Medco energy gets ‘B’ rating from S&P

S&P Global Ratings has assigned its ‘B’ long-term corporate credit rating to Indonesia-based oil and gas exploration and production (E&P) company PT Medco Energi Internasional Tbk (Medco). The outlook is stable.
At the same time, the ratings agency assigned their ‘B’ issue rating to the US-dollar-denominated senior unsecured notes that Medco Strait Services Pte Ltd, a wholly owned subsidiary of Medco, plans to issue, reported an S&P statement.
“Medco unconditionally guarantees the notes. The issue rating is subject to our review of the final issuance documentation,” said the statement.
“Our ratings on Medco reflect the company’s modest oil and gas production and reserve scale, concentrated cash flows from a few fields in Indonesia, and elevated investment appetite despite high leverage.
“Tempering these weaknesses are Medco’s growing cash flows as new fields ramp up, the company’s sound control on costs, creditworthy counterparts, and good standing in credit markets,” it added.