price gas contracts contributed $108 million to EBITDA, representing 57% of total production.
The financial results show a company maintaining discipline while navigating market fluctuations:
The company’s gross debt stands at $3.4 billion, with restricted group debt at $2.8 billion. This includes $114 million from negative carry ahead of Q3 IDR bond maturities. MedcoEnergi maintains strong liquidity with cash and cash equivalents of $876 million as of end-March.
Notably, MedcoEnergi continues to outperform industry peers in terms of profitability:
The company has maintained a consistent dividend policy, with distributions increasing from $35 million in 2021 to $70 million in 2023. It has also continued its share buyback program, with approximately 380 million shares repurchased to date.
ESG Progress
MedcoEnergi has made significant strides in its environmental, social, and governance (ESG) initiatives, achieving a 27% renewable mix in its installed capacity, exceeding its 2025 target. The company has also met its 2025 interim targets for Scope 1 & 2 GHG emission and methane emission reductions.
The following chart illustrates the company’s progress on climate commitments:
In 2024, MedcoEnergi implemented 43 GHG reduction initiatives, achieving peak annual emissions reductions of 181,727 tCO2e. The company is expanding efforts on fuel and flare reduction and solar electrification, with a goal to eliminate routine flaring by 2030.
2025 Outlook
Looking ahead, MedcoEnergi has provided guidance for 2025 that reflects confidence in continued operational strength and financial discipline:
The company expects oil and gas production to reach 145-150 mboepd and power sales of 4,500 GWh for the full year. Capital expenditure is projected at $430 million, with $400 million allocated to oil and gas and $30 million to power operations.
MedcoEnergi aims to maintain oil and gas cash costs below $10/boe and keep its restricted group net debt to EBITDA ratio below 2.5x at mid-cycle prices of $65/boe. The company is targeting ROE above 15% for the full year.
Key strategic priorities include securing PSC extensions for Natuna, Sampang, and Bangkanai, completing Senoro Phase 2A and the Corridor seismic program, progressing expansions for Ijen and Batam IPPs, and continuing share buybacks, dividend distributions, and debt repayments while strengthening energy transition capabilities.
With its diversified energy portfolio and strong operational foundation, MedcoEnergi appears well-positioned to navigate market challenges while advancing its strategic objectives through 2025.
Full presentation:
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