EMP - 2009 Annual Reports PDF

a
ANNUAL REPORT 2009
Annual Report 2009 EMP

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Front cover:
A lone fisherman in balance with nature, off the
coast from Sepanjang oil field, Kangean block.
EMP is also seeking balance: between oil and gas,
between energy for our future and care for the
communities of today. Our community relations
report begins on page 38.
2 Company Profile
4 Financial & Operational Highlights
8 Message from the President
Commissioner
10 Report of the President Director
14 Review of Operations
30 Management’s Discussion and
Analysis of the Financial Condition
and Results of Operations
34 Safety, Health and Environment (SHE)
38 Community Relations
42 Corporate Governance Report
52 Share & Corporate Information
55 Glossary
57 Financial Report
Please visit us and follow our progress at:

www.energi-mp.com
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A new outlook
EMP is making sound progress. We have emerged from
the challenges faced by our industry – unprecedented
volatility in energy prices, economic recession and credit
crisis. This report is an account of the remedial measures
we have taken to restore the Company financially and
operationally. It is also a commentary on our strategy
for future growth and earnings quality, while staying
grounded on essential disciplines and best practice.

2
Company Profile
Oil and Gas Properties
One of the leading publicly listed oil and gas exploration and production companies in Indonesia,
PT Energi Mega Persada Tbk (EMP or the Company) and its wholly owned subsidiaries control working
interests in a wide ranging portfolio of oil and gas properties:
Sumatera Java Kalimantan

Malacca Strait PSC (60.49%) Kangean PSC (50%) Semberah TAC (100%)
Gebang JOB PSC (50%) Tabulako PSC CBM (70%)
Bentu PSC (100%) Sangatta-2 PSC CBM (42%)
Korinci Baru PSC (100%)
Gelam TAC (100%)
Tonga PSC (53.44%)
The Company is applying its extensive skills in reservoir management, innovative use of modern
technology and drilling techniques in the exploration and production of oil and gas in an area of over
20,000 km2. EMP is a major gas supplier to the rapidly growing industrial region of East Java, as well as
serving major customers in Sumatera and Kalimantan.

3

4
Financial & Operational Highlights
Financial Performance
(in billion Rupiah, except EPS and

2009 2008 2007* 2006 2005
Financial Ratios)
Income Statement
Revenue 1,444.4 1,859.1 1,137.5 1,459.5 1,423.6
EBITDA 107.0 863.3 350.2 190.1 599.3
Profit Before Tax (1,417.5) 18.6 (51.8) (283.8) 138.8
Income Tax (314.9) (55.5) 167.4 20.4 (14.6)
Net Profit (1,729.5) (34.9) 115.6 (263.4) 123.2
Earnings Per Share (EPS) (120.1) (2.4) 8.0 (18.7) 12.9
Balance Sheet
Total Assets 10,252.4 12,626.6 9,374.8 8,773.8 6.512,8
Net Debt 4,011.6 3,883.7 1,991.8 4,194.8 2,895.2
Equity 1,741.4 3,711.2 3,352.2 1,894.7 1,176.7
Ratios (%)
Net Profit Margin (120) (2) 10 (18) 9
ROE (99) (1) 3 (14) 10
ROA (17) (0) 1 (3) 2
Net Debt/Equity 230 105 84 221 246
Interest Coverage Ratio 8 114 110 75 358
Current Ratio 47 182 62 186 117
Total Liability to Equity 487 239 180 363 453
Total Liability to Assets 83 70 64 78 82
* restated
Product Price RealiSations
2009 2008 2007 2006 2005
Average realised liquid price (US$/bbl) 62.3 96.4 73.2 63.9 53.2
Average realised gas price (US$/mcf) 2.7 2.8 2.6 2.5 2.3

5
Production Performance (EMP working interest)
2009 2008 2007* 2006* 2005*
Oil Production (bopd)
Malacca Strait PSC 5,548 5,424 5,087 5,554 5,643
Kangean PSC 1,064 162 915** 547 773
Gelam TAC 492 197 322 339 -
Semberah TAC 852 917 752 455 -
Gebang JOB PSC 24 30 27 49 -
Total 7,979 6,729 7,107 6,950 6,423
Oil Production WI volume (mmboe) 2.9 2.5 2.6 2.5 2.3
Gas Sales (mmcfd)
Malacca Strait PSC 14 10 6 0 0
Kangean PSC 16 19 29** 58 81
Gelam TAC 1 0 0 0 -
Semberah TAC 11 15 8 0 -
Gebang JOB PSC 1 1 1 2 -
Korinci Baru PSC 16 17 6 0 -
Total 59 62 55*** 79 107
Gas Production WI volume (mmboe) 3.6 3.8 3.4 4.8 6.5
* 2005-2007 data includes Brantas PSC which was divested in 2008.

** Kangean Working Interest 50 per cent since May 2007.
*** As of 2007, gas production has been calculated in bbtud.

6 Financial & operational highlights
2009 Year End Proforma Net Reserves and Resources
(mmboe) 1P 2P 3P Contingent Resources*
Malacca Strait PSC
Oil 16 20 26 1
Gas - - - 6
Kangean PSC
Oil 0.5 5 11 -
Gas 60 113 157 6
Bentu PSC
Oil - - - -
Gas 24 48 76 -
Korinci Baru PSC
Oil - - - -
Gas 0.3 10 15 -
Gelam TAC
Oil 1 3 42 -
Gas - - - 69
Semberah TAC
Oil 5 11 23 1
Gas 2 8 28 -
Gebang JOB PSC
Oil - - - -
Gas 2 3 14 7
Tonga PSC
Oil - - - 2
Gas - - - -
Total
Oil 22.5 39 102 4
Gas 88.3 182 290 88
Grand Total 110.8 221 392 92
* 2C (best estimate)
Notes
1) Oil and gas reserves have been certified by independent certification agencies such as Gaffney, Cline and Associates, Sproule
International and MHA Petroleum Consultants.
2) Oil and gas reserves stated in the above table reflect EMP’s latest independent reserve appraisals. EMP has taken a
conservative approach to reserves in setting depreciation, depletion and amortization (DDA) policy as outlined on page 51 of
the Audited Financial Statements. When an approved plan of development (POD) contains reserve estimates lower than the
independent certification, the POD estimate is used for DDA purposes.
3) Reserves and Contingent Resources totals are subject to rounding.
2009
Annual
EMP Report 2009
Annual Report
EMP
7
Net Reserves and Resources
(mmboe) 2009 2008 2007 2006 2005

1P
Oil 22.5 25 21 20 22
Gas 88.3 87 89 100 144
Total 110.8 112 110 120 166
2P
Oil 39 42 43 48 52
Gas 182 184 185 195 215
Total 221 226 228 243 267
3P
Oil 102 105 118 137 139
Gas 290 292 284 306 280
Total 392 397 402 443 419
Contingent Resources*
Oil 4 2 2 1 1
Gas 88 88 89 91 93
Total 92 90 91 92 94
* 2C (best estimate)
Drilling Activity
(based on year spudded) 2009 2008 2007 2006 2005

Development wells 1 40 36 30 20
Exploration wells 0 3 3 8 5
Total 1 43 39 38 25
Malacca Strait PSC
Kangean PSC
Korinci Baru PSC
Development wells 0 1 1 0
Exploration wells 0 0 0 0
Gelam TAC
Semberah TAC
Gebang JOB PSC
Note: all exploration wells includes appraisal wells
EMP 2009
Annual Report 2009
Annual Report
EMP
8 Message from the President Commissioner
Looking forward
Dear Shareholder,
The Board of Commissioners met
I am pleased to introduce the 2009 regularly through the year to review
report as one filled with considerable the work of the Audit Committee and
change, review and renewal. to oversee governance and controls
on day-to-day operations, not least
At the last shareholders’ meeting the Company’s continuing safety
Christian Ponto and Yuli Soedargo record and the success achieved in
stepped down from the Board of community care programmes.
Directors and we thank them for their
efforts during challenging times. A new The Commissioners also reviewed
management team has been appointed the business plans prepared by
by shareholders to lead the company the Board of Directors, including
forward, with Imam P. Agustino as a thorough examination of cost
President Director, having formerly cutting programmes, including
served as Director. We welcome Didit those underway from the previous
Ratam as Chief Financial Officer who year, and a revitalisation strategy
brings senior management experience developed in 2009 which has already
gained at major multinational and made a considerable difference to
services companies in the oil and gas the Company’s prospects in both the
sector. Amir Balfas joined the Board short and the long term.
as Chief Operating Officer, having
previously managed the very successful I take this opportunity to thank
Malacca Strait block. There were no the management team, EMP
changes during the year to the Board of employees, and all stakeholders for
Commissioners. their continued support during this
transformative phase and I look
The management team has forward to seeing the results of the
accomplished a great deal and taken exciting plans that have been put in
some tough decisions in the last 12 place.
months to rationalise operations, curtail
capital expenditures including drilling
and exploration activity, and to return For and on behalf of the Board of
the Company to a stronger operational Commissioners,
condition as described in more detail in
the body of the report. Not least was
to crystallise and charge the costs of
a thorough overhaul of the financial
position, to de-leverage and to embark
on a stricter cost management regime. Ary Saptari Hoedaja
These measures, and the completion President Commissioner
of a successful rights issue conducted
post reporting date, have ensured the April 2010
Company is now able to proceed with
the development of key production plans
that will enhance earnings prospects.

9

Dear Shareholder, Reorganisation

Work has been completed on slimming
EMP today down the organisation. Operating
In 2009 we set out during 2009 to expenses including manpower
restructure our balance sheet, to complement have been trimmed by
return the Company to sustainable 23 per cent. We took the decision to
financial position, to reorganise into curtail drilling activities during 2009,
a leaner more efficient organisation to preserve cash while prioritising
and to refocus on our business goal as production planning around key projects.
a growing independent hydrocarbons
producer with strong portfolio of From an extensive review of the current
reserves and significant expansion project portfolio we are now more
programmes ahead. focused on production cost optimisation
– ensuring outlays are proportionate
This has been achieved. to near term expectations for revenue
generation at each field. We have
Financial restructuring assessed production plans at all sites
Just prior to this report being published working with key customers and
we have already successfully completed reverted in all cases to sales delivery
a rights issue, in February 2010. This terms at mine mouth – not to customer
critical and successful action has been site – thereby removing any exposure
included in the notes to our financial to risks and costs that are non core to
statements as a subsequent event. It our business. We have deferred to the
has important positive implications. expertise of our customers in the areas
of logistics management and pipeline
The proceeds from the rights issue, installation.
totaling Rp 4.8 trillion, have ensured that
your company will continue to operate Production and reserves – organic
on a sustainable basis. A total of growth
US$ 291 million in outstanding debt and EMP’s net fully appraised proved and
associated finance costs has already probable reserves (2P) at reporting
been repaid and our balance sheet date comprise 221 mmboe, consisting
strengthened. The proceeds will help us of 39 mmbbls oil and 1.1 tcf gas. We
first, to meet working capital needs and have a diversified portfolio of including
capital expenditure on exploration and 105 reservoirs and 36 fields with most
production drilling in 2010, and second, projects onshore. In the two largest
the capacity to secure reserves essential blocks in production terms, Kangean
for realising the Company’s medium and Malacca Strait, we operate with
term development. Going forward, experienced strategic partners including
normal business operations will provide Mitsubishi, Japex and CNOOC. Kangean
sufficient liquidity to meet routine represents about 68 per cent of our
interest and future debt repayments. total 1P reserves in gas with Malacca
Strait contributing over 70 per cent of
1P oil reserves, both blocks regarded
as offering low risk, attractive material
development opportunities.

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Our core cost base has been reduced Gas production dipped in 2009, but
and a number of changes made to by less than 5 per cent to 59 mmcfd,
improve efficiency in our operations. the main contributions coming from
Production cost escalation of 25 per cent Kangean, supplying the growth market
year on year was entertained in 2009 of East Java and Korinci Baru and
to ensure we were able to accelerate Malacca Strait serving PLN and industrial
progress in the Sepanjang oil field, in the customers respectively in Sumatera.
Kangean block, a remote location with Significantly increased gas production
specific technical issues. This has been targets have been set and these are
accomplished and we are in production based upon low risk development
at 1,064 bopd. programmes. These include the
combined Bentu and Korinci Baru blocks
On a working interest basis, we achieved in Sumatera commencing in 2010 and
total oil production for the year of 7,979 expected to ramp up our production
bopd driven by Kangean, Gelam, and levels with gas supply contracts in
modest growth from the Malacca Strait place at attractive price indications.
block to 5,548 bopd. Over the last five The considerably larger Terang Sirasun
years we have increased net 2P reserves Batur gas field, north of Bali and
from 21 mmbbl to 24 mmbbl. An very close to the Trans Java pipeline
extensive well development programme represents additional production of
is planned for 2010 with some 27 wells about 300 mmcfd to be realised in 2011.
to be drilled in the next 12 months as The outlook for gas is very positive
we continue with well management with BPMIGAS estimating that current
and reservoir optimisation, which have domestic annual sales of about 1 tcf will
proven very effective techniques in more than double in the next 8 years.
raising production levels in the past.
A fresh perspective
Recent economic and credit conditions
– with implications for the entire oil
and gas sector – has given us the
opportunity not only to place our
business on a more sustainable footing
but to review future development plans.
We have moved to pursue two highly
attractive opportunities:

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First, we will diversify our earnings Strategic priorities

having acquired, during 2009, two Let me conclude with a brief overview of
coal bed methane PSCs, working with our strategy, at this crucial point in the
strategic partners. They are Company’s development.
PT Bumi Resources Tbk, which occupies
a prominent position in the rapidly We have accomplished the task of
expanding coal sector and a subsidiary rejuvenating EMP – to set the Company on
of Pertamina. Both PSCs are for 30 a firm footing with a new management
years covering CBM Tabulako and CBM team offering considerable depth and
Sangatta-2, located at the Arutmin and expertise in the oil and gas sector.
Kaltim Prima coalmines respectively and
we intend to prove up resources at the Our priorities for the immediate future
earliest opportunity. are to demonstrate production, EBITDA
and earnings growth in 2010 and into
Second, subject to completion of terms the medium term. We are firmly focused
of a farm out agreement (FOA), having on maintaining cost efficiency and
secured the requisite funding, we operational excellence.
intend to acquire a 10 per cent interest
in the Masela PSC for a consideration Our plans include expansion – of the
of US$100 million. This is not only one portfolio, on attractive terms with highly
of the largest gas finds in Indonesia, experienced strategic partners, as earlier
but involves once again, the benefit of described, but also to build our proven
working with a strong partner, Inpex. reserves using low risk appraisal and
development drilling of core assets.
These opportunities are over two distinct
time horisons. We view the CMB projects We have the foundation in place with
as contributing to our short to medium realistic and immediate organic growth
term organic growth in production plans and positive earnings prospects,
and revenues. The Masela project is while moving ahead on building
of far larger order of magnitude with reserves and our longer term strategic
production envisaged by 2016 at 4.5 development programme for the
million tonnes per annum LNG and Company’s future.
13,000 barrels per day of condensate
and is been pursued to position the Let me take this opportunity to
Company as a pivotal participant in thank our customers, business
the long-term development of the gas partners, colleagues and not least our
sector, in part as a successor to the shareholders for their support through a
development of the Kangean block. challenging year.
Gas reserves have been assessed at
9.76 tcf (1P) with condensate recovery
associated with the 1P reserves of 176 For and on behalf of the Board of
mmbbls. We will assess infrastructure Directors,
needs for supplying LNG drawing upon
the considerable expertise of Inpex and
partners in floating LNG technology.
Imam P. Agustino
President Director

14 Review of operations
Review of Operations

15

East Java

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KAngean PSC (Effective Stake 50%)

Operator : Kangean Energy Indonesia Limited (60%)
Partner : EMP Exploration (Kangean) Limited (40%)
Area : 4,508 km2
The Kangean block contains the largest Originally acquired as 100 per cent NET PRODUCTION VOLUME
discovery of gas made off the mainland interest from BP in August 2004, the
Oil 1,064 bpd
East Java coast, comprising both onshore PSC was extended to 2030. Kangean
island and offshore locations within a PSC has provided EMP with a significant gas Gas 16 mmcfd
area in excess of 4,500 km2. EMP holds footprint from which it continues to serve
an effective interest of 50 per cent in the rapidly growing industrial region of
the PSC with Mitsubishi and Japex each East Java. Together with its proximity to
holding 25 per cent and all 3 represented pipeline infrastructure, access to a large
on the operating committee. Japex is the customer base, and large gas reserves,
nominated operator. EMP believes Kangean represents a
low risk development opportunity. The
Production is from 16 wells in the majority of this PSC’s reserves are proven
Ngimbang and Rancak gas reservoirs and represent about two thirds of the
and the Sepanjang oil field. Currently Company’s 2P reserve base.
development efforts are focused on
the large Terang Sirasun Batur gas field
located about 20 km south of the Trans
Java pipeline and 120 km north of Bali.

Sumatera

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Malacca Strait PSC (Effective Stake 60.49%)

Operator : Kondur Petroleum S.A. (34.46%)
Partner : PT Imbang Tata Alam (26.03%)
OOGC Malacca Limited (32.58%)
Malacca Petroleum Limited (6.93%)
Area : 7,105 km2
EMP has operated the Malacca Strait added reserves at a rate in excess of NET PRODUCTION VOLUME
PSC since 1996, with a 60.49 per cent production, such that 2P recoverable
Oil 5,548 bpd
participating interest, in partnership reserves at the end of 2009 were
with CNOOC as owner of the remainder. higher than reported by the Company Gas 14 mmcfd
The PSC contains generally mature, but in 2004 despite a strong production
productive high watercut wells with performance. Further value creation
the main producing fields being Melibur opportunities lie in well workover and
and Kurau. The historical downtrend production enhancement activities and
in production since 1995 was reversed in development drilling.
in 2007, and in recent years EMP has

GElAm TAC (Effective Stake 100%)

Operator : PT Insani Mitrasani Gelam (100%)
Area : 55.6 km2
Setiti
Jambi PLN
SE Setiti
Sungai Gelam A Field (SG)

Sultan Thaha Rumpeh
Kenali Asam
Airport Subdistrict
Sungai Gelam B Field (SG)
Sungai Gelam D Field (SG)
Gelam TAC
LEGEND
Jal
Jambi Luar Kota Subdistrict

u
BLOCK
rP
ipa
OIL FIELD
TG
I
GAS FIELD
WELL
CUSTOMER
OIL PIPELINE
GAS PIPELINE Sungai Gelam C Field (SG)
PROPOSED GAS PIPELINE
Thailand
Philippines
Malaysia Brunei
Tempino Mestong Subdistrict
Singapore
Gelam TAC
Sumatera
REPUBLIC OF INDONESIA
Timor Leste
INDEX MAP
South Sumatera
Located 20 km south of Jambi upside for the field lies in its identified NET PRODUCTION VOLUME
in Sumatera, the Gelam block is gas resources which we believe can
Oil 492 bpd
characterised by four structural be monetised by negotiation of sales
accumulations in the Jambi sub basin contracts with leading customers Gas 1 mmcfd
covering a total of 55.6 km2. Gelam is including PLN and Indogas, and with
situated within 40 km of the TGI pipeline relatively modest amounts of capital
that carries gas to the Duri oil field and expenditure. Development wells are
via export pipeline to Singapore. The planned for the second half of 2010.
TAC was awarded by Pertamina in 1997
for 20 years and has been producing
modest amounts of oil, however the real

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Bentu PSC (Effective Stake 100%)

Korinci Baru PSC (Effective Stake 100%)
Operator Bentu PSC : K alila (Bentu) Limited (100%)
Operator Korinci Baru PSC : K alila (Korinci Baru) Limited (100%)
Area : 1 ,296 km2
Minas
North East Beruk
Zamrud
Kotabatak Baru Pipeline Beruk
Korinci Baru PSC
Pekanbaru
Minsis Perak Field
West Baru Field
Baru Field Bentu PSC
Desabaru
Korinci Field
Terusan Field
LEGEND
Bentu Field
BLOCK
OIL FIELD
GAS FIELD
WELL Seng Field
PROSPECT
Nikel Timah
LEAD
Tra
PRODUCTION PROCESS PLANT

nsG
asi
CUSTOMER
Segat Field
nd
GAS PIPELINE
oI
nd
PROPOSED GAS PIPELINE

on
es
ia
Besi
Pip
e
lin
e
Thailand
Philippines
Malaysia Brunei
Singapore
Bentu Bentu
KPS &PSC & Korinci
Korinci Baru Baru
KPSPSC
Sumatera
REPUBLIC OF INDONESIA
Timor Leste Sumatera

INDEX MAP
Bentu and Korinci Baru are contiguous Plan of development approvals for both NET PRODUCTION VOLUME
blocks in a combined area of about have been obtained and the smaller
Korinci Baru
1,300 km2 near the city of Pekanbaru, of the two, Korinci, began commercial
Riau Province in Sumatera. To maximise deliveries of gas in May 2007 to PLN, the Oil -
operating synergies, in view of their state-owned electricity utility, from four Gas 16 mmcfd
close proximity, EMP operates the blocks wells in the Baru and West Baru fields.
as a single business unit. Bentu PSC was Bentu PSC is in development with first
originally signed by Sceptre Resources in gas production expected late 2010 from
1993 with EMP acquiring 100 per cent of the Seng and Segat fields, which contain
both blocks in 2006. the largest concentration of gas in the
two blocks. Gas supply contracts have
been signed with PLN and Riau Andalan
Pulp and Paper (RAPP).

Gebang Job PSC (Effective Stake 50%)

Operator : Costa International Group Limited (50%)
Partner : Pertamina (50%)
Area : 980.2 km2
Located 50 km north of Medan, Sumatera, 50 bbls per day of oil and 1 mmcfd of NET PRODUCTION VOLUME
Gebang JOB PSC covers an area of gas. Anggor field has obtained Plan
Oil 24 bpd
980.2 km2 including the offshore field of Development (POD) approval and
of Arbei in production and the discovery development plans include drilling the Gas 1 mmcfd
fields of Anggor and Secanggang drilling ARO-1 gas well, laying pipe and installing
at depths of 40 metres below sea level. a monopod platform (single support)
Under the PSC awarded 1985 for 30 and gas purification equipment, a
years, Pertamina is the designated sulfatreat gas sweetening plant. In
operator assisted by EMP. Commercial addition to Anggor and Secanggang, the
production from Arbei commenced in Gebang Offshore field is also identified
1992 with output today at a rate of as having considerable upside.

23
Tonga PSC (Effective Stake 53.44%)

Operator : PT Mosesa Petroleum (71.25%)
Area : 2,607 km2
Located between Dumai and Sibolga and 3D seismic to delineate various

in Sumatera, the Tonga PSC covers hydrocarbon accumulations within
2,607 km2 and was awarded in 2007 the PSC. Upon confirmation from the
for 30 years. Tonga-1 well has been seismic programme, drilling at Tonga-2
tested at 700 bbls per day, several and Tonga-3 is due to commence in the
additional opportunities identified in second half of 2010. Some 4.5 million
surrounding areas through seismic bbls of 2C oil resources have been
interpretation. The development plan identified in the block.
includes acquisition of further 2D

Kalimantan
Annual Report
Laporan 2009
Tahunan 2009
EMPEMP
25
Semberah TAC (Effective Stake 100%)

Operator : PT Semberani Persada Oil (100%)
Area : 40.5 km2
NET PRODUCTION VOLUME

Oil 852 bpd
Gas 11 mmcfd
EMP is the operator of this TAC which

covers an area of 40.5 km2, and was
awarded to Semco in 1995 for 20 years.
The block covers 6 fields, Sambutan,
Pelarang, Binangat, Karangmumus and
Semberah itself which accounts for the
bulk of production since commencement
in 1994. Semco is entitled to drill to
depths of 2,000 to 4,000 feet and to
date 20 appraisal and development
wells have been drilled with a 70 per
cent commercial success rate. EMP views
this TAC as holding significant growth
potential in oil and gas and current plans
are to finalise acquisition of 3D seismic
and thereafter drill to fully exploit all
booked reserves and materially expand
the reserves base.

Tabulako PSC CBM (Effective Stake 70%)

Operator : PT Artha Widya Persada (100%)
Area : 704.82 km2
In this coal bed methane project, EMP cent ownership. It is within the coal
is the designated operator of the PSC. concession of Arutmin, part of the Bumi
The block, covering narrow strips of Resources group of companies with the
land in south-east Kalimantan, plus concessionaire having drilled several
the northern tip of Pulau Laut covers boreholes for coal mining. There are
an area of 704.82 km2. The concession also 2D seismic lines in the Company’s
was awarded to AWP, a joint venture possession with plans to undertake
between EMP holding 70 per cent further G&G work to prove up resources
and Bumi Resources with 30 per and proceed with development plans.

27
Sangatta-2 PSC CBM (Effective Stake 42%)

Operator : PT Visi Multi Artha (60%)
Area : 909.4 km2
Located 180 km north of Samarinda, markets in North Asia. The PSC has been
this block covers an area of 909.4 km2 awarded to VMA holding a 60 per cent
around Sangatta, the capital of East working interest and PHE (Pertamina)
Kutai Regency in East Kalimantan and at 40 per cent. VMA is owned as to 70
lies within a prodigious coal mining per cent by EMP, the balance owned by
concession operated by Kaltim Prima Bumi Resources. Preliminary evaluation
Coal, a subsidiary of Bumi Resources. indicates about 15 tcf gas with potential
Sangatta-2 is a priority, identified as of some 3-4 tcf recoverable. Development
having high grade potential as a CBM plans include a corehole testing programme
project, with resource assessment to measure reservoir properties, gas
relatively more advanced than for Tabulako. content and permeability in the Lembak
The block is within 50 km of the Bontang Syncline. Given success a pilot CBM
LNG complex, one of the largest export production plant would be installed to
terminals in the world offering significant test long term gas and water production
potential for CBM gas reserves to find in order to evaluate sales options.

28

29

30
Management’s Discussion
and Analysis of the Financial
Condition and Results of
Operations (MD&A)

31
Overview The Company’s average realised gas

The Company derives net sales revenues price was relatively consistent in 2009
from the sale of crude oil, condensate at US$ 2.7/mcf. Given current market
and natural gas in accordance with the conditions, the positive economic
terms of Production Sharing Contracts outlook and strong demand trend,
and Technical Assistance Contracts prices for existing contracts under
relating to the development of 8 discrete re-negotiation as well as relating to
blocks across Java, Sumatera and new contracts, are expected to drive
Kalimantan. the average realised price for 2010 to
significantly higher levels.
Terms relating to oil and condensate
sales Income statement
Net crude and condensate entitlement is
sold to winning bidders in a competitive Net sales
tender process using short-term Total oil and gas production averaged
contracts. Small amounts of sales are 17,813 boepd a 5 per cent increase year
made to Pertamina on occasions when it on year. Gas production was 5 per cent
exercises its rights of first refusal under lower at 59 mmcfd. Net sales in 2009
an applicable TAC. decreased 22 per cent to Rp 1,444 billion
reflecting the significant reduction in oil
Prices are based on the Indonesian prices plus the dip in production volume
Crude Price (ICP), itself a mean of three of gas.
other reference prices. Despite rising
international oil prices during 2009, from Oil sales
US$ 35/bbl in January to US$ 79/bbl in Net oil sales on a working interest basis,
December, the rapid decline from peak contributed 74 per cent in 2009 and
prices during 2008 has impacted the 76.5 per cent in 2008 of total sales. Oil
Company’s average sales price realised revenues were down 25 per cent to
in 2009 which declined year on year by Rp 1,069 billion (2008: Rp 1,421 billion).
over 35% from US$ 96.4/bbl in 2008 to The Malacca Strait block continued
US$ 62.3/bbl. steady growth in output at 5,548 bopd
in 2009 representing 70 per cent of
Terms relating to gas sales total oil production whilst progress in
Gas is sold through direct bilateral the Kangean block generated volume
contracts (B to B) denominated in US of 1,064 bopd, and as such is now a
Dollars with fixed or negotiable price significant contributor in oil as well as
terms, determined based upon volume gas production.
of demand, period of contract, previous
contract price, alternative fuel price and Gas sales
the prevailing exchange rate between Gas revenues decreased 14 per cent to
the Rupiah and the US Dollar. Rp 375 billion (2008: Rp 438 billion).
Contracts completed during the year
at prices ranging from US$ 3.7/mmbtu
through US$ 5.8/mmbtu represent a
positive upward trend for the future.

32 Management’s Discussion and Analysis of the Financial Condition
and Results OF Operations (MD&A)
Segment analysis expenses relating to foreign currency

While domestic sales were down 34 denominated debt, among others,
per cent to Rp 634 billion, export increased from an exchange gain in
commitments were just under 10 per 2008 of Rp 41 billion to a translation
cent lower at Rp 810 billion. cost of Rp 49 billion in 2009. Other
charges included an amount of Rp 43
Cost of sales, operating expenses billion of project expenses written off
The focus in 2009 has been to and other expenses of Rp 75 billion. The
rationalise operations, to cut back post reporting date rights issue (see
substantially on capital expenditure next page) will ensure a substantial
investment in workover and exploration reduction in finance costs for the year
drilling programmes and to pursue cost ahead.
reduction programmes.
Net loss
Operating expenses have been reduced A net loss was incurred for the year of
by 23 per cent to Rp 156 billion. Rp 1,729 billion or Rp 120 per share. This
Production and support costs were up by takes account of several factors:
21 per cent and 25 per cent respectively
mainly due to the need to accelerate Firstly, the substantial reduction in sales
production at Sepanjang, Kangean which revenue of 22 per cent, as prevailing
has been successful with production sales prices were as much as 35% lower
from this field rising from 162 bopd in (primarily oil prices), coupled with an
2008 to 1,064 bopd in 2009. increase of Rp 187 billion in production
costs, reflected in a reduced gross profit
Costs of production in US$/boe terms of Rp 184 billion, compared with Rp 785
were slightly lower from US$ 5.9/boe to billion in 2008. Operating expenses were
US$ 5.7/boe year on year due to higher reduced by 23 per cent to Rp 156 billion.
production volumes, given relatively flat
costs. Secondly, an increase in other charges
of Rp 880 billion, being primarily a full
Annual capital expenditures were more year impact of interest costs (associated
than halved to Rp 608 billion with the with a refinancing completed in the
curtailing of the drilling programme. September 2008), totalling Rp 1,267
billion, an increase of Rp 641 billion, plus
Other charges – net exchange and other costs.
Financing costs doubled in 2009 to
Rp 1,267 billion (2008: Rp 626 billion) Thirdly, an increase in taxes of Rp 260
a reflection of a 12 month period of billion to Rp 315 billion in 2009, relating
incurring interest costs under the to deferred tax assets that we believe to
senior and junior credit agreements be recoverable in the future.
signed in September 2008. Translation

33
Balance Sheet – Financial position The fully subscribed rights issue

As at reporting date, reflecting the generated Rp 4,843 billion in proceeds.
accumulated deficit of Rp 1,862 billion, In accordance with the terms of the offer
total liabilities and equity reduced year prospectus an amount of US$ 250 million
on year from Rp 12,626 billion to and financial costs of US$ 41.3 million
Rp 10,252 billion. has been disbursed in part repayment
of total outstandings under the senior
Net debt increased from Rp 3,883 billion and junior loan facilities. This will
to Rp 4,011 billion in 2009. However, considerably improve the debt to equity
subsequent to the year-end, a successful ratio which had risen from a level of 171
rights issue was completed offering per cent in 2008 to 327 per cent in 2009.
26,183,297,040 shares with par value
Rp 100 per share, priced at Rp 185 per In summary, as specified in the offer
share. Three warrants were attached circular to shareholders, the proceeds of
to every 16 new shares issued under the rights issue will be allocated to fund
the rights issue. Each warrant has a the following:
strike price of Rp 190 per share and can
be exercised during the period from • US$ 100 million to acquire a 10 per
2010 to 2011. A total of 4,909,368,195 cent working interest in block Masela
warrants were issued and may reflect an subject to contract completion with
additional Rp 932.78 billion funds. Inpex, the holder of the PSC;
• US$ 291 million in debt repayments –
already completed;
• US$ 111 million for capital
expenditure and working capital
requirements in the normal course of
business.
Annual Revenues
2009 Value (Rp billion) % YoY (%) Volume (mmboe) % YoY (%)
Oil 1,069.5 74 (25) 1.83 45 13
Gas 374.9 26 (14) 2.23 55 (12)
Total 1,444.4 100 (22) 4.06 100 (2)
Annual Capital Expenditures

Year ended 31 December (US$ in millions)
2009 2008 2007
Annual expenditures on oil and gas 608 1,324 833
properties

34
Safety, Health and Environment

(SHE)

35
How do we implement good SHE Ultimately, people are at the heart SHE Implementation
practices? By having the active of good corporate governance, and Compliance with SHE standards
participation and commitment of all our it is by behaving responsibly that we not only raises the awareness and
employees. achieve sustainable business, comply performance of our employees, but our
with applicable laws, reduce emissions contractors and neighbours as well. In
Together, all of us at EMP are responsible and waste, and use energy and natural 2009 we executed the following 6 SHE
for achieving Company goals in a resources efficiently. We implement programmes: the SHE Management
safe and environmentally responsible good SHE practices through the active Tour, External Audit, Lifting and Rigging
manner. The protection of our participation and commitment of all our Immersion Programme, Contractor SHE
employees, operations, environment and employees. Management System Performance,
neighbours is central to our sustainable Emergency Response Drills including Oil
business strategy, which is why our SHE Management System Pollution Control and Fitness to Work.
business plan includes measurable SHE Overseen by the Board of Directors, the
targets against which we track our corporate SHE Management System Being able to respond swiftly and
performance. Our commitment towards ensures that operational targets effectively to emergencies saves lives.
implementing SHE values is outlined in are attained in a safe, healthy, and In 2009, EMP organised emergency
the Company SHE Policy, and is achieved environmentally-conscious manner. In response drills for operational areas,
through effective leadership and the 2009, each of the Company’s business including training on preventing oil spills
maintenance of safety, health and units began developing their own at sea. Internal SHE training courses
environment excellence in all areas of SHE Management Systems using the throughout the year included First Aid,
Company activities. aforementioned 12 key elements Fire Fighting for SMK Belitung students,
to address unit-specific risks and Tally/Signal Man, CSMS, and JSA, and
To achieve SHE targets, EMP has opportunities. The units were guided an external course was organised on
identified the following 12 key elements: by EMP’s corporate values as well as explosives through BPMIGAS. EMP also
leadership and commitment, risk corporate procedures on JSA, Lifting held safety, health, and environment
management, people training and and Rigging, Industrial Hygiene, the related counseling sessions for
behavior, contractor management, SHE Award, Incident Reporting and employees and community members
facilities design and construction, Investigating, and Emergency and Crisis during national safety month and
operations and maintenance, Management to ensure compliance and to mark Environment Day 2009, and
management of change, information best practice within each business unit. general SHE information is promoted
and documentation, communication, SHE Management System procedures through daily safety talks, monthly
community and stakeholder awareness, are readily accessible through the group meetings, and twice a year
emergency and crisis management, Company’s intranet. through the KILAS magazine.
incidents reporting and investigation,
assessment, assurance and
improvement.

36 Safety, Health and Environment (SHE)
Annual awards are presented to the our drilling sites and operational areas. Each year we nurture good relations
Company divisions and employees In addition to mangrove planting, we with our neighbours through ongoing
with the highest participation in SHE also planted mango and rambutan trees, shared activities. In 2009, we enjoyed
activities, as well as to the best drivers and used compost produced from our aerobics sessions and a community
and winners of SHE games. Awareness organic waste. Through bioremediation walk; the Company distributed cash
sessions on occupational health and phytoremediation initiatives, we crop seedlings to two NGOs, and we
promotion, household chemical safety, reduced the levels of Total Petroleum rolled out an environmental awareness
body fat control, green living, and Hydrocarbon (TPH) to below 1 per cent, programme for 800 students from 20
pollutant-control plants for homes were in accordance with Decree No. 128 of elementary, junior and high schools in
held in EMP’s Jakarta office. In 2009, 2003 of the Ministry of Environmental Merbau and Sungai Apit.
SHE programmes were attended by 500 Affairs, and lowered the levels of heavy
employees and 50 contractors. metals in drilling mud. The implementation and management
of SHE was evaluated for both
The Company provides all employees The Reduce, Reuse, Recycle programme compliance and proper fulfillment of the
with regular scheduled health check-ups drives the recycling of our used work contracts between the Company
and occupational health counseling. and waste oils, and encourages and its business partners. Following
To maintain the physical fitness of resourcefulness in the office. In 2009, BPMIGAS PTK-13 protocol, EMP’s goods
employees, EMP provides sports facilities 80 tonnes of oil were recovered and and services procurement processes
and fitness instructors. In 2009, 450 of fed back into the operational process, were assessed during bidding pre-
our employees volunteered to donate and our employees got maximum qualification.
blood to the Indonesian Red Cross as value from office paper by printing and
part of our annual blood drive initiative. photocopying on both sides. Handy
tips on SHE practices were printed on
To better preserve the environment in bookmarks and distributed throughout
which we live and work, EMP initiated a the Company.
Go Green, Clean and Clear programme,
and a re-greening programme which
included seed cultivation at our
nurseries and the planting 26,000 palm,
sengon, and ketapang seedlings around

37
2009 SHE PERFORMANCE
EMP Bentu- Gebang Gelam Malacca Semberah

Korinci Strait
Indicators Target Actual Actual Actual Actual Actual Actual
Leading Indicators
Gap closure action 75% 56.4% 53.4% 68.75% 77% 67% 60%
Training Hours from Total Man-hours 0.75% 0.68% 1.3% 0.44% 0.80% 0.75% 0.35%
Observation (Near Miss/SSA/SSC) manpower/month 0.5 0.64 3.48 0.01 0.28 0.63 0.04
PROPER Ratings Blue Blue Red Blue Red Blue Blue
Lagging Indicators
FATALITY Rate 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Cases 0 0 0 0 0 0 0
LTI Rate ≤ 0.23 0.04 0.00 0.00 0.00 0.05 0.00
Cases 7 1 0 0 0 1 0
MT Rate ≤ 0.63 0.30 0.00 0.00 0.44 0.25 0.66
Cases 21 8 0 0 1 5 2
TRI rate ≤ 0.85 0.34 0.00 0.00 0.44 0.30 0.66
Cases 28 9 0 0 1 6 2
Spills Incident (> 1 Bbl) 3 Max 0 0 0 0 0 0
Property Damage/Loss (> $ 50 K) 1 Max 0 0 0 0 0 0
SHE Performance The SHE Management System was terms, EMP improved the management
Employee participation in SHE audited internally in April. Following of its liquid waste, exhaust emissions,
observation programmes increased an external audit in August, EMP was and solid waste streams through more
10 per cent year on year, and employees awarded ISO 14001 and OHSAS 18001. efficient bioremediation, recycling of
continued to report identified hazards The Company was awarded Blue used lubricants and oils, and more
in a long-term Company-wide effort PROPER for 2009 from the Ministry of stringent monitoring of emissions and
to improve the Company’s working Environment for our Gebang, Semberah, water used in production processes.
environment. and Malacca Strait operations.
The Company reports zero fatalities, Over time global and national
zero spills, and was above target in benchmarks and definitions change as
lost time incident performance. Four companies move towards sustainability
operational sites – Bentu Korinci, Gelam, and greater efficiency. In 2009, in
Gebang, and Semberah – reported zero accordance with the Government’s
lost time incidents. redefinition of waste water processing

38
Community Relations

39
We build sound relationships with all performing member’s debt. Examples

our stakeholders through community- of businesses being supported by loans
relation programmes, and improve include small-scale trading, retail, and
community welfare through our rubber plantations. By the end of 2009,
empowerment programmes. These Mandiri Sejahtera 01 and Mandiri
programmes are run throughout all Sejahtera 02 held 340 and 120 savings
EMP operations across the archipelago, accounts respectively. In 2009, Bank Riau
and the key to their success is the full Bengkalis agreed to extend a soft loan
participation of the local communities, of Rp 100 million to increase the working
local NGOs, local government, and our capital of Mandiri Sejahtera 01.
company management.
In Semberah, EMP ran a three-day
Livelihood Empowerment workshop on how to improve local
By helping to stimulate local economies, competitiveness through corporate CSR
EMP works to improve local community programmes. Some 30 people from 3
welfare; particularly for low income villages in Muara Badak attended the
households. event. During the session, participants
formed a working group called Rutai
In 2009, in the Malacca Strait, Kondur Kudungga Madani. Members decided
Petroleum S.A. helped launch two on banana products as an entry point
micro-financing institutions: LKM Mandiri to their local economy improvement
Sejahtera 01, in Merbau, and LKM initiative. Rutai Kudungga Madani is
Mandiri Sejahtera 02, in Apit. Initially currently preparing a business strategy
these operated on locally-raised capital and the necessary paperwork for legal
with guidance on development from EMP certification. Two comparative studies
Malacca Strait. The institutions offer related to fish processing and packaging
banking services to those community and product innovation and marketing
members who have previously had no were organised in Bentu and Korinci Baru
access to banking services, particularly to enhance local business competitive
those enterprises with limited working strategy.
capital. Services offered include loans
and savings facilities. Prior to being In 2009, EMP collaborated with the local
eligible for financial assistance, the governments of Gelam and Semberah
local enterprise owners form collective to map local economic and social
business groups. Collateral is not conditions in order to prepare a new
required, but group members are strategy towards strengthening the local
jointly responsible for paying any non- economy.

40 Community relations
Education community health and integrated

EMP’s Malacca Strait educational health care service centers. This monthly
programmes enhance the quality programme, involving 22 intergrated
and competitiveness of local human health care centers, is implemented in 8
resources. In 2009, a series of trainings EMP Malacca Strait Ring 1 villages. Milk
were conducted for local youths and and food, including sago from the local
entrepreneurs; these included a sago- sago business unit, is distributed.
based food production course attended
by 40 community members; skills Environment
development training for 12 rubber In 2009, EMP Semberah planted 5,076
farmers (this was jointly administered trees and plants around its facilities,
by the Karmelasi working group); a including in former drilling areas. Species
language laboratory programme for 12 planted included elephant grass, banana,
local residents; an advanced silk-printing nut and sengon trees, and acacia.
course for 15 participants, and a basic
silk-printing workshop attended by 7 Strategy and Review
community members from Sungai Apit. Through strategy and review sessions,
EMP’s CSR teams discuss and review
EMP has also built 2 excellence centers programme strategies with stakeholders
for the Merbau and Sungai Apit to identify resources, needs and issues
communities. The centers offer non- local communities face; identify how
formal courses, including computer issues can be handled, and determine
and English language skills upgrading how individual potential, independence
programmes. In 2009, there were 301 and competitiveness can be promoted.
participants in the computer course,
and 18 in the English skills upgrade. The EMP’s Bentu Korinci Baru team held 3
education center in Sungai Apit has also workshops during the year: 2 internal
established a profit-sharing computer sessions looking at CSR strategy
services micro business. The ongoing formulation and principles, and 1
education scholarship programme external three-day workshop with
currently supports 18 students, and members from the local government,
saw 3 students successfully graduate in local businesses, and NGOs. These
2009. focused on ways to increase regional
competitiveness in Riau. The EMP
Health Semberah team also conducted a three-
The EMP Malacca Strait CSR team day focus group discussion to better
has been promoting community understand employee and management
health and improving nutrition for perceptions of the Company’s CSR
toddlers in collaboration with the local objectives and activities.

41
EMP’s CSR activities have been commended throughout the year:
1 2 3 4
5 6 7 8
9 10 11
• 23 February 2009 • 22 October 2009 − EMP’s Community Nutrition

Received Best Award from the CSR EMP programs, staff, or associated Program received The Silver
and the Ministry of Social Affairs projects won seven awards at the Award in the Public Health
(pict. 1). KSN 2009 Awards from the Ministry category (pict. 8);
of Social Affairs: − EMP’s PMT Program received The
• 15 August 2009 − Dahrul Hidayat, CSR Coordinator, Silver Award in the Public Health
The following three awards were received The Platinum Award in category (pict. 9);
received at the GKPM 2009 Awards the Field Executor category − LKM Mandiri Sejahtera 01 Merbau
from Coordinating Minister of Public (pict. 5) ; received The Silver Award in the
Welfare and CFCD: − Rumpun Al Baroqah received Micro Finance Institution category
− Dahrul Hidayat, CSR Coordinator, The Gold Award in the Economy/ (pict. 10);
received The Gold Award in the Partnership category (pict. 6); − Working group POS Merbau
CSR Executor category (pict. 2); − Bagus Cahaya Kartika, General received The Silver Award in the
− LKM Mandiri Sejahtera 01 Merbau Manager EMP Malacca Strait, Public Institution category
received The Gold Award in the received The Silver Award in the (pict. 11).
Micro Finance Institution category Management Executor category
(pict. 3); (pict. 7);
− Working group Pos Merbau
received The Silver Award in the
Public Institution category
(pict. 4).

42
Corporate Governance
Report

43
The consistent implementation of 2. Approval to appoint a Public The resolutions of the EGMS were:
good corporate governance principles Accountant Office to audit the
improves long term corporate value, Company’s Financial Statements for Approval of the execution of Right
performance, and sustainable growth. the year ending 31 December 2009 Issue II with Preemptive Rights which
and for other periods within 2009 comprised:
The Board of Commissioners and Board if required, and to determine the • The execution of Right Issue II using
of Directors jointly share responsibility honorarium of the Public Accountant the Company’s reserved shares;
to implement best practices in corporate together with other conditions; • The amendment of the Company’s
governance, as mandated in EMP’s 3. Approval of the composition of capital structure due to the
Articles of Association. In this they are the Board of Commissioners and increased issued and paid up capital
supported through a full committee Board of Directors until the closing following Right Issue II;
structure to ensure the integrity of good of the 5th subsequent GMS after • The updating of the Company’s
corporate governance throughout all their appointment. The current Articles of Association regarding
levels and units of the Company. composition and biographies of the increased issued and paid up
Board members are presented on capital upon the execution of Right
General Meetings of Shareholders page 45 of this report. Shareholders Issue II, and authorising the Board
Ultimate decision making is conducted retain the right to discharge Board of Directors to undertake all actions
by shareholders during the Company’s members prior to the natural necessary to amend the Company’s
annual General Meeting of Shareholders completion of their terms; Articles of Association regarding the
(GMS). An additional Extraordinary 4. Approval for the remuneration and increased issued and paid up capital
General Meetings of Shareholders benefits for members of the Board of Right Issue II.
(EGMS) may be held according to of Commissioners and Board of
Company requirements. In 2009, EMP Directors, and approval to authorise The Board of Commissioners and Board
conducted a GMS on 28 May and an the Board of Commissioners of Directors
EGMS on 31 December. to determine the amount of The Board of Commissioners comprises
remuneration and benefits received 5 members, 2 of whom are independent
The resolutions of the GMS were as by each Commissioner and Director commissioners as stipulated by
follows: to the sum of Rp 1,900,000,000 (one Indonesia Stock Exchange Regulation I-A
1. Approval of the Company’s Annual billion nine hundred million Rupiah) Kep-305/BEJ/07-2004. One independent
Report for the year ending 31 net monthly. commissioner chairs the Company’s
December 2008 and ratification Audit Committee. The Board of
of the Company’s Financial Report Directors comprises 3 members. Board
for the year ending 31 December members serve terms of 5 years and are
2008 and acquit et de charge appointed and relieved through the GMS.
for all members of the Boards of
Commissioners and Directors for
their oversight and management
during the year ending 31 December
2008;

44 corporate governance report
Performance of the Board of Orientation and Training for the

Commissioners and Board of Directors Board of Commissioners and Board of
The Board of Commissioners and Board Directors
of Directors regularly evaluate their Ongoing training is undertaken by Board
collective and individual performances. members to stay informed of current
Individual objectives are established and forthcoming regulations and issues
each year for implementation by relating to the upstream oil and gas
members of the Board of Commissioners sector, as well as developments in the
and Board of Directors. regulatory environment for publicly
listed companies.
Succession Planning
The Board of Commissioners and Responsibility of the Board of
Board of Directors are responsible for Commissioners
ensuring that the Company has the As delineated in the Company’s
appropriate mix of skills and experience. Articles of Association, the Board
The Boards prepare the selection of Commissioners is responsible
criteria and procedures for nominating for overseeing the Company’s
appointments and succession planning risk management, audit controls,
in relation to members of the Boards, compliance, and operations against
taking into account the skills, experience business objectives; as well as to
and expertise required, and currently approve the Company’s Annual Report
represented, and the future direction of and material transactions, and to ensure
the Company. the timely disclosure of information
in line with prevailing regulations. To
Access to Information this end, the Board of Commissioners
All Commissioners and Directors have holds regular joint meetings with the
unrestricted access to the Company’s Board of Directors. In 2009, the Boards
records and information and receive of Commissioners and Directors met
regular detailed financial and formally 4 times. The 2 Boards also
operational reports to enable them to meet informally throughout the year.
carry out their duties. Meeting minutes are recorded, and
issues discussed during the year included
Company regulations, operational
developments, acquisition and strategic
plans, funding, capital expenditure, and
financial and significant issues.

45
Board of Commissioners The composition of the current Board of Suyitno Patmosukismo, Commissioner
Ary S. Hoedaja Commissioners is as follows: Suyitno Patmosukismo was appointed
A. Qoyum Tjandranegara as a Commissioner in May 2007, after
Sulaiman Zuhdi Pane Ary S. Hoedaja, President previously serving as the Company’s
Suyitno Patmosukismo
Nalinkant A. Rathod Commissioner President Commissioner from 2004 until
Ary S. Hoedaja was appointed as 2007. He also serves as an Executive
President Commissioner on 11 May Advisor for the Indonesian Petroleum
2007. He has extensive experience in Association. Previous positions held
Indonesia’s mining industry. He also include Director of Exploration and
serves as President Director of PT Bumi Production for Pertamina, General
Resources Tbk, President Commissioner Director of Oil and Gas for the Ministry
of PT Arutmin Indonesia and PT Kaltim of Energy and Mining, and Chief of the
Prima Coal, and is a Director of PT Bakrie Board of Governors for OPEC.
& Brothers Tbk.
Nalinkant A. Rathod, Commissioner
A. Qoyum Tjandranegara, Independent Nalinkant A. Rathod was appointed
Commissioner as a Commissioner in May 2007. He
A. Qoyum Tjandranegara was appointed currently serves as a Commissioner for
as an Independent Commissioner in June both PT Bumi Resources Tbk and PT
2007 and Chairman of the Company’s Bakrie Telecom Tbk; he is the President
Audit Committee. He has formerly Director of PT Bakrie & Brothers Tbk, and
served as President Director of Perum is a Managing Director for Great Asian
Gas Negara, President Director of Holdings Pte. Ltd and Capital Managers
Perum Gas Negara, Advisor for Asia Ltd.
the Ministry of Energy and Mining,
Secretary to the Pertamina Board of Responsibility of the Board of
Commissioners and as Special Staff to Directors
the Vice President of the Republic of The Board of Directors is responsible
Indonesia for the Energy and Industry for the day to day management of the
sectors. Company and as such has responsibility,
inter alia, for the following:
Sulaiman Zuhdi Pane, Independent • Approving the Company’s risk
Commissioner management strategy, monitoring
Sulaiman Zuhdi Pane was appointed its effectiveness and maintaining a
as an Independent Commissioner in direct and ongoing dialogue with the
March 2008. He currently serves as a Company’s auditors and regulators;
Commissioner and Audit Committee • Implementing corporate strategies
Chairman for PT Bumi Resources Tbk. and recommendations on significant
He has previously held several positions corporate strategic initiatives;
within Pertamina including Vice • Developing and recommending
President of the Exploration Division the Company’s annual budget
and Area General Manager of Pertamina for the Board of Commissioners
South Sumatra. and shareholders for approval,
and management of day to day
operations within the budget;
• Administration and management of
Company accounts and assets;
• Jointly with the Board of
Commissioners, the preparation and
signature of the Company’s annual
report for shareholders;

• Establishing and maintaining a The President Director is appointed by

register of shareholders; the GMS based upon the candidate’s
• Establishing appropriate terms ability to execute these duties
of appointment, performance effectively.
evaluation and succession plans for
the Board of Directors; The Board of Directors convened
• Representing the Company in all formally 8 times in 2009 to discuss
aspects of its activities and for all operational developments, strategic
legal purposes; work plannings, and solutions to
• Maintaining standards for social and significant issues. All meetings follow
ethical behaviour and monitoring predetermined agendas.
compliance with the Company’s
corporate social responsibility The composition of the current Board of Board of Directors
policies and practices. Directors is as follows: Imam P. Agustino
Didit A. Ratam
Amir Balfas
The Selection and Responsibilities of Imam P. Agustino, President Director &
the President Director Chief Executive Officer
The President Director is responsible for: Imam P. Agustino was appointed
• Providing effective leadership President Director on 28 May 2009.
towards achieving business He has 19 years experiences in
objectives; project management and business
• Ensuring that, when all new Board development, and has spent the
members take office, they are fully last decade in senior managerial
briefed on Company strategy and positions with various foreign affiliated
key performance objectives and the institutions within the natural resources
contribution expected from them on sector including Trafalgar House UK and
achieving objectives; Energy Services Pte Ltd.
• Representing the Company’s views to
the public; Didit A. Ratam, Director & Chief
• Directing regular Board of Financial Officer
Directors’ meetings according to Didit A. Ratam was appointed Director
their predetermined agendas and on 28 May 2009. His experience includes
recording minutes of each; serving at the Treasury Department of
• Reviewing the performance of the Mobil South Inc. (Mobil Oil Corp.), Fairfax,
Board of Directors. Virginia, USA, and Financial Advisor at
Gas Venture Adviser, Boston, USA. He
has also served as President Director of
Petroflexx and Finance Director of Prime
Petroservices. He obtained his Economics
and Financial Management Doctorate
from Boston University, USA, in 2000.

47
Amir Balfas, Director & Chief Operating Hertanto, Member

Officer In September 2009, Hertanto was re-
Amir Balfas was appointed a Director appointed as a member of the Audit
of the Company on 28 May 2009 and Committee; he has been serving as a
brings over 28 years of upstream oil and member since October 2005. Hertanto
gas experience to EMP. He spent over 20 has 38 years of experience as an
years at VICO Indonesia East Kalimantan auditor and served as an Independent
Block before joining EMP Malacca Strait Commissioner for PT Adhi Karya
in 2001. (Persero) between 2004 and 2006.
Supporting Governance Committees Toha Abidin, Member

In the implementation of good corporate Toha Abidin was re-appointed as a
governance the Boards of Commissioners member of the Audit Committee in
and Directors are supported by the September 2009. He currently serves as
following committees: President Director of PT Piesta Dinamika
Consult. He has 30 years experience in
Audit Committee the finance and audit sector and has
The Audit Committee oversees all worked with Pieter, Ulways & Partners
matters relating to the integrity and the Ministry of Finance.
of financial statements; makes
recommendations for the appointment In 2009 the Audit Committee held 14
of External Auditors; manages meetings, including 4 meetings with the
operational risks and internal and Board of Commissioners.
external audits, and ensures compliance
with legal and regulatory requirements. The Audit Committee assessed and
The Audit Committee provides the Board reviewed the Consolidated Financial
of Commissioners with expert opinion Statements of 31 December 2009
and submits the results of the Financial along with the notes to the Financial
Report and other financial information Statements. To ascertain the fairness of
published by the Company. the consolidated Financial Statements,
the Audit Committee conducted
Audit Committee Members discussions with the External Auditor
and Internal Auditor regarding the
A. Qoyum Tjandranegara, Chairman holding company and its subsidiaries in
(Independent Commissioner) respect of:
See page 45. • The External Auditor’s review of
audit risk analysis;
• The Company’s internal control
systems and organisational
structure;
• The Company’s accounting policies,
systems and procedures;
• Compliance with capital market and
other regulations;
• Company management policies.

From these the Audit Committee 7. The basis of the Consolidated Approach to Audit Governance
concluded that: Financial Report, except for the The Company implements 3 basic audit
1. The External Auditor has performed Cash Flow Report, is accrued costs. principles:
the general audit of the Company’s The currency used for the Financial • The preparation of fair and accurate
Consolidated Financial Statements as Report is the Indonesian Rupiah, and financial reports;
of 31 December 2009 independently transactions using foreign currency • The use of accounting methods
and objectively; are recorded at the exchange rate at which comply with applicable
2. Internal Audit has carried out its the time. On the balance sheet date, accounting rules and policies; and
function satisfactorily. Further monetary assets and liabilities in • The use of independent External
improvement to the performance of foreign currency reflect the exchange Auditors who serve shareholder
the internal audit system is required rate at the time; interests by ensuring shareholders
following BAPEPAM-LK No. Kep-496/ 8. The consolidated cash flow report are aware of the Company’s
BL/2008, dated 28 November 2008; was prepared using the direct true financial position; and that
3. The management of the holding method by grouping the cash flow developments and practices are
company and its subsidiaries has and operations, investments, and monitored and reviewed accordingly.
applied policies and governance to funding;
a high standard, and has complied 9. The financial position and Risk Management Committees
with capital market and other operational results of the holding The Risk Management Committee
regulations; company and subsidiaries with share comprises 2 sub-committees:
4. Company management has prepared ownership greater than 50 per cent, (i) the Operations Risk Management
the Financial Statements for the either directly or indirectly, are Committee, which comprises the
year ending 31 December 2009 in grouped as a single entity in the Director, General Manager, Head of
accordance with the Accounting financial report; Technical Services, Head of SHE and
Principles of Indonesia and prevailing 10. The holding company and its the Risk Management Unit, and (ii) the
BAPEPAM-LK regulations for the oil subsidiaries have applied the Support Risk Management Committee,
and gas sector; Statement of Financial Accounting which comprises the Director, General
5. Special relationship transactions Standard No. 24 (PSAK 24) and Manager, Head of Business Services,
in the holding company and its Labour Act No. 13 2003 as well as Head of Human Resources, and the Risk
subsidiaries constitute conflict of the Decree of the Minister of Labour Management Unit.
interest transactions according to No. 150 2002 regarding Employee
regulation of BAPEPAM-LK No. IX. Benefits and Fund Reserves by The Risk Management Committees
E-1.item 3c.1. The relationship and using the Projected Unit Credit evaluate current and future risks,
transaction type existed before the method based on Long Term Actuary measure potential risk impact and
Company conducted the general Assumptions; likelihood of occurrence, and ensure that
offering and is explained in the initial 11. The holding company and its appropriate mitigation measures are
offering prospectus; subsidiaries have established in place. The Committees met twice in
6. All transactions with parties with proved oil and gas reserves 2009.
special relationships conducted with based on certification received by
or without interest rate or price have independent consultants Gaffney, In 2009, EMP employees were guided
been disclosed in the Consolidated Cline & Associates (GCA), Sproule by the Company’s Enterprise Risk
Financial Report; International and Malkewiez Hueni Management manual regarding
Associates; the recognition, management, and
12. The compensation packages for the mitigation of risk.
Commissioners and Directors are in
line with standing procedures and
were approved by the GMS.

49
Conflict of Interest Compliance Compliance and Control Committee External Audit

Committee The Compliance and Control Committee The Company’s independent external
In compliance with Bapepam Rule No. oversees that the Company strictly auditor was recommended by the Audit
IX.E.1 regarding Conflict of Interest on implements and complies with Committee, nominated by the Board of
Certain Transactions, which details the regulations and policies imposed by Directors and approved by shareholders
permitted transactions and procedures BPMIGAS regarding internal and quality at the GMS.
to conduct and/or disclose conflicts control, and is responsible for ensuring
of interest, the Company ensures that the potential for conflict of interest The Audit Committee makes
that any potential conflict of interest does not occur. In 2009, the Compliance recommendations concerning the terms
transaction is proposed and approved and Control Committee met twice. of engagement of the External Auditor,
by shareholders in a GMS prior to the Committee members are as follows: and reviews their performance. The
execution of such transaction. External Auditor reports directly to the
Committee Members Replacement Audit Committee.
The Company’s Conflict of Interest Chairman CEO COO/ CFO
Compliance Committee reports directly The Public Accountant Office of
Member SVP & GM -
to the Board of Commissioners and Tjiendradjaja & Handoko Tomo was
KPSA
reviews transactions to ensure proper appointed to externally audit the
compliance with procedures and Member SVP & GM - Company’s Consolidated Financial
applicable regulations. The Committee Bentu Korinci Statements for the year ending 31
met 4 times in 2009. Members of the Member GM Gelam - December 2009.
committee are Suyitno Patmosukismo, Member GM Semberah -
as Chairman, and Imam P. Agustino, Member VP Legal Legal Manager External Auditor’s Statement of
Riri Harahap, Rudianto S. Wibowo, and Independence
Member SVP HR & GA Sr. Manager
Darwanto as members. The Company’s External Auditor has
HRD & Admin.
confirmed their independence and given
Secretary Sr. Manager Control &
The committee also continuously assurance to the Audit Committee that
Internal Compliance
reviews and makes recommendations they have complied with all standards
Control Manager
regarding the compliance of Company promulgated by local and overseas
management systems. regulators and professional bodies.
Remuneration Committee Relationship with External Auditor

The Remuneration Committee is Audit partners and audit firm employees
responsible for ensuring that the are prohibited from serving as Company
remuneration for the Board of employees during their term as audit
Commissioners, Company Management, partner or audit firm employees.
and executives is in accordance with Financial and business relationships
good corporate governance practices. are also prohibited. A minimum of five
The committee comprises A. Qoyum years must elapse before former audit
Tjandranegara as Chairman, and firm employees may be considered for a
Hertanto, Toha Abidin, Raphael Warsita, position within the Company.
and Budi Susanto as members.
The Company reports total remuneration

paid to the Commissioners and Directors
in Note 1 on page 9 of the Financial
Statements of this report.

Restrictions on Non-audit Services by Corporate Secretary The framework for delegation of

the External Auditor The Corporate Secretary provides authority is implemented via (i)
The External Auditor may not conduct legal advice regarding general day- approvals manuals, (ii) delegation of
the following types of non-audit services to-day matters and compliance with authority guidelines, (iii) authorised
for the Company: regulations, including those of the approval lists with specimen signatures,
• Preparation of accounting records capital market. The Corporate Secretary and (iv) other means such as electronic
and Financial Statements; also provides Commissioners and storage and retrieval.
• Valuation services and other Directors with ongoing guidance on
corporate finance activities; corporate governance issues, items No individual may exercise more
• Internal audit services; related to the Company’s Articles authority than that which has been
• Senior staff assignments or of Association, and supervises both delegated to them.
management functions; shareholder and Board meetings.
• Serving as a broker, dealer, or Information Technology Governance
investment adviser; Riri Harahap has served as Corporate Preparations have been completed for
• Delivering legal, litigation or Secretary since 2005 and Vice President the establishment of an IT Steering
actuarial services. Legal since 2006; she brings with her Committee. Committee members will
over 16 years of experience in law. comprise representatives from the IT
Internal Audit Committee unit as well as other relevant operating
The Internal Audit Committee appoints Delegation of Authority units. The committee will ensure that IT
the Head of Internal Audit, and The Board of Directors may delegate investments meet Company objectives
reviews internal audit responsibilities, financial authority to employees who are in terms of efficiency, effectiveness and
budget and staffing, significant responsible for taking actions, signing standardisation.
reports prepared by Internal Audit documents and approving transactions
and management responses thereto. affecting the operation and affairs Approach to Corporate Responsibility
The Audit Committee Chairman meets of the business entity. Delegation of and Sustainability
separately with the Head of Internal authority is managed top down, is The Company aims to manage its
Audit. consistent across the Company, and is business in a way that produces
based on the value of risk associated positive outcomes for all stakeholders
Compliance with Legal and Regulatory with the decision. and maximises economic, social and
Requirements environmental value simultaneously.
The Audit Committee ensures conformity In doing so, the Company accepts that
with applicable legal and regulatory the responsibilities flowing from this
requirements and the Company’s Code go beyond legal obligations and the
of Conduct, and examines material financial bottom line. Transparency, fair
issues raised internally or from the dealing, responsible treatment of staff
external auditor in conjunction with the and customers, and positive links with
Corporate Secretary and Legal Counsel local communities underpin everyday
as required. activities and corporate responsibility
practices.

51
Code of Conduct Market Disclosure Transparency and Disclosure

The Code of Conduct applies to the Board The Company gives all shareholders In addition to the Company’s website,
of Commissioners, Board of Directors, comprehensive and equal access to the following means of communication
and employees without exception. The information about Company activities were used to disclose information to the
Code governs workplace and human and obligations to the broader market, market:
resource practices and is aligned to the and uses its website www.energi-mp.com • Ekonomi Neraca and the Terbit daily
Company’s core values of teamwork, as an information delivery mechanism to newspapers carried announcements
integrity and performance. The Code is shareholders, investors and the public. of the Company’s 2009 Financial
supported with appropriate awareness Report;
training and reviewed periodically by the The Corporate Secretary is responsible • Audited quarterly results were filed
Boards. for ensuring compliance with the with the Indonesian Stock Exchange;
continuous disclosure requirements in • The full Financial Report with
Key suppliers are required to sign the the Listing Rules, and overseeing and co- explanations has been uploaded to
Code of Conduct before becoming coordinating information disclosure to www.energi-mp.com;
working partners. the Indonesian Stock Exchange, analysts, • The Company website carries official
brokers, shareholders, the media and news releases and presentations
Material Transaction the public. Guidelines are provided made to institutional investors and
In compliance with Bapepam Rule No. for staff and Directors to ensure that analysts;
IX.E.2 regarding Material Transaction unpublished information, which may be • The Company conducted one public
and Changes of Core Business, the price sensitive, is not used in an illegal expose on 15 December 2009.
Company ensures that any acquisition or manner.
disposal of shares or assets transactions
that are equal or greater than 10 per cent
of revenue or 20 per cent of equity
are approved by more than half of
the Company’s shareholders through
an Extraordinary General Meeting of
Shareholders.
Employee Relationships
The Company has policies regarding:
• Safe working environments
• Non-discrimination
• Equal employment opportunities
• Competitive terms and conditions of
employment
• The elimination of forced or
compulsory labour

52
Share Information
Share Price
The Company is quoted on the Indonesia Stock Exchange, code ‘ENRG’.
2009 2008
Highest Price Lowest Price Highest Price Lowest Price
Quarter 1 82 61 1,510 1,100
Quarter 2 454 67 1,180 940
Quarter 3 422 309 990 520
Quarter 4 356 172 350 72
Share Performance
Price Volume
(Rupiah) (million)
600 1,600
1,400
500
1,200
400
1,000
300 800
600
200
400
100
200
0 0
J F M A M J J A S O N D
Volume Price

53
Corporate Structure
100%
Energi Mega Persada

Pte Ltd. (Singapore)
0.00002% 100%
EMP Exploration
49.99998%
(Kangean) Ltd. (UK) 40% WI - 50%
Energi Mega Pratama Inc.
(B.V.I)
100% Kangean PSC
Kangean Energy Indonesia 60%

Ltd. (Delaware)
100%
100% Kondur Petroleum S.A.

(Panama) 34.46% WI - 60.49%
RHI Corporation
99.99% Selat Malaka PSC
(Delaware)
PT Imbang Tata Alam 26.03%
(Indonesia)
EMP 99.99%
PT Semberani Persada
WI - 100%
Semberah TAC
Oil (Indonesia)
99.99% WI - 100%
PT Insani Mitrasani
Gelam TAC
Gelam (Indonesia)
99.99% 100% WI - 50%
PT Tunas Harapan Perkasa Costa International Group Ltd.

Gebang JOB PSC
(Indonesia) (B.V.I.)
100%
WI - 100%
Kalila (Bentu) Ltd.
Bentu PSC
(B.V.I.)
100%
WI - 100%
Kalila (Korinci Baru) Ltd.
Korinci Baru PSC
(B.V.I.)
75%
WI - 71.25%
PT Mosesa Petroleum Tonga PSC
70% WI - 100%
PT Artha Widya Persada Tabulako PSC

(Indonesia) CBM
70% WI - 60%
PT Visi Multi Artha Sangatta PSC

(Indonesia) CBM
WI: Working Interest

54
Responsibility for
Financial Reporting
This Annual Report and the accompanying Financial Statements and related
financial information, are the responsibility of the Management of PT Energi Mega
Persada Tbk and have been approved by members of the Board of Directors and
Board of Commissioners whose signatures appear below:
Board of Commissioners Board of Directors
Ary S. Hoedaja Imam P. Agustino

President Commissioner President Director
Qoyum Tjandranegara Didit A. Ratam

Independent Commissioner Director
Sulaiman Zuhdi Pane Amir Balfas

Independent Commissioner Director
Suyitno Patmosukismo
Commissioner
Nalinkant A. Rathod
Commissioner

55
Glossary of Oil and Gas Terms and Units of Measurements
Defined Terms
BPMIGAS ‘Badan Pelaksana Kegiatan Usaha Hulu Minyak Dan Gas Bumi’ or Upstream Executive Body,
the non-profit, Government-owned, operating board that is succeeding Pertamina’s role as
regulator of upstream oil and gas activities under the New Oil and Gas Law.

GCA Gaffney, Cline & Associates (Consultants) Pte Ltd, independent assessors of the Company’s
reserves.
GSPA Gas Sales and Purchase Agreement.
PGN PT Perusahaan Gas Negara (Persero) Tbk.

PLN PT Perusahaan Listrik Negara (Persero).

PROPER The Environmental Compliance Performance Evaluation Program or Program Penilaian
Peringkat Kinerja Perusahaan dalam Pengelolaan lingkungan.

Oil and Gas Terms

1P or proved reserves Represents those quantities of petroleum which, by analysis of geological and engineering
data, can be estimated with reasonable certainty to be commercially recoverable, from a
given date forward, from known reservoirs and under current economic conditions, operating
methods, and Government regulations.

2P or proved plus probable reserves Proved reserves plus those reserves that are unproved reserves which analysis of geological
and engineering data suggests are more likely than not to be recoverable.

3P or proved, probable & possible reserves 2P reserves plus those reserves that are unproved reserves which analysis of geological and
engineering data suggests are less likely to be recoverable than probable reserves.

contingent resources Volumes of recoverable hydrocarbons that are excluded from the reserve category primarily
because the Company has yet to file a definitive POD or agree on GSPA.
crude oil A general term for unrefined petroleum or liquid petroleum.
development well A well that is drilled to exploit the hydrocarbon accumulation defined by an appraisal or
delineation well.
exploration well A well that is designed to test the validity of a seismic interpretation and to confirm the
presence of hydrocarbons in an undrilled formation.
gross reserves Represents the sum of all oil and gas operated reserves not adjusted for the Government take
payable.

56
JOB Joint Operating Body in reference to production sharing contracts.
lead Preliminary interpretation of geological and geophysical information that may or may not lead
to prospects.
lifting cost or production cost The cost incurred to operate and maintain wells and related equipment and facilities for a
given period.
net production Represents the Company’s share of gross production.
net reserves Represents the reserves attributable to the Company’s working interest.

petroleum A complex mixture of naturally occurring hydrocarbon compounds found in rock. Petroleum can
range from solid to gas, but the term is generally used to refer to liquid crude oil.
PSC Production Sharing Contract.
TAC Technical Assistance Contract.
Units of Measurement
bbl barrels.

bbl/d barrels per day.

bboe billion of barrels of oil equivalent.

bbtu billion British Thermal Unit, the standard measure of the heating value of natural gas.

bcf billion cubic feet.

boe barrels of oil equivalent; natural gas is converted to boe using the ratio of one bbls of crude oil
to 5.85 mcf of natural gas.

bopd barrels oil per day.
btu British Thermal Unit, the standard measure of the heating value of natural gas.

mbbl/d thousand barrels per day.

mboe/d thousand barrels of oil equivalent per day.
mbopd thousand barrels oil per day.

mbtu thousand btu.

mcf thousand cubic feet.

mmbbl million barrels.
mmbbl/d million barrels per day.

mmboe million barrels of oil equivalent.

mmbtu million btu.

mmbtud million btu per day.

mmcf million cubic feet.

mmcf/d million cubic feet per day.

mmscfd million standard cubic feet per day.

tcf trillion cubic feet.

57
Financial Report
PT Energi Mega Persada Tbk and Subsidiaries
Consolidated Financial Statements for the Year Ended
31 December 2009 and 2008
and Report of Independent Auditors

58
Contents
Directors’ Statement Letter
Report of Independent Auditors
Consolidated Balance Sheets 1
Consolidated Statements of Income 3
Consolidated Statements of Changes in Equity 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Supplementary Information (Unaudited) 53

PT ENERGI MEGA PERSADA Tbk
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2009
(With Comparative Figures as of December 31, 2008)
(Expressed in thousands of Rupiah, unless otherwise stated)
Notes 2009 2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents 2d,4 49,102,054 230,617,986
Short-term investments 2e,5 1,114,843,945 1,400,072,403
Trade receivables 2f,6 112,356,005 180,414,099
Other receivables
(net of allowance for
doubtful accounts of
Rp7,895,023 in 2009 and
Rp11,856,280 in 2008) 2f,7 303,839,946 509,895,591
Inventories 2g,8 396,485,513 480,703,568
Prepaid expenses and advances 2h,9 33,291,810 57,880,045
Total Current Assets 2,009,919,273 2,859,583,692
NON-CURRENT ASSETS
Restricted funds 2k,10,18,32 525,188,270 848,768,788
Due from related parties 2j,11b 1,204,934,961 1,485,213,693
Deferred tax assets - net 2u,28d 231,146,632 671,967,080
Fixed assets
(net of accumulated
depreciation of Rp9,226,759 in 2009
and Rp8,224,956 in 2008) 2l 896,785 1,872,571
Oil and gas properties
(net of accumulated
depreciation, depletion and
amortization of Rp3,848,832,582 in
2009 and Rp4,304,708,529 in 2008) 2m,2q,12 6,103,986,483 6,583,378,763
Abandonment and site restoration fund 2o,35 120,336,020 137,753,694
Other non-current assets 13 55,983,119 38,084,248
Total Non-Current Assets 8,242,472,270 9,767,038,837
TOTAL ASSETS 10,252,391,543 12,626,622,529
The accompanying notes to consolidated financial statements are an integral part of these consolidated financial statements.
1
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2009
(With Comparative Figures as of December 31, 2008)
Notes 2009 2008
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Notes payable 14 33,631,170 31,415,550
Trade payables 15 638,195,723 433,216,737
Other payables 16 270,714,642 174,133,161
Taxes payable 2u,28a 246,194,230 226,549,871
Accrued expenses 2s,17 719,981,158 573,948,344
Current maturities of long-term loans 18 2,350,087,185 -
Total Current Liabilities 4,258,804,108 1,439,263,663
NON-CURRENT LIABILITIES
Due to related parties 2j,11c 186,473,270 200,401,624
Deferred tax liabilities - net 2u,28d 417,350,478 619,532,341
Employee benefits obligation 2t,30 144,322,621 119,849,071
Abandonment and site restoration
obligations 2o,35 120,336,020 137,753,694
Long-term loans - net of current maturities 18 3,350,680,344 6,363,120,275
Total Non-Current Liabilities 4,219,162,733 7,440,657,005
Total Liabilities 8,477,966,841 8,879,920,668
MINORITY INTEREST IN NET ASSETS

OF CONSOLIDATED SUBSIDIARIES 2b,19a 33,056,142 35,460,962
EQUITY
Share capital
Authorized - 55,000,000,000 shares at
par value of Rp100 (full amount) each
Issued and paid - 14,400,813,372 shares 20 1,440,081,337 1,440,081,337
Additional paid-in capital 2r,21 3,354,749,229 3,354,749,229
Difference in value from restructuring
transactions of entities under
common control 2c,22 (2,634,645,040 ) (2,634,645,040 )
Difference in the change of equity
transaction of a Subsidiary 2i,23 1,262,994,439 1,262,994,439
Translation adjustments 2x 180,809,374 421,231,949
Deficit (1,862,620,779 ) (133,171,015 )
Equity - Net 1,741,368,560 3,711,240,899
TOTAL LIABILITIES AND EQUITY 10,252,391,543 12,626,622,529
2
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 2009
(With Comparative Figures for the Year Ended December 31, 2008)
Notes 2009 2008
NET SALES 2s,24 1,444,368,739 1,859,071,111
COST OF GOODS SOLD 2s,25 1,260,834,863 1,073,370,865
GROSS PROFIT 183,533,876 785,700,246
OPERATING EXPENSES 2s,26 156,432,040 203,144,787
OPERATING INCOME 27,101,836 582,555,459
OTHER INCOME (CHARGES) 2s,27

Overhead cost recovery 16,824,009 28,373,306
Financing charges - net 27a (1,267,284,395 ) (626,128,889 )
Gain (loss) on foreign exchange - net 2x (48,887,453 ) 41,174,023
Under-lift adjustment (26,453,907 ) -
Others - net 27b (118,799,536 ) (7,386,061 )
Other Charges - Net (1,444,601,282 ) (563,967,621 )
INCOME (LOSS) BEFORE

INCOME TAX EXPENSE (1,417,499,446 ) 18,587,838
INCOME TAX EXPENSE 2u,28c,28d

Current 47,824,151 42,220,475
Deferred 267,130,987 13,243,321
Total Income Tax Expense 314,955,138 55,463,796
NET LOSS BEFORE MINORITY

INTEREST IN NET LOSS OF
CONSOLIDATED SUBSIDIARIES (1,732,454,584 ) (36,875,958 )
MINORITY INTEREST IN NET

LOSS OF CONSOLIDATED
SUBSIDIARIES 2b,19b 3,004,820 1,932,674
NET LOSS (1,729,449,764 ) (34,943,284 )
BASIC LOSS PER SHARE

(full amount) 2v,29 (120,09 ) (2,43 )
3
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Difference in
Value from
Restructuring Difference
Transactions in the
of Entities Change of
Additional Under Equity
Paid-in Common Transaction Translation
Note Share Capital Capital Control of a Subsidiary Adjustments Deficit Equity - Net
Balance as of January 1, 2008 1,440,081,337 3,354,749,229 (2,634,645,040 ) 1,262,994,439 27,286,613 (98,227,731 ) 3,352,238,847
Translation adjustments 2x - - - - 393,945,336 - 393,945,336
Net loss for 2008 - - - - - (34,943,284 ) (34,943,284 )
Balance as of December 31, 2008 1,440,081,337 3,354,749,229 (2,634,645,040 ) 1,262,994,439 421,231,949 (133,171,015 ) 3,711,240,899
Translation adjustments 2x - - - - (240,422,575 ) - (240,422,575 )
Net loss for 2009 - - - - - (1,729,449,764 ) (1,729,449,764 )
Balance as of December 31, 2009 1,440,081,337 3,354,749,229 (2,634,645,040 ) 1,262,994,439 180,809,374 (1,862,620,779 ) 1,741,368,560
4
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES

Cash receipts from customers 1,512,426,833 1,993,048,691
Cash paid to suppliers, contractors, employees and
other operational activities (945,321,083 ) (805,038,033 )
Cash generated from operations 567,105,750 1,188,010,658
Financing charges paid (880,954,761 ) (814,947,588 )
Income tax paid (7,441,360 ) (336,593,056 )
Net Cash Provided by (Used in) Operating Activities (321,290,371 ) 36,470,014
CASH FLOWS FROM INVESTING ACTIVITIES

Interest income received 8,565,154 134,192,537
Net decrease (increase) in short-term investments 96,369,579 (676,916,904 )
Acquisition of oil and gas properties (608,874,397 ) (1,324,528,944 )
Decrease (increase) in other non-current assets (17,898,871 ) 44,723,454
Acquisition of fixed assets (126,370 ) (351,268 )
Cash received from sale of fixed assets - 160,000
Net Cash Used in Investing Activities (521,964,905 ) (1,822,721,125 )
CASH FLOWS FROM FINANCING ACTIVITIES

Withdrawal (placement) of restricted fund 205,257,656 (106,278,281 )
Proceeds from long-term loans 238,338,928 1,754,564,829
Decrease (increase) of due from related parties 77,546,699 (101,428,225 )
Decrease of due to related parties (3,851,000 ) (146,007 )
Net Cash Provided by Financing Activities 517,292,283 1,546,712,316
NET DECREASE IN
CASH AND CASH EQUIVALENTS (325,962,993 ) (239,538,795 )
CASH AND CASH EQUIVALENTS

AT BEGINNING OF YEAR 230,617,986 455,088,071
Effect of foreign exchange rate changes 144,447,061 15,068,710
CASH AND CASH EQUIVALENTS

AT END OF YEAR 49,102,054 230,617,986
5
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
a. Establishment and General Information
PT Energi Mega Persada Tbk (the “Company”) was established in the Republic of Indonesia
based on Notarial Deed No. 16 dated October 16, 2001 of H. Rakhmat Syamsul Rizal, S.H.,
Notary in Jakarta. The deed of establishment was approved by the Ministry of Justice and Human
Rights in its decision letter No. C-14507.HT.01.01.TH.2001 dated November 29, 2001 and
published in State Gazette No. 31, Supplement No. 3684 dated April 16, 2002. The Company’s
Articles of Association have been amended several times, the most recent being based on the
Notarial Deed No. 63 dated October 31, 2008 of Humberg Lie, S.H., S.E., MKn., Notary in
Tangerang, in order to conform with Republic of Indonesia Law No. 40 of 2007 concerning
Limited Liability Companies and Regulation of Capital Market and Financial Institution
Supervisory Board (Bapepam-LK) No. IX.J.1 according to the Chairman of Bapepam-LK decision
in his letter No. Kep-179/BL/2008 dated May 14, 2008 concerning the principles of articles of
association for equity listed companies and public companies. The Company’s amended Articles
of Association have been approved by the Ministry of Law and Human Rights of the Republic of
Indonesia in its Decision Letter No. AHU-10395.AH.01.02.year 2009 dated April 1, 2009.
In accordance with Article 3 of the Company’s Articles of Association, the scope of its activities
comprises of, among others: trading, services and mining, and providing business consultant and
management services in the oil and gas industry. Currently, the Company is engaged in
exploration and trading of oil and gas.
The Company’s head office is located at Wisma Mulia, 33rd Floor, Jalan Jenderal Gatot Subroto
No. 42, Jakarta. The Subsidiaries of the Company are engaged in oil and gas exploration, and
their activities are located in Kangean Island, East Java province, Riau, Jambi, North Sumatra,
and East Kalimantan province.
The Company started its commercial operations in February 2003.
b. Public Offering of Shares of the Company
On May 26, 2004, the Company obtained the effective notice from the Chairman of Bapepam-LK
in his letter No. S.1480/PM/2004, for an initial public offering of 2,847,433,500 shares of par value
Rp100 (full amount) per share, which were offered at Rp160 (full amount) per share, totaling
Rp455,589,360,000 (full amount). On June 4, 2004, the shares were listed on the Jakarta Stock
Exchange (now the Indonesia Stock Exchange).
Based on the Extraordinary General Meeting of Shareholders (EGMS) dated December 22, 2005,
the Company effected its first rights issue (Rights Issue I) of 4,909,368,195 shares of nominal
value Rp100 (full amount) per share, which were offered at Rp770 (full amount) per share totaling
Rp3,780,213,510,150 (full amount). The Company received the effective notice from the
Chairman of Bapepam-LK and, on January 25, 2006, listed the shares of the Rights Issue I on the
Jakarta Stock Exchange (now the Indonesia Stock Exchange).
Based on the Extraordinary General Meeting of Shareholders (EGMS) dated December 31, 2009,
the Company effected its seconds right issue (Rights Issue II) of 26,183,297,040 shares of
nominal value Rp100 (full amount) per share, which were offered at Rp185 (full amount) per
share totaling Rp4.843.909.952.400 (full amount). The Company also offered 4,909,368,195
series 1 warrants. The Company received the effective notice from the Chairman of Bapepam-LK
and, on February 16, 2010, listed the shares and warrants of the Rights Issue II on the Indonesia
Stock Exchange.
6
AND SUBSIDIARIES
1. GENERAL (Continued)
c. Structure of the Company and Subsidiaries
The Company has ownership interests of more than 50%, directly and indirectly, in the following
Subsidiaries:
Percentage
Ownership
(Direct and Indirect) Total Assets Before Elimination
(%) Start of (in million Rp)
Commercial Scope of
Subsidiaries Domicile 2009 2008 Operation Activities 2009 2008
RHI Corporation (RHI) Delaware, USA 100 100 1984 Oil and Gas 2,505,996 2,657,366
Kondur Petroleum SA
(KPSA) *) Panama 100 100 1995 Oil and Gas 2,505,996 2,657,366
Malacca Brantas Finance, B.V. Investment
(MBF) The Netherlands 100 100 2005 Company
Energi Mega Persada Finance, B.V. Investment 1,000,745 1,166,280
(EMP Finance) The Netherlands 100 100 - Company
Costa International Group Ltd. British Virgin 249 290
(Costa) *) Islands 100 100 2004 Oil and Gas 232,780 252,562
Kalila (Bentu) Ltd. (Bentu) *) British Virgin
Islands 100 100 - Oil and Gas 905,899 898,584
Kalila (Korinci Baru) Ltd. British Virgin
(Korinci Baru) *) Islands 100 100 2007 Oil and Gas 451,638 467,053
Energy Mega Persada Pte., Ltd. Investment
(EMPPL) Singapore 100 100 - Company 47 55
Tunas Harapan Perkasa Pte., Ltd. Investment
(THPPL) Singapore 100 100 - Company 47 55
Enviroco Company Ltd. (ECL) Seychelles 100 100 2007 Investment
Company 988,413 1,252,794
EMP Holding Singapore Pte Ltd Investment
(EMP HS) Singapore 100 100 2008 Company 3,695,269 4,640,194
PT Imbang Tata Alam (ITA) Indonesia 99,99 99,99 2001 Oil 1,207,227 1,378,911
PT Tunas Harapan Perkasa (THP) Indonesia 99,99 99,99 2005 Oil and Gas 2,519,794 2,744,919
PT Semberani Persada Oil
(Semco) *) Indonesia 99,99 99,99 1996 Oil and Gas 1,663,282 1,880,506
PT Insani Mitrasani Gelam
(IMG) *) Indonesia 99,99 99,99 2004 Oil and Gas 548,094 605,651
PT Mosesa Petroleum (MP) Indonesia 75 75 - Oil and Gas 29,703 180,974
PT Visi Multi Artha (VMA) Indonesia 70 - - Oil and Gas 27,616 -
PT Artha Widya Persada (AWP) Indonesia 70 - - Oil and Gas 34,397 -
Energi Mega Pratama, Inc. British Virgin
(EMP Inc.) Islands 50 50 2003 Oil and Gas 3,241,836 4,193,062
EMP Exploration (Kangean), Ltd.
(EEKL) *) UK 50 50 1987 Oil and Gas 1,076,307 1,409,139
Kangean Energy Indonesia Ltd.
(KEIL) *) Delaware, USA 50 50 1987 Oil and Gas 1,631,184 2,178,272
Allgold (88) Ltd. Seychelles 99,99 99,99 - Investment
Company 0.094 0.094
Freemont Capital Group Ltd. British Virgin Investment
Islands 99,99 99,99 - Company - -
*) Indirect ownership interest through Subsidiaries
All the Subsidiaries of the Company, (except MBF, EMP Finance, THPPL, EMP PL, ECL, EMP
HS, Allgold and FCG) are holders of working interests in the following oil and gas production
blocks directly or indirectly through Production Sharing Contracts (PSC) with Badan Pelaksana
Kegiatan Usaha Hulu Minyak dan Gas Bumi (“BP Migas”) or Technical Assistance Contracts
(TAC) with PT Pertamina (Persero) (“Pertamina”) as follows:
d. Exploration and Exploitation/Development Areas
Exploration Areas
Date of
Acquisition of Accumulated
Exploration Percentage Exploration
Locations Location Permit Owner Permit Due Date Ownership Expenditure
Tonga Block PT Mosesa Petroleum January 17, 2007 January 16, 2037 71.25% 14,787,841
GMB Tabulako
Block PT Artha Widya Persada May 5, 2009 May 4, 2039 100% 9,465,088
GMB Sangatta-II
Block PT Visi Multi Artha May 5, 2009 May 4, 2039 60% 9,175,853
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AND SUBSIDIARIES
Exploitation/Development Areas
Total Production
Quantity Total Accu- Ending

Acquisition Date Percentage of Proven Current mulated Proven
Location Name of Block Owner of Exploration Due Date Ownership Reserves*)**) Period Production Reserves
Bentu Block Kalila (Bentu) Ltd. 2004 2021 100% 23,602 - - 23,602
Semberah Block PT Semberani Persada Oil 1995 2015 100% 10,325 871 3,264 7,061
Korinci Baru Block Kalila (Korinci Baru) Ltd. 2004 2027 100% 2,654 968 2,361 293
Sungai Gelam
Block PT Insani Mitrasani Gelam 1997 2017 100% 1,703 180 952 751
Malacca Straits
Block Kondur Petroleum S.A. 1981 2020 60.49% 248,881 3,348 222,730 26,151
Kangean Block Kangean Energy
Indonesia Ltd. 1990 2030 50% 320,821 2,315 199,929 120,892
Gebang Block Costa International
Group Ltd. 1992 2015 50% 19,525 90 16,445 3,080
*) Units for Proven Reserve and Production in Thousand Barrels of Oil Equivalent (MBOE) (see Supplementary Information).
**)Estimated amount of proven reserves have been certified by an independent petroleum consultant (Supplementary Information).
Tonga Block has a prospective resource of 90 million barrels of oil equivalent (MMBOE)
(unaudited).
e. Boards of Commissioners, Directors, Audit Committee and Employees
The composition of the Company’s Board of Commissioners and Directors as of December 31,
2009 and 2008 was as follows:
2009 2008
Board of Commissioners:
President Commissioner Ari Saptari Hudaja Ari Saptari Hudaja
Commissioner Suyitno Patmosukismo Suyitno Patmosukismo
Commissioner Nalinkant Amratlal Rathod Nalinkant Amratlal Rathod
Independent Commissioner A. Qoyum Tjandranegara A. Qoyum Tjandranegara
Independent Commissioner Sulaiman Zuhdi Pane Sulaiman Zuhdi Pane
Directors:
President Director Imam Pria Agustino Christian Victor Ponto
Director Didit Agripinanto Ratam Yuli Soedargo
Director Amir Balfas Imam Pria Agustino
The composition of the Board of Commissioners and Directors as of December 31, 2009 was
based on the decision of the General Meeting of Shareholders (GMS) on May 28, 2009, as stated
in the Minutes of the GMS Deed No. 78 dated May 28, 2009 of Robert Purba, S.H., Notary in
Jakarta.
The composition of the Board of Commissioners as of December 31, 2008 was based on the
decision of the EGMS on March 14, 2008, as stated in the Minutes of the EGMS Deed No. 44
dated March 14, 2008 of Robert Purba, S.H., Notary in Jakarta.
The composition of the Board of Directors as of December 31, 2008 was based on the decision of
the EGMS on April 19, 2007, as stated in the Minutes of the Annual GMS Deed No. 48 dated
April 20, 2007 of Humberg Lie, S.H., S.E., MKn., Notary in Tangerang.
8
AND SUBSIDIARIES
The composition of the Audit Committee as of December 31, 2009, based on the Minutes of
Meeting of the Board of Commissioners dated September 1, 2009, was as follows:
Chairman : A.Qoyum Tjandranegara

Member : Hertanto
Member : Toha Abidin
Total remuneration paid to the Commissioners and Directors of the Company for the years ended
December 31, 2009 and 2008 amounted to Rp21.56 billion and Rp25.37 billion, respectively.
As of December 31, 2009 and 2008, the Company and Subsidiaries had approximately 524 and
526 employees, respectively (unaudited).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared in accordance with the generally accepted
accounting principles and practices in Indonesia which are covered by the Statements of Financial
Accounting Standards (PSAK) issued by the Indonesian Institute of Accountants (IAI) and Regulations
and Guidelines for Financial Report Presentation set out by Bapepam-LK. The accounting principles
applied consistently in the preparation of the consolidated financial statements were as follows:
a. Basis of Preparation of the Consolidated Financial Statements
The consolidated financial statements have been prepared on a historical cost basis except for
certain accounts that are measured on the basis described in the related accounting policies.
The consolidated statements of cash flows are prepared using the direct method, cash flows
being classified into operating, investing and financing activities.
The reporting currency used in the preparation of the consolidated financial statements is
Indonesian Rupiah (“Rp”).
b. Principles of Consolidation
The consolidated financial statements include all Subsidiaries that are controlled by the Company.
Control is presumed to exist when the Company owns, directly or indirectly (through
Subsidiaries), more than 50% of the voting rights of the Subsidiaries. Even when the Company
owns 50% or less of the voting rights, control exists when one of the following conditions is met:
(1) having more than 50% of the voting rights by virtue of an agreement with other investors;
(2) having the right to govern the financial and operating policies of the Subsidiaries under the
articles of association or an agreement;
(3) ability to appoint or remove the majority of the members of the Subsidiaries’ management;
(4) ability to control the majority of votes at meetings of management.
9
AND SUBSIDIARIES
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
The minority shareholders’ proportionate share in the equity of the consolidated subsidiaries is
presented under “Minority Interest in Net Assets of Consolidated Subsidiaries” on the
consolidated balance sheets, while the minority shareholders’ proportionate share in the net
income or loss of consolidated subsidiaries is presented under “Minority Interest in Net Income or
Loss of Consolidated Subsidiaries” in the consolidated statements of income.
All significant inter-company transactions and balances have been eliminated.
The financial statements of the Subsidiaries that are involved in joint operations with other
venturers under a contractual arrangement are consolidated using the proportionate consolidation
method from the commencement date of joint operations in accordance with
PSAK No. 12, “Financial Reporting of Interests in Jointly Controlled Operation and Assets.” The
contractual arrangement may identify one venturer as the operator or the manager of the joint
venture. The operator does not control the joint venture, but acts within the financial and operating
policies that have been agreed by the venturers in accordance with the contractual arrangement.
c. Business Acquisitions
Acquisitions are accounted for using the purchase method in accordance with the requirements of
PSAK No. 22, “Business Combination.” On acquisition date, the assets and liabilities of a
Subsidiary are measured at their fair values. Any excess of the cost of acquisition over the fair
values of the identifiable net assets acquired is recorded in oil and gas properties and amortized
using the unit of production method within the period of the PSC or TAC.
When the cost of acquisition is less than the interest in the fair values of the identifiable assets
and liabilities acquired as at the date of acquisition (discount on acquisition), fair values of non-
monetary assets are reduced proportionately until all the excess is eliminated. The remaining
excess, after reducing the fair values of non-monetary assets acquired, is recognized as negative
goodwill, treated as deferred revenue, and recognized as revenue on a straight-line basis over
twenty (20) years.
Acquisitions of subsidiaries that represent a restructuring transaction of entities under common

control are accounted for in accordance with PSAK No. 38 (Revised 2004), “Accounting for
Restructuring of Entities Under Common Control.” Based on this standard, acquisition of a
Subsidiary is accounted for using the pooling of interest method, wherein assets and liabilities of a
Subsidiary are recorded at their book values. The difference between the transfer price and the
Company’s interest in the subsidiary’s book values, if any, is recorded as “Difference in Value
from Restructuring Transactions of Entities Under Common Control” and presented as a separate
component in the Company’s equity. The balance of “Difference in Value from Restructuring
Transactions of Entities Under Common Control” can be realized to gain or loss from the time the
common control no longer exists between the entities that entered into the transaction.
d. Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and in banks, and time deposits with
maturities of three months or less and not pledged as collateral nor restricted in use.
e. Investments in Securities
Investments in securities classified as available for sale are stated at market value.
10
AND SUBSIDIARIES
f. Receivables
Trade receivables are recognized and carried at original invoice amount less an allowance for
doubtful accounts. The Company provides an allowance for doubtful accounts based on the
assessment of the Company’s management on the collectability of the accounts at the end of the
year. The writing-off of receivables is based on management’s judgment on the recoverability of
the accounts and for the recovery of allowance for doubtful accounts.
g. Inventories
Effective January 1, 2009, the Company and Subsidiaries applied PSAK No.14 (Revised 2008),
“Inventories” (“Revised PSAK 14”), which supersedes PSAK No. 14 (1994). The adoption of
Revised PSAK 14 had no significant impact on the consolidated financial statements.
Inventories such as spare-parts, chemicals and fuel are classified into capital and non-capital
inventories. Capital inventories that are consumed or used as components of construction are
capitalized as assets. Non-capital inventories represent inventories being consumed for the
purpose of repair and maintenance of assets or used for operations. The costs of the consumed
non-capital inventories are charged when used.
Inventories purchased under the terms of the PSC or TAC become the property of the
government of Republic of Indonesia, as represented by BP Migas or Pertamina, when the
inventories are landed in Indonesia.
Inventories are valued at the lower of cost or net realizable value. Cost is determined using the
weighted average method. Allowance for inventory obsolescence is provided based on a review
of the condition of inventories at the end of the year.
h. Prepaid Expenses
Prepaid expenses are amortized over the period benefited using the straight-line method.
i. Change of Equity in a Subsidiary
Changes in the value of the investment due to changes in the equity of a Subsidiary arising from
capital transactions of such Subsidiary with other parties are recognized in equity as “Difference
in the Change of Equity Transaction of a Subsidiary,” and recognized as income or expense in the
period the investment is disposed of under PSAK No. 40, “Accounting for a Change in the Value
of Equity of a Subsidiary/Associate Company.”
j. Transactions with Related Parties
The Company and Subsidiaries have transactions with certain parties, which have a related party
relationship, as defined in PSAK No. 7, “Related Party Disclosures.”
All significant transactions with related parties, whether or not conducted under the same terms
and conditions as those with third parties, are disclosed in the notes to consolidated financial
statements.
k. Restricted Funds
Time deposits and placements that are restricted in use for more than one year from balance
sheet date are presented under non-current assets.
11
AND SUBSIDIARIES
l. Fixed Assets
The Company and Subsidiaries applied PSAK No. 16 (Revised 2007), “Fixed Assets” (“Revised
PSAK 16”). Based on Revised PSAK 16, an entity shall choose between the cost model and
revaluation model as the accounting policy for its fixed assets measurement. The Company and
Subsidiaries have chosen the cost model as the accounting policy for their fixed assets
measurement.
Depreciation is computed using the straight-line method over the estimated useful lives of the
assets as follows:
Years
Machinery and equipment 4
Vehicle and office equipment 4
The assets’ useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at
each balance sheet date.
Construction-in-progress is stated at cost and presented as part of “Fixed Assets” in the

consolidated balance sheets, which includes borrowing costs incurred to finance the construction
during the period of development. The accumulated costs will be reclassified to the appropriate
fixed assets account when construction is completed and ready for their intended use.
The cost of repairs and maintenance is charged to the consolidated statements of income as
incurred; replacement or major inspection costs are capitalized when incurred if it is probable that
future economic benefits associated with the item will flow to the Company and Subsidiaries, and
the cost of the item can be measured reliably. An item of fixed asset is derecognized upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset is included in the consolidated statements of income in
the year the asset is derecognized.
m. Oil and Gas Properties
The Subsidiaries adopted the full cost method of accounting in recording oil and gas properties.
Accordingly, all costs associated with acquisition, exploration and development of oil and gas
reserves, including directly related overhead costs, are capitalized. All costs arising from
production activities are recorded at the time they are incurred.
Under the full cost method, a cost center is used to “pool” costs to be later matched with revenues
generated from the cost center’s operations. The Company considers a country as a single cost
center in accordance with PSAK No. 29, “Accounting for Oil and Gas Industry” and, therefore,
cost centers are established on a country-by-country basis.
The capitalized costs are subject to a “ceiling test” which basically limits such costs to the
aggregate of: (1) the “estimated present value,” discounted at a 10% interest rate of future net
revenues from estimated future production based on current economic and operating conditions;
(2) the cost of unproven reserves and major development projects not being amortized; and (3)
the lower of cost or estimated fair value of unproven properties included in cost being depreciated
and amortized. Any excess over the cost is charged to expense and disclosed during the year.
12
AND SUBSIDIARIES
All capitalized costs relating to oil and gas properties, including the estimated future costs of
developing proven reserves, are depreciated and amortized using the unit of production method
based on the total estimated proven reserves. Investments in unproven properties and major
development projects are not amortized until indication of proven reserves associated with the
projects can be determined or until impairment occurs.
The Subsidiaries have no ownership interest in the producing assets nor in the oil and gas
reserves, but rather have the right to operate the assets and receive a share of production and/or
revenues from the sale of oil and gas in accordance with the PSC or TAC agreements.
Sales of proven and unproven properties are accounted for as adjustments of capitalized costs
with no gain or loss recognized directly, unless such adjustments would significantly change the
relationship between capitalized costs and proven reserves of oil and gas, in which case, the gain
or loss is recognized in the consolidated statement of income.
Construction-in-progress is stated at cost and presented as part of “Oil and Gas Properties” in the
consolidated balance sheets. The accumulated costs will be reclassified to the appropriate oil and
gas properties account when construction is completed and ready for their intended use.
n. Leases
The Company and Subsidiaries applied PSAK No. 30 (Revised 2007), “Leases” (“Revised
PSAK 30”). Under Revised PSAK 30, leases that transfer substantially all the risks and benefits
incidental to ownership of the leased item to the lessee are classified as finance leases. Finance
leases are capitalized at the inception of the lease at the fair value of the leased assets or at the
present value of the minimum lease payments, if the present value is lower than the fair value.
Minimum lease payments are apportioned between finance charges and reduction of the lease
liability so as to achieve a constant period rate of interest on the remaining balance of the liability.
Finance charges are recorded in the consolidated statements of income. Leased assets held by
the lessee under finance leases are included in fixed assets and depreciated over the estimated
useful life of the assets or the lease term, whichever is shorter, if there is no reasonable certainty
that lessee will obtain ownership by the end of the lease term.
Leases that do not transfer substantially all the risks and benefits incidental to ownership of the
leased item are classified as operating leases.
o. Abandonment and Site Restoration Obligation
The Subsidiaries recognize their obligation for future removal and restoration of oil and gas
production facilities, wells, pipelines and related assets in accordance with the provision in the
PSC or TAC. The Subsidiaries are also required to provide funding for any abandonment and site
restoration program established.
The method for recognition of the obligations and expense adopted by the Subsidiaries are
gradually substantially based on PSAK No.16 (Revised 2007).
In most instances, the removal of these assets will occur many years in the future or near the end
of PSC or TAC period. The estimate of future removal costs therefore requires management to
make judgments regarding the timing of removal, the extent of restoration activities required and
future removal technologies. Such estimates are reviewed on an annual basis and adjusted each
year as required.
13
AND SUBSIDIARIES
p. Impairment of Asset Values
Asset values are reviewed for any impairment and possible write down to fair value whenever
events or changes in circumstances indicate that the carrying value may not be recoverable.
Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is
recognized in the current year consolidated statement of income. Recoverable amount is the
higher of an asset’s net selling price and its value in use.
q. Capitalization of Borrowing Cost
In accordance with PSAK No. 26 (Revised 1997), “Borrowing Cost”, interest cost, foreign
exchange differences and other costs incurred from borrowings obtained to finance the
construction or installation of major facilities are capitalized. Capitalization of these borrowing
costs ceases when the acquisition, construction or installation activities are substantially
completed and the assets are ready for their intended use.
r. Shares Issuance Costs
Based on the Bapepam’s Decision Letter No. KEP-06/PM/2000 dated March 13, 2000, all costs
incurred in relation to the Initial Public Offering and Rights Issue are presented as “Additional
Paid-in Capital” in equity.
s. Revenue and Expense Recognition
Revenue from crude oil and/or gas is recognized on the basis of the entity’s interest in a
producing field (“entitlement” method) when the crude oil and/or gas is delivered and title has
passed to the customer. Revenue earned under a PSC or TAC is recognized on a net
entitlements basis according to the terms of the PSC or TAC.
Expenses and production costs are recognized when incurred. Production cost involves lifting of
oil and gas to the surface of earth and gathering, treating, field processing and field storage of the
oil and gas until delivery.
Production costs of un-lifted oil are deferred, matching the costs against revenues.
t. Employee Benefits
The Company and Subsidiaries adopted PSAK No. 24 (Revised 2004), “Employee Benefits”
(“Revised PSAK 24”) to determine their employee benefits obligation under Labor Law
No. 13/2003 dated March 25, 2003 (“the Law”). Under Revised PSAK 24, the cost of employee
benefits based on the Law is determined using the “Projected Unit Credit” actuarial valuation
method. Actuarial gains or losses are recognized as income or expense when the net cumulative
unrecognized actuarial gains and losses at the end of the previous reporting year exceeded the
higher of 10% of the defined benefit obligation and 10% of the fair value of plan assets at that
date. These gains or losses are recognized on a straight-line basis over the expected average
remaining working lives of the employees. Past-service cost arising from the introduction of a
defined benefit plan or changes in the benefits obligation of an existing plan, are required to be
amortized over the period until the benefits concerned become vested.
The Company and Subsidiaries provide employee benefits for their employees pursuant to the
terms of the Employment Work Contract/Company and Subsidiaries’ Policy. The Subsidiaries
KEIL, KPSA and ITA also provide employee benefits from defined contribution pension plans. The
contribution charged to the Subsidiaries is recognized as expense in the current period.
14
AND SUBSIDIARIES
u. Income Taxes
Current tax expense is provided based on the estimated taxable income for the year. Current tax
expense of Subsidiaries that are domiciled and registered as tax subjects in other countries, is
determined based on the taxable income for the year computed using prevailing tax rates in the
relevant countries.
Current tax expense of the Subsidiaries that are engaged in exploration and production of oil and
gas under a PSC or TAC is determined based on the taxable income in the related year using the
prevailing tax rates at the time the PSC or TAC was entered into.
Deferred tax assets and liabilities are recognized for temporary differences between the financial
and the tax bases of assets and liabilities at each reporting date. Deferred tax assets are
recognized for all deductible temporary differences, to the extent it is probable that future taxable
profit will be available against which the deductible temporary differences can be utilized.
Deferred tax liabilities are recognized for all taxable temporary differences. Future tax benefits,
such as the carry-forward of unused tax losses, are also recognized to the extent that realization
of such benefits is probable.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realized or the liability settled based on tax rates (and tax laws) that have
been enacted or substantively enacted at the balance sheet date.
Amendments to tax obligations are recorded when an assessment is received and/or if objected
to and/or appealed against by the Company and Subsidiaries, when the result of the objection
and/or appeal is determined.
v. Earnings per Share
Basic earnings per share is computed by dividing net income by the weighted-average number of
common shares outstanding during the year.
Diluted earnings per share is computed by dividing net income by the weighted average number
of shares outstanding as adjusted for the effects of all potential dilution.
w. Segment Information
Segment information is presented based on PSAK No. 5 (Revised 2000), “Segment Reporting.”
The Company and Subsidiaries’ primary reporting segment information is based on business
segment, while its secondary reporting segment information is based on geographical segment.
x. Foreign Currency Transactions and Translation
Transactions in currencies other than Indonesian Rupiah are recorded at the prevailing rates of
exchange in effect on the dates of the transactions.
As of balance sheet date, all foreign currency monetary assets and liabilities are translated at the
middle exchange rates quoted by Bank Indonesia on that date. The resulting net foreign
exchange gains or losses are recognized in the current year’s consolidated statement of income.
15
AND SUBSIDIARIES
If the books of accounts of the Subsidiaries are maintained in United States Dollar (“USD”), for the
presentation of consolidation financial statements purposes, assets and liabilities of the
Subsidiaries at balance sheet date are translated into Indonesian Rupiah using the middle rates
stated by Bank Indonesia, while revenues and expenses are translated at the average rates of
exchange. Resulting translation adjustments are shown as part of equity as “Translation
Adjustments.” The exchange rates used as of December 31, 2009 and 2008 were as follows:
2009 2008
(full amount) (full amount)
Currency
United States Dollar 1/Rupiah 9,400 10,950
European Euro 1/Rupiah 13,510 15,433
y. Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted

accounting principles in Indonesia requires management to make estimations and assumptions
that affect amounts reported therein. Due to the inherent uncertainty in making of estimates,
actual results reported in the future periods may be based on amounts that differ from those
estimates.
3. ACQUISITIONS AND ESTABLISHMENT OF SUBSIDIARIES
a. PT Mosesa Petroleum
On April 1, 2008, the Company signed a Conditional Sales and Purchase Agreement (CSPA) with
PT Masagena Agung (MGA) whereby it was agreed that the Company will acquire a 75%
ownership interest in PT Mosesa Petroleum (MP) owned by MGA at an agreed price of
USD11,800,000.
Both parties agreed that the agreement will become effective upon the completion of either one of
the following conditions:
(i) MGA and MP have held General Meeting of Shareholders (GMS) to obtain the approval of the
sale and purchase of the shares, and;
(ii) The Company has announced the plan of the acquisition in at least one nationally circulated
newspaper before MP’s GMS according to Limited Liability Company Law.
The acquisition of MP became effective on June 11, 2008.
MP is the owner of 71.25% working interest in Tonga PSC Block located in North Sumatra for a
term of thirty (30) years from the time the contract was signed with BP Migas dated January 16,
2007.
The acquisition of MP was recorded using the purchase method. Net assets of MP were
measured at their fair values, any excess of the cost of acquisition over the fair values of the
identifiable assets attributed to oil and gas properties.
16
AND SUBSIDIARIES
3. ACQUISITIONS AND ESTABLISHMENT OF SUBSIDIARIES (Continued)
Fair value of net assets at acqusition date were as follows:
Rp
Cash in bank 326,350
Restricted funds 17,881,242
Other receivables 3,218,503
Oil and gas properties 156,359,805
Prepaid taxes 4,964
Short-term loan (26,492,346 )
Accrued expenses (2,912,999 )
Taxes payable (65,354 )
Long-term loan (1,842,829 )
Net 146,477,336
b. PT Visi Multi Artha
On January 21, 2009, PT Visi Multi Artha (VMA) was established based on Notarial Deed No. 8
of Beni Aguselyanto S.H., with authorized capital amounting to Rp4,000,000 consisting of
4,000 shares with par value of Rp1,000 per share, and having fully paid-up capital of
Rp1,000,000. On April 15, 2009, the Company acquired 70% ownership of VMA, consisting of
700 shares amounting to Rp700,000.
VMA was established to engage in services, construction, trading, industry, printing, land
transportation, overhaul, agriculture and mining.
c. PT Artha Widya Persada
On January 21, 2009, PT Artha Widya Persada (AWP) was established based on Notarial Deed
No. 12 of Beni Aguselyanto S.H., with authorized capital amounting to Rp4,000,000 consisting of
4,000 shares with par value of Rp1,000 per share, and having fully paid-up capital of
Rp1,000,000. On April 15, 2009, the Company acquired 70% ownership of AWP, consisting of
700 shares amounting to Rp700,000.
AWP was established to engage in services, construction, trading, industry, printing, land
transportation, overhaul, agriculture and mining.
4. CASH AND CASH EQUIVALENTS
2009 2008
Cash on hand 573,052 489,815
Cash in banks
Indonesian Rupiah
Citibank N.A. 9,088,143 4,220,641
PT Bank Mandiri (Persero) Tbk 5,455,650 59,163
PT Bank Internasional Indonesia Tbk 727,766 1,166,742
Others (below Rp1 billion each) 1,283,582 869,143
17
AND SUBSIDIARIES
4. CASH AND CASH EQUIVALENTS (Continued)
2009 2008
United States Dollar
Citibank N.A. 24,995,271 45,749,002
PT Bank Mega Tbk 3,703,476 6,925,386
PT Bank Internasional Indonesia Tbk 923,623 7,626,758
PT Bank Negara Indonesia (Persero) Tbk 528,649 32,745,934
Credit Suisse 57 58,273,322
Others (below Rp1 billion each) 132,861 410,734
Euro
Fortis Bank 353,717 28,746
Total Cash in Banks 47,192,795 158,075,571

Cash equivalents
Time deposits
Indonesian Rupiah
Citibank N.A. - 18,500,000
United States Dollar

PT Bank Internasional Indonesia Tbk 1,336,207 1,520,633
Citibank N.A. - 41,062,500
PT Bank Negara Indonesia (Persero) Tbk - 10,969,467
Total Cash Equivalents 1,336,207 72,052,600
Total 49,102,054 230,617,986
Time deposits earned interest at the following annual rates:
2009 2008
United States Dollar 1.50% - 4.00% 2.25% - 3.75%
Indonesian Rupiah 7.00% - 12.50% 7.25% - 13.75%
5. SHORT-TERM INVESTMENTS
The fund placements of Subsidiaries ECL and KPSA with Riseley Management Ltd. (RML) acting as
fund manager, is the placement of securities held to maturity. Funds placed by ECL and KPSA with
RML amounted to USD104 million and USD15 million, respectively. Expected increases in net asset
values for each year are estimated at 7 percent and 9 percent plus LIBOR (London Interbank Offered
Rate) for ECL and KPSA, respectively. For KPSA, the fund placement in RML will be due in five (5)
years from September 15, 2008. For ECL, the fund placement will be due five (5) days after the
submission of a written request for investment withdrawals from the investor to the fund manager, or
on June 30, 2010.
18
AND SUBSIDIARIES
6. TRADE RECEIVABLES
a. By Customer - Third Parties
2009 2008
Local customers
PT Pertamina (Persero) 34,854,810 75,073,184
PT Perusahaan Listrik Negara (Persero) 5,813,437 26,405,566
PT Perusahaan Gas Negara (Persero) Tbk 3,376,806 49,111,769
PT Petrokimia Gresik (Persero) 3,165,106 9,210,777
PT Riau Andalan Pulp & Paper 1,334,175 5,396,446
Foreign customer
Well Pacific Energy Pte., Ltd. 53,274,364 -
Itochu Petroleum Co (S) Pte., Ltd. 10,286,848 -
Petro Diamond Pte., Ltd. 250,459 15,216,357
Total 112,356,005 180,414,099
b. By Age Category
2009 2008
Up to 30 days 107,076,358 77,170,271
Over 31 - 60 days 4,944,130 50,500,895
Over 60 days 335,517 52,742,933
Total 112,356,005 180,414,099
All trade receivables are denominated in United States Dollar. The Subsidiaries did not provide any
allowance for doubtful accounts as management believes that the trade receivables are fully
collectible.
Receivables from Subsidiaries as of December 31, 2009 and 2008 are pledged as collateral for the
long-term loans (Note 18).
7. OTHER RECEIVABLES
a. This account consists of receivables from:
2009 2008
BP Migas 176,409,664 294,717,670
Suppliers 58,990,737 71,525,737
Employees 16,296,543 16,660,677
Others (below Rp10 billion each) 60,038,025 138,847,787
Total 311,734,969 521,751,871

Less allowance for doubtful accounts (7,895,023 ) (11,856,280 )
Net 303,839,946 509,895,591
19
AND SUBSIDIARIES
7. OTHER RECEIVABLES (Continued)
b. Mutation of allowance for doubtful accounts is as follows :
2009 2008
Beginning balance 11,856,280 19,811
Allowance for doubtful accounts 312,486 11,836,469
Revision on allowance for doubtful accounts (4,273,743 ) -
Ending Balance 7,895,023 11,856,280
Receivables from BP Migas represent Subsidiaries’ receivables consisting of VAT that are
reimbursable from BP Migas and underlifting for oil sales which is in accordance with the PSC or
TAC. The balances as of December 31, 2009 and 2008 were Rp176,409,664 and nil, and
Rp216,539,825 and Rp78,177,845, respectively.
Receivables from suppliers represent Subsidiaries’ receivables for the exploration and exploitation
activities carried out by suppliers, which were first funded by the Subsidiaries.
Based on the results of the examination of each receivable, the Company’s management believes
that the allowance for doubtful accounts as of December 31, 2009 and 2008 was adequate to cover
the possible losses on other receivables.
8. INVENTORIES
2009 2008
Spare-parts 385,845,039 457,066,221
Fuel 1,225,336 9,339,655
Chemicals and others 9,415,138 14,297,692
Total 396,485,513 480,703,568
Inventories are covered by insurance against losses from fire and other risks under blanket policies
insurance package with Oil and Gas Properties (Note 12). Management believes the insurance
coverage is adequate to cover possible losses from such risks.
9. PREPAID EXPENSES AND ADVANCES
2009 2008
Prepaid expenses
Rental 2,978,411 4,173,147
Insurance 1,400,538 1,970,311
Service charge - 388,710
Advances
Project 21,460,033 17,090,143
Others 7,452,828 34,257,734
Total 33,291,810 57,880,045
20
AND SUBSIDIARIES
10. RESTRICTED FUNDS
2009 2008
PT Bank Mega Tbk 323,495,597 349,513,050
Credit Suisse AG, Singapore Branch (CS) 155,795,616 214,339,628
PT Bank Mandiri (Persero) Tbk 38,765,443 47,865,751
The Hongkong and Shanghai Banking Corporation Ltd.,
Singapore Branch 7,131,614 86,037,365
Societe Generale, Hongkong Branch - 151,012,994
Total 525,188,270 848,768,788
The fund placement with PT Bank Mega Tbk represents placement of time deposits that are used to
secure the Subsidiaries’ payables to vendors and issuance of bank guarantees as required by the
PSC of Subsidiaries.
The fund placed with Credit Suisse AG, Singapore Branch (CS) on December 31, 2009 represents
placement of fund pursuant to the Cash and Account Management Agreement (CAMA) between the
Company, EMP HS, KPSA, ITA, IMG, Semco, Bentu, Korinci, Costa and CS, which will serve as
collateral for the loan obtained from CS on September 8, 2008 (Note 18). Meanwhile, the fund placed
with CS on December 31, 2008 represents placement of fund pursuant to the Credit Agreement
between Semco and CS. The placement served as collateral for the loan obtained from CS on
October 27, 2005 (Note 18).
The fund placed with PT Bank Mandiri (Persero) Tbk on December 31, 2009 represents fund
placement through Yayasan Dana Santunan Pegawai Selat Malaka (Malacca Strait Employees
Foundation) and other financial institution for employee benefits (Note 30) and fund placement as
bank guarantee of Subsidiaries as required by their PSC
Pursuant to the Gas Sales and Purchase Agreement (GSA) in 2005 (Note 32d) between Subsidiaries
EEKL and KEIL, funds received from gas sales are placed in a restricted account at The Hongkong
and Shanghai Banking Corporation Ltd. (HSBC), which is acting as a trustee as provided in the GSA.
The funds will paid to the bank accounts of EEKL, KEIL and other participant based on joint
instruction from Kangean PSC participants. This bank account is also used for payments for gas
transportation to PT Pertamina (Persero).
In accordance with the Share Subscription Agreement (SSA) dated March 6, 2007, between the
Company and Subsidiary EMP Inc. with Mitsubishi Corporation and Japan Petroleum Exploration Co.
Ltd., funds received from BP Exploration Operating Company Limited and BP America Production
Company (previous working interest holders of Kangean work area) in 2007, are to be placed in a
restricted account in Societe Generale Hongkong (SG). These funds are dedicated to the payments of
corporate and dividend taxes of Subsidiaries EEKL and KEIL. In 2008, EEKL and KEIL already paid
all of the corporate and dividend tax and on 2009, all funds placed in this account have already been
liquidated.
As of December 31, 2009 and 2008, all restricted funds are denominated in United States Dollar,
except for the fund placed in PT Bank Mandiri (Persero) Tbk, through Yayasan Dana Santunan
Pegawai Selat Malaka, amounting to Rp9.07 billion and Rp11.11 billion, respectively.
21
AND SUBSIDIARIES
11. DUE FROM/TO RELATED PARTIES
a. Nature of Relationship with Related Parties
- The Company, through one or more intermediaries, is under common control with Lapindo
Brantas, Inc (LBI), PT Energi Timur Jauh (ETJ), Asian Worldwide Group Ltd.(AWG) and
Global Overseas Enterprise Ltd. (GOE).
- PT Masagena Agung (MGA) is a common administrator with PT Mosesa Petroleum (MP), a

Subsidiary, in which the Company and MGA own 75% and 25%, respectively.
Due to these relationships it is possible that the terms and conditions of transactions between
these parties are not the same as those that would result from transactions between third parties.
b. Due from Related Parties
2009 2008
LBI 693,457,761 777,799,399
ETJ 510,323,127 707,157,409
Others (each below Rp1 billion) 1,154,073 256,885
Total 1,204,934,961 1,485,213,693
Percentage to Total Assets 11.75% 11.76%
Due from LBI mainly represents a portion of funds from a loan from Merrill Lynch in 2007. Minarak
Labuan Co. (L) Ltd. (MLC), as the majority owner of LBI, guaranteed the receivable from LBI to
the Company. The receivables are non-interest bearing and have no fixed repayment period.
Due from ETJ mainly represents a portion of receivables arising from a loan agreement dated
August 1, 1998 (Note 32c). The receivables are non-interest bearing and have no fixed
repayment period.
The Company and Subsidiaries did not provide any allowance for doubtful accounts.
Management believes these receivables are collectible.
c. Due to Related Parties
2009 2008
MGA 110,920,000 129,210,000
AWG 43,172,560 50,291,439
GOE 17,379,526 20,245,299
LBI 14,448,010 -
Others (each below Rp1 billion) 553,174 654,886
Total 186,473,270 200,401,624
Percentage to Total Liabilities 2.20% 2.25%
Due to MGA represents a payable in relation to the acquisition of PT Mosesa Petroleum (MP)
amounting to USD11,800,000 (Note 3). This was already paid in February 2010.
22
AND SUBSIDIARIES
11. DUE FROM/TO RELATED PARTIES (Continued)
Due to AWG and GOE represent payables from taking over the working interests in Bentu PSC
and Korinci Baru PSC from Petroz Bentu Ldc. and Petroz Korinci Baru Ldc. on August 7, 2005.
Due to AWG and GOE represent payables arising before the acquisition of THP. These payables
are non-interest bearing and have no fixed repayment period.
Loan to LBI represent payables of Subsidiaries activities that were funded by LBI. These payables
are non-interest bearing and have no fixed repayment period.
12. OIL AND GAS PROPERTIES
2009 2008
Well and equipment and their facilities 8,130,743,247 8,896,389,726
Well and equipment and their facilities in progress 1,822,075,818 1,991,697,566
Total 9,952,819,065 10,888,087,292

Accumulated depreciation, depletion and amortization (3,848,832,582 ) (4,304,708,529 )
Net Book Value 6,103,986,483 6,583,378,763
The details of movement oil and gas properties based on area of interests:
2009
Beginning Translation Ending
Area of Interest Location Balance Addition Deduction Adjustment Balance
Malacca Strait PSC Sumatera 1,457,759,793 253,595,353 183,974,526 (213,086,197 ) 1,314,294,423
Kangean PSC Jawa Timur 3,116,652,272 134,325,629 58,742,383 (441,467,035 ) 2,750,768,483
Gelam TAC Sumatera 383,370,752 20,689,996 51,595,105 (51,276,659 ) 301,188,984
Bentu PSC Sumatera 370,433,522 31,367,472 - (55,470,966 ) 346,330,028
Korinci Baru PSC Sumatera 158,850,557 3,712,478 118,786,904 (11,350,887 ) 32,425,244
Gebang PSC Sumatera 17,568,741 - 33,881 (3,130,364 ) 14,404,496
Semberah TAC Kalimantan 546,153,333 164,898,614 69,201,574 (85,922,435 ) 555,927,938
Tonga PSC Sumatera 156,290,537 8,485,780 - - 164,776,317
Sangatta-II PSC Kalimantan - 10,158,841 - (982,988 ) 9,175,853
Tabulako PSC Kalimantan - 10,479,062 - (1,013,973 ) 9,465,089
Total 6,207,079,507 637,713,225 482,334,373 (863,701,504 ) 5,498,756,855

Add: Cost Pool Effect 376,299,256 - (228,930,372 ) - 605,229,628
Net Book Value 6,583,378,763 6,103,986,483
2008
Beginning Translation Ending
Area of Interest Location Balance Addition Deduction Adjustment Balance
Malacca Strait PSC Sumatera 940,702,871 462,325,110 140,009,455 194,741,267 1,457,759,793
Kangean PSC Jawa Timur 2,253,110,854 420,601,834 46,350,027 489,289,611 3,116,652,272
Gelam TAC Sumatera 244,581,660 105,625,490 17,969,218 51,132,820 383,370,752
Bentu PSC Sumatera 286,764,052 32,800,342 - 50,869,128 370,433,522
Korinci Baru PSC Sumatera 201,249,253 49,747,605 116,228,983 24,082,682 158,850,557
Gebang PSC Sumatera 14,181,170 994,862 36,717 2,429,426 17,568,741
Semberah TAC Kalimantan 387,405,325 142,835,896 58,061,720 73,973,832 546,153,333
Tonga PSC Sumatera - 156,290,537 - - 156,290,537
Total 4,327,995,185 1,371,221,676 378,656,120 886,518,766 6,207,079,507

Add: Cost Pool Effect 211,871,514 - (164,427,742 ) - 376,299,256
Net Book Value 4,539,866,699 6,583,378,763
23
AND SUBSIDIARIES
12. OIL AND GAS PROPERTIES (Continued)
Depreciation, depletion and amortization for the years ended December 31, 2009 and 2008 of
Rp253,404,001 and Rp214,228,378, respectively, were charged to cost of goods sold (Note 25).
The additions mainly consisted of cost of development and exploration and capitalization of borrowing
cost. Total capitalized financing cost for the years ended December 31, 2009 and 2008 amounted to
USD3.07 million and USD4.55 million, respectively.
Oil and gas properties, as well as inventories were insured with several third-party insurance
companies to cover any risk of loss and damage, with total sums insured based on the working
interest, as of December 31, 2009 and 2008 being USD322,312,935 and USD330,101,193,
respectively. Management believes these sums insured are adequate to cover possible losses from
such risks.
Based on the evaluation of the management there are no events or changes in circumstances that
indicate any impairment of in the value oil and gas properties.
13. OTHER NON - CURRENT ASSETS
2009 2008
Deferred production cost 25,052,512 8,357,892
Security deposit 17,598,108 24,787,468
Others 13,332,499 4,938,888
Total 55,983,119 38,084,248
Deferred production cost represents allocation of production cost for crude oil not yet sold at the end
of the year.
The security deposit represents placement of deposit for rental office space in Wisma Mulia located at
Jenderal Gatot Subroto Street, Kav. 42, Jakarta.
14. NOTES PAYABLE
2009 2008
Arcadian Venture Ltd. (Arcadian) 18,189,000 -
Advance-Lead Strategy Ltd. (Advance-Lead) 15,442,170 31,415,550
Total 33,631,170 31,415,550
On September 4, 2009, the Company issued notes payable to Arcadian in the amount of
USD1,935,000. These notes payable were due on October 5, 2009 with interest from the issuance
date until the due date amounting to USD40,000. These notes payable will automatically roll-over if
agreed by both parties. There were no assets pledged for the issuance of these notes payable.
24
AND SUBSIDIARIES
14. NOTES PAYABLE (Continued)
On December 31, 2008, Subsidiary MP issued notes payable to Advance-Lead in the amount of
USD2,869,000 and these notes were due on December 31, 2009 with interest of 15% per annum. On
June 3, 2009, these notes payable were partially paid in the amount of USD1,919,000 and MP
reissued the notes payable with the principal amount plus interest of previously unpaid notes payable
in the amount of USD1,642,784. These notes payable will due on December 31, 2009. These notes
payable will automatically roll-over if agreed by both parties. There were no assets pledged for the
issuance of these notes payable.
15. TRADE PAYABLES
a. By Creditors - Third Parties
2009 2008
PT Petroflexx Prima Daya (formerly PT Jaya Wijaya Raya) 68,582,081 40,083,808
PT Jasa Karya Utama 56,569,065 69,723,251
Aircraft Management Ltd. 41,736,000 -
PT Duta Energi Semesta 37,084,915 34,685,519
PT Petrodata System 22,960,414 5,526,011
PT Prime Petro Services 18,477,058 8,340,589
PT Sanggarcipta Kreasitama 17,166,502 722,709
PT Dowell Anadrill Schlumberger 14,434,114 12,737,007
PT Schlumberger Geophnusantara 13,107,345 6,071,081
PT Bintang Perwira Utama 12,036,151 29,759
PT Emha Tara Navindo 11,621,828 2,619,996
PT Multi Production Solution 11,075,745 -
PT BJ Services Indonesia 10,174,072 10,496
PT Daya Alam Tehnik Inti 9,878,661 11,279,023
PT Dwi Prima Sembada 6,806,972 12,544,531
PT Alam Jaya Makmur Sejahtera 1,486,905 10,872,995
PT Kanaka Dwi Mitra Manunggal 18,783 13,502,746
Others (each below Rp10 billion) 272,564,431 194,004,558
Total 638,195,723 433,216,737
b. By Age Category
2009 2008
Up to 30 days 110,725,987 94,419,014
Over 31 - 60 days 55,587,011 49,618,841
Over 60 days 471,882,725 289,178,882
Total 638,195,723 433,216,737
25
AND SUBSIDIARIES
15. TRADE PAYABLES (Continued)
c. By Currency
2009 2008
United States Dollar 503,841,000 388,864,577
Indonesian Rupiah 134,354,723 44,352,160
Total 638,195,723 433,216,737
16. OTHER PAYABLES
2009 2008
BP Migas 43,132,035 -
PT Pertamina (Persero) (Pertamina) 37,335,725 -
PT Perusahaan Listrik Negara (Persero) (PLN) 27,222,498 40,646,152
PT Danatama Makmur - 43,800,000
Total 270,714,642 174,133,161
Payables to BP Migas and Pertamina represent over-lifting payables on oil sales of Subsidiaries in
accordance with the PSC or TAC.
Payables to PLN represent payables of Bentu, a Subsidiary, arising from its gas sales agreement.
17. ACCRUED EXPENSES
2009 2008
Financing cost 468,973,571 45,239,959
Support cost 86,283,174 67,260,272
Production 68,094,077 222,080,802
Drilling 32,481,897 205,767,915
Total 719,981,158 573,948,344
Financing cost represents interest and other financing expenses arising from the Senior and Junior
Loans from Subsidiary, EMP HS, to Credit Suisse (CS). These financing cost were already fully paid
in 2010 (Notes 18 and 38).
Accrued drilling, production and support costs mainly represent expenditures related to the activities
of exploration, development and exploitation of oil and gas of Subsidiaries with working interests in oil
and gas.
26
AND SUBSIDIARIES
18. LONG-TERM LOANS
2009 2008
Credit Suisse AG, Singapore Branch
(USD450 million in 2009 and 2008) 4,230,000,000 4,927,500,000
Japan Petroleum Exploration Co, Ltd., Japan
(USD78.23 million in 2009 and USD65.55 million in 2008) 735,340,172 717,725,433
Kangean Finance Company
(USD67.99 million in 2009 and USD nil in 2008) 639,110,982 -
Mitsubishi Corporation, Japan
(USD10.23 million in 2009 and
USD65.55 million in 2008) 96,229,190 717,725,433
PT Bank Permata Tbk 87,185 169,409
Total 5,700,767,529 6,363,120,275

Current maturities 2,350,087,185 -
Long-term Loans - Net 3,350,680,344 6,363,120,275
Credit Suisse (CS), Singapore
The loan from CS amounting to USD450 million as of December 31, 2009 and 2008 represent the
loans obtained by EMP HS.
On September 8, 2008, EMP HS entered into credit facilities arranged by CS as an arranger and
agent of up to maximum of USD450 million which consists of the following agreements:
a. Senior Credit Agreement
EMP HS obtained the loan under this agreement amounting to USD250 million that bears interest
at 12% above LIBOR. The loan period is sixty (60) months from the utilization date. EMP HS may
repay the loan in whole or in part at any time on or after the date falling twenty-four (24) months
after the utilization date.
b. Junior Credit Agreement
EMP HS obtained the loan under this agreement amounting to USD200 million that bears interest
at 9% above LIBOR. The loan period is sixty (60) months from the utilization date. EMP HS may
repay the loan in full any time after the later of the Senior discharge date and a date falling
eighteen (18) months after the utilization date.
On the same date, in accordance with the loans, the Company, EMP HS, Operating Companies (ITA,
KPSA, Semco, IMG, Costa, Bentu and Korinci Baru) and intermediate Holdco (RHI and THP) signed
a Cash and Account Management Agreement (CAMA) with CS with the terms as follows:
a. Each of EMP HS and Operating Companies shall establish, before or on the date of this
agreement, and shall maintain the Transaction Account (Junior Debt Service Reserve Account,
Senior Debt Service Reserve Account, Junior Interest Account, Senior Interest Account,
Prepayment Account, each Collection Account and Master Collection Account) with Common
Account Bank in accordance with the CAMA.
b. Each of EMP HS and Operating Companies undertake to the Junior and Senior Lender that it
shall make payments or provide instructions to make payments out of the Transaction Account
only in accordance with the terms of the CAMA.
c. The Transaction Account shall be operated by the Common Account Bank (on behalf of EMP HS
and the Operating Companies) in accordance with this CAMA.
27
AND SUBSIDIARIES
18. LONG-TERM LOANS (Continued)
Both credits above were utilized on September 12, 2008, being used for:
a. Repayment the prior loan obtained from CS amounting to USD152.75 million,
b. Repayment of the previous loan obtained from PMA Capital Management Ltd.,
c. Financing the development of existing assets, and
d. Funding the working capital for existing assets.
Collateral used for these credit facilities includes the Company’s guarantee, pledges of EMP HS’
shares and 50% of EMP Inc. shares.
In this loan facility agreement, there are restrictions on the Company, as follows:
1. Company and Subsidiaries may not make acquisition or investment, including, without limitation:
a. acquiring a company or shares or securities or a business;

b. incorporating a company;
c. entering into or acquiring any interest in any joint venture, partnership or similar arrangement;
or
d. acquiring an interest in any gas field other than hydrocarbon fields.
Clauses above do not apply to:
a. any acquisitions or investments made in the ordinary course of trade;

b. the entry by a subsidiary into New Supply Contracts in accordance with the provisions of
Clause and material contracts as arranged in the loan agreement;
c. an acquisition or incorporation of a company:
(i) where such acquisition or incorporation is solely funded by:
a. the proceeds of an equity raising in the form of an issue of Company’s shares
b. excess cash released to EMP HS, in accordance with Cash and Management
Agreement; and
(ii) for the purposes of conducting hydrocarbon exploration and/or extraction business.
2. Dividends payment limitation
(1) Company shall not pay dividends or make any distributions if a default has occurred and is
outstanding;
(2) Subject to point (1) above, the Company shall ensure that any dividends or distributions paid
to its shareholders in any financial year shall:
(i) limited to five percent (5%) of its total net income for the immediately preceding financial
year;
(ii) not exceed the aggregate of USD5,000,000 for that financial year.
Except with the prior written consent of the Majority Lenders.
3. Limitation of Subsidiary Operations
The Company and Subsidiary shall ensure the provision of floating storage and offloading vessels
(FSO) for Kangean PSC Block and conduct an equity raising through rights issue in the capital of
Company in the same amount or more than USD150 million before June 30, 2009. At least
USD150 million from the net proceeds of the equity raising must be used for the following
purposes:
- Funding of capital expenditures and/or working capital; and/or
- Refinancing of the whole or a part of the loan facility.
28
AND SUBSIDIARIES
4. Limitation of Financial Ratios
The Company must ensure that consolidated total debt to earnings before interest, taxes,
depreciation and amortization (EBITDA) ratio at the end of the calculation period shall not exceed:
- 3.0 : 1 for calculation periods ending December 31, 2008 and June 30, 2009;
- 0.5 : 1 for calculation periods ending after December 31, 2010 and June 30, 2011;
In the end of 2009, the Company and creditors of Senior and Junior Loans have agreed on the terms
of the Senior and Junior Loans restructuring. Under these restructuring terms, the Company has
received a conditional waiver from existing default condition on the Senior and Junior Loans, under
which the Company is required to take certain corporate actions in order to reduce the loans and to
provide the Creditors of Senior and Junior Loan additional control over cash flows, operations and
Company expenditures.
As part of the restructuring, the Company has agreed to use part of the Limited Public Offering (PUT)
II funds for full payment of the principal of the Junior Loan and partial payment of the principal of the
Senior Loan to creditors who choose to accept the partial payment, totalling USD250,000,000. The
remaining loan principal will be paid in accordance with the agreed repayment schedule for Senior
loans of sixty (60) months from the date of loan utilization. EMP HS can settle all or part of the loan at
any time on or after twenty four (24) months from the date of utilization.
Mitsubishi Corporation (MC) and Japan Petroleum Exploration Co., Ltd. (Japex)
In accordance with the term sheet agreed under the Share Subscription Agreement (SSA) dated
March 6, 2007, MC and Japex agreed to provide loan facilities to the Company, EMP Inc., EEKL and
KEIL for capital expenditures. The following loan facilities were entered into under the SSA:
a. Loan facilities for the Company
MC and Japex agreed to provide a loan facility to the Company for 50% of KEIL and EEKL’s
expended capital expenditures for the period from July 1, 2006 to May 16, 2007, capped at a
combined total of USD21.55 million as stipulated in the Facility Agreements dated May 16, 2007.
This loan will be due on June 30, 2017, and bears interest at LIBOR plus 3.75% for time deposits
for six (6) months. The loan has a five (5) year repayment grace period and will be repaid by
semi-annual installments thereafter.
As of December 31, 2009 and 2008, the Company has utilized the loan facility plus interest,
amounting to USD20.47 million and USD19.42 million, respectively.
b. Loan facilities for EEKL and KEIL
MC and Japex agreed to provide a loan facility to EEKL and KEIL in respect of the Subsidiary’s
funding obligations for capital expenditures, capped at a combined total of USD430 million
including the above loan facility for the Company as stipulated in the Carry Agreement dated
May 16, 2007. The loan will become due on June 30, 2017 and bear interest at LIBOR plus
3.75% for time deposits for six (6) months. The loan has a five (5) year repayment grace period
and will be repaid in semi-annual installments thereafter.
As of December 31, 2009 and 2008, EEKL and KEIL have utilized the loan facility plus interest
amounting to USD271.96 million (the Company’s portion being USD135.98 million) and
USD223.36 million (the Company’s portion being USD111.68 million), respectively.
29
AND SUBSIDIARIES
Based on the novation and amendment agreement dated July 17, 2009 between EEKL, KEIL, MC
and Kangean Finance Company (KFC), all of the loan facilities EEKL and KEIL from MC have
been transferred to KFC. All terms and conditions in the previous loan facilities remain
unchanged.
PT Bank Permata Tbk
On February 8, 2005, IMG, a Subsidiary, obtained a credit facility from PT Bank Permata Tbk for the
purchase of vehicles. The loan bears interest at 8.8% per annum over its 5-year period and was
guaranteed by the vehicles.
19. MINORITY INTEREST
a. Minority interest in net assets of Subsidiaries
2009 2008
PT Mosesa Petroleum 32,438,701 35,448,357
PT Visi Multi Artha 300,000 -
PT Artha Widya Persada 300,000 -
PT Tunas Harapan Perkasa 17,441 12,605
Total 33,056,142 35,460,962
b. Minority interest in net income (loss) of Subsidiaries
2009 2008
PT Mosesa Petroleum 3,009,656 1,933,921
PT Tunas Harapan Perkasa (4,836 ) (1,247 )
Total 3,004,820 1,932,674
20. CAPITAL STOCK
The Company’s shareholders, the number of issued and paid shares and the related balances as of
December 31, 2009 and 2008 based on registration by PT Ficomindo Buana Registrar were as
follows:
2009
Number of Issued and

Issued and Percentage of Paid Share
Paid Shares Ownership Capital
Shareholders (full amount) (%) (Rp)
PT Bakrie & Brothers Tbk 6,224,151,377 43.22 622,415,138

Rennier Abdul Rachman Latief 388,496,500 2.69 38,849,650
PT Kondur Indonesia 257,604,398 1.79 25,760,440
Julianto Benhayudi 50,000 0.01 5,000
PT Brantas Indonesia 49 0.00 4
Public (each below 5%) 7,530,511,048 52.29 753,051,105
Total 14,400,813,372 100.00 1,440,081,337
30
AND SUBSIDIARIES
20. CAPITAL STOCK (Continued)
2008
Number of Issued and

Issued and Percentage of Paid Share
Paid Shares Ownership Capital
Shareholders (full amount) (%) (Rp)
PT Bakrie & Brothers Tbk 6,221,151,377 43.20 622,115,138

PT Brantas Indonesia 551,963,559 3.83 55,196,356
PT Kondur Indonesia 259,287,582 1.80 25,928,758
Rennier Abdul Rachman Latief 54,909,500 0.38 5,490,950
Julianto Benhayudi 50,000 0.00 5,000
Public (below 5% each) 7,313,451,354 50.79 731,345,135
Jumlah 14,400,813,372 100.00 1,440,081,337
The ownership by PT Bakrie & Brothers Tbk (BNBR) of 6,221,151,377 shares as of December 31,
2009 and 2008 based on the letter from other shareholders, PT Kondur Indonesia and PT Brantas
Indonesia, whereby these companies held 3,517,395,602 shares and 2,703,755,775 shares,
respectively, for the benefit of the BNBR. As of December 31, 2009, BNBR directly owned 3,000,000
shares.
21. PAID IN CAPITAL

Difference from
the Excess of
Price Over
the Share Share Issuance
Par Value Cost Net
Issuance of 7,756,801,695 shares of

the Company through:
Initial Public offering -
2,847,433,500 shares 170,846,010 12,425,064 158,420,946
Right Issues I -
4,909,368,195 shares 3,289,276,691 92,948,408 3,196,328,283
Total 3,460,122,701 105,373,472 3,354,749,229
22. DIFFERENCE IN VALUE FROM RESTRUCTURING TRANSACTIONS OF ENTITIES UNDER

COMMON CONTROL
Difference in
Value from
Restructuring
Transactions of
Entities Under
Dated Net Book Value Acquisition Cost Common Control
RHI Corporation February 2003 92,458,079 200,000,000 (107,541,921 )

PT Imbang Tata Alam February 2004 (43,635,241 ) 38,400,000 (82,035,241 )
Energi Mega Pratama Inc, August 2004 238,407,446 239,420,000 (1,012,554 )
PT Tunas Harapan Perkasa January 2006 165,058,249 2,609,113,573 (2,444,055,324 )
Total 452,288,533 3,086,933,573 (2,634,645,040 )
31
AND SUBSIDIARIES
23. DIFFERENCE IN THE CHANGE OF EQUITY TRANSACTION OF A SUBSIDIARY
In 2007, EMP Inc., issued 26,000,010 new shares to Mitsubishi Corporation and Japan Petroleum
Exploration Co., Ltd. resulting in a decrease in the Company’s interest in EMP Inc. from 100% to 50%.
The difference between the Company’s interest in EMP Inc. after the new share issuance and the
carrying value of the investment before the new share issuance was recorded under the “Difference in
the Change of Equity Transaction of a Subsidiary” account and is presented as part of the equity. Due
to that dilution, since January 1, 2007, the Company has proportionately consolidated EMP Inc.
24. NET SALES
2009 2008
Export
Itochu Petroleum Co. (S) Pte. Ltd. 668,383,781 -
Petro Diamond Co. Ltd. 82,927,171 896,401,296
Well Pacific Energy Pte. Ltd. 58,981,522 -
810,292,474 896,401,296
Domestic
PT Perusahaan Listrik Negara (Persero) 134,553,566 111,333,672
PT Petrokimia Gresik (Persero) 97,139,743 69,925,342
PT Riau Andalan Pulp & Paper 32,885,653 67,800,072
PT Perusahaan Gas Negara (Persero) Tbk - 47,082,360
634,076,265 962,669,815
Total 1,444,368,739 1,859,071,111
Details of sale above 10% to third parties are as follows:
2009 2008
Itochu Petroleum Co. (S) Pte. Ltd. 668,383,781 -
Petro Diamond Co. Ltd. 82,927,171 896,401,296
Total 1,120,808,255 1,562,929,665
Oil sold for the years ended December 31, 2009 and 2008 amounted to Rp1,069.5 billion and
Rp1,421.6 billion, respectively. Gas sold for the years ended December 31, 2009 and 2008 amounted
to Rp374.9 billion and Rp437.5 billion, respectively.
32
AND SUBSIDIARIES
25. COST OF GOODS SOLD
2009 2008
Production 589,283,920 488,409,712
Support cost 376,448,779 300,701,068
Depreciation, depletion and amortization (Note 12) 253,404,001 214,228,378
Workover 41,698,163 70,031,707
Total 1,260,834,863 1,073,370,865
26. OPERATING EXPENSES
2009 2008
Salaries, allowances and employee benefits 104,061,384 120,225,733
Professional fees 15,896,394 34,066,651
Rent 12,634,862 13,234,132
Representation and donation 8,422,571 13,277,092
Office expenses 5,366,919 7,855,009
Business travelling 2,968,213 7,474,269
Depreciation 1,102,156 2,411,544
Insurance 312,029 715,803
Others (below Rp500 million each) 5,667,512 3,884,554
Total 156,432,040 203,144,787
27. OTHER INCOME (CHARGES)
a. Financing Cost
2009 2008
Interest expenses 780,632,646 495,794,812
Other financing cost 495,216,903 264,526,614
Interest income (8,565,154 ) (134,192,537 )
Total 1,267,284,395 626,128,889
b. Others - Net
Others - net for the year ended December 31, 2009 consists of expenses for write-offs of project
advances amounting to Rp43,378,254 and others expenses amounting to Rp75,421,282.
33
AND SUBSIDIARIES
28. TAXATION
a. Taxes Payable
2009 2008
Corporate income and dividend tax 60,260,994 19,878,203
Income taxes
Article 4 (2) 129,231 386,113
Article 21 7,608,386 16,765,624
Article 23 32,305,450 34,640,132
Article 26 42,450,877 46,832,118
Value-Added Tax 94,808,226 97,706,261
Additional tax assessments and penalties 8,631,066 10,341,420
Total 246,194,230 226,549,871
b. A reconciliation between income (loss) before income tax expense as shown in the consolidated
statements of income for the years ended December 31, 2009 and 2008 is as follows:
2009 2008
Income (loss) before income tax expense
per consolidated statements of income (1,417,499,446 ) 18,587,838
Income (loss) of Subsidiaries before
income tax expense (1,227,521,734 ) 134,082,822
Loss before income tax expense attributable to
the Company (189,977,712 ) (115,494,984 )
Temporary difference:
Employee benefits 1,998,490 896,488
Permanent differences:
Donation and entertainment 5,974,145 11,475,148
Taxes expense 10,298,162 20,978,864
Interest income which subject to final tax (5,506,471 ) (8,150,705 )
Others 119,206 454,005
Total 10,885,042 24,757,312

Estimated fiscal loss of the Company (177,094,180 ) (89,841,184 )
Estimated cumulative fiscal loss at beginning of year (359,947,098 ) (261,377,664 )
Prior fiscal loss adjustment 234,152,784 (8,728,250 )
Cumulative Fiscal Loss at End of Year (302,888,494 ) (359,947,098 )
No provision for current income tax was made for the years ended December 31, 2009 and 2008
due to the Company still being in a fiscal loss position.
In these consolidated financial statements, the amount of 2009 fiscal loss is based on the
preliminary calculation, as the Company has not yet submitted its annual corporate income tax
report.
34
AND SUBSIDIARIES
28. TAXATION (Continued)
c. Tax Benefit (Expense)
Details of tax benefit (expense) of the Company and Subsidiaries were as follows:
2009 2008
Current tax
Company - -
Subsidiaries (47,824,151 ) (42,220,475 )
Sub-total (47,824,151 ) (42,220,475 )
Deferred tax
Company (29,204,001 ) 11,647,798
Subsidiaries (237,926,986 ) (24,891,119 )
Sub-total (267,130,987 ) (13,243,321 )
Total (314,955,138 ) (55,463,796 )
d. Deferred Tax
The details of the Company and Subsidiaries’ deferred tax assets and liabilities were as follows:
Credited
(Charged) to
Balance as of Consolidated Balance as of
December 31, Translation Statements December 31,
2008 Adjustments of Income 2009
Deferred Tax Assets

Fiscal loss 73,434,789 - (29,404,553 ) 44,030,236
Employee benefits 9,028,174 612,667 42,872,994 52,513,835
Oil and gas properties (879,606,791 ) 125,459,849 (9,810,700 ) (763,957,642 )
Non-capital inventory (54,906,165 ) 5,494,096 (37,240,856 ) (86,652,925 )
Unrecoverable charges 1,524,017,073 (178,505,997 ) (360,297,948 ) 985,213,128
Total 671,967,080 (46,939,385 ) (393,881,063 ) 231,146,632
Deferred Tax Liabilities

Employee benefits 19,915,137 (4,439,748 ) 16,749,484 32,224,873
Oil and gas properties (588,345,186 ) 73,250,959 103,664,668 (411,429,559 )
Non-capital inventory (51,102,292 ) 6,620,576 6,335,924 (38,145,792 )
Total (619,532,341 ) 75,431,787 126,750,076 (417,350,478 )
Deferred Tax Benefit (267,130,987 )
35
AND SUBSIDIARIES
28. TAXATION (Continued)

Credited
(Charged) to
Balance as of Consolidated Balance as of
December 31, Translation Statements December 31,
2007 Adjustments of Income 2008
Deferred Tax Assets

Fiscal loss 61,852,018 - 11,582,771 73,434,789
Employee benefits 6,438,048 1,085,961 1,504,165 9,028,174
Oil and gas properties (612,692,030 ) (118,812,603 ) (148,102,158 ) (879,606,791 )
Non-capital inventory (32,908,779 ) (7,261,761 ) (14,735,625 ) (54,906,165 )
Unrecoverable charges 1,068,212,208 203,650,980 252,153,885 1,524,017,073
Total 490,901,465 78,662,577 102,403,038 671,967,080
Deferred Tax Liabilities

Employee benefits 7,269,820 2,498,675 10,146,642 19,915,137
Oil and gas properties (390,489,389 ) (78,910,456 ) (118,945,341 ) (588,345,186 )
Non-capital inventory (37,302,537 ) (6,952,095 ) (6,847,660 ) (51,102,292 )
Total (420,522,106 ) (83,363,876 ) (115,646,359 ) (619,532,341 )
Deferred Tax Benefit (13,243,321 )
Management believes that the deferred tax assets as of December 31, 2009, can be recovered in
future years.
f. On November 28, 2006, the Directorate General of Taxation issued Tax Assessment Letter on
Underpayment (SKPKB) for corporate income tax and income tax article 26 (4) for Costa for the
years 1997, 1998, 2000, 2001 and 2002 totaling USD8,860,992. On February 27, 2007, Costa
submitted its Objection Letter to the Tax Office and filed a lawsuit with the State Administration
Court opposing such SKPKB. Up to the completion date of these consolidated financial
statements, the Tax Office has rejected the Objection Letter. However, the lawsuit is still under
process.
In October and November 2007, Bentu received tax assessment letters for interest penalties on
late payments of VAT and witholding tax article 23 amounting to Rp4,153,062 and Rp3,054,
respectively.
On March 7, 2007, IMG received SKPKB for VAT amounting to Rp6,265,260 from Directorate
General of Taxation, of which Rp3,174,381 has been paid by IMG on November 22, 2007. In
June 2007, the Directorate General of Taxation issued an additional tax assessment letter of VAT
of IMG amounting to Rp1,384,078.
29. BASIC LOSS PER SHARE
The computation of basic loss per share is based on the following data:
2009 2008
Net loss used for calculation (full amount) (1,729,449,763,618) (34,943,284,266 )
Weighted average number of shares for

shares for the calculation of basic loss per share 14,400,813,372 14,400,813,372
Basic Loss per Share (full amount) (120,09 ) (2,43 )
The Company did not calculate diluted loss per share since the Company has no shares that have a
potential dilutive effect for the years ended December 31, 2009 and 2008.
36
AND SUBSIDIARIES
30. EMPLOYEE BENEFITS OBLIGATIONS
Pension Plans
The Subsidiaries (KEIL, KPSA and ITA) provide defined contribution pension plans covering all their
permanent employees.
Pension plans for KPSA and ITA are managed by PT Tugu Mandiri, while Bentu and Korinci Baru are
managed by PT Asuransi Allianz Life Indonesia, the contribution amounting to 9% of employee’s
salary, of which 6% is paid by the Subsidiaries and 3% by the employee. Pension plan for KEIL is
managed by Manulife, the contribution amounting to 8% of employee’s salary, of which 6% is paid by
the Subsidiary and 2% by the employee.
Employee Benefits
The Company and Subsidiaries provide post-employment benefits for all of their permanent
employees based on Employment Working Agreement/Company Policy. No funding has been made
by the Company and Subsidiaries, except by KPSA and ITA, which funds are administered and
managed by the Board of Trustees Contribution Fund of the Malacca Strait Employees Foundation
and Trust Fund Agreement with several banks.
Employee benefits expense was as follows:
2009 2008
Current-service cost 12,290,120 16,050,254
Interest costs 17,637,661 10,910,718
Net actuarial losses (gains) recognized 274,897 2,005,421
Past-service cost 2,342,466 4,555,680
Total 32,545,144 33,522,073
Employee benefits obligations was as follows:
2009 2008
Present value of employee benefits obligation 168,157,062 153,363,560
Unrecognized actuarial loss (3,290,833 ) (10,690,809 )
Unrecognized past-service liability (20,543,608 ) (22,823,680 )
Employee Benefits Obligation 144,322,621 119,849,071
Movements of employee benefits obligation were as follows:
2009 2008
Beginning of the year 119,849,071 89,340,193
Amount charged to consolidated statements of income 32,545,144 33,522,073
Benefits paid (8,005,851 ) (6,213,739 )
Contributions (65,743 ) 2,086,241
Asset correction - 1,114,303
End of The Year 144,322,621 119,849,071
37
AND SUBSIDIARIES
30. EMPLOYEE BENEFITS OBLIGATIONS (Continued)
The employee benefits obligations for the Company, KPSA, ITA and KEIL as of December 31, 2009
were computed based on the actuarial reports prepared by PT Bumi Persada Aktuaria, an
independent actuarial firm, in its reports dated February 19, 2010, February 4, 2010 and February 4,
2010. Meanwhile, the employee benefits obligations as of December 31, 2008 were calculated based
on the actuarial report of PT Bumi Persada Aktuaria, in its report dated November 11, 2008. The
computations used the following assumptions:
Discount rate : 11% per annum

Future salary increases : 10% per annum
Mortality rate : Commissioner Standard Ordinary (CSO) - 1980
Disability rate : 10% of Commissioner Standard Ordinary (CSO) - 1980
Actuarial method : Projected Unit Credit
Resignation rate : Age 15-29 = 6% per annum, age 30-34 = 3% per annum,
age 35-39 =1,8% per annum, age 40-50 = 1,2% per annum
per annum, age 51-52 = 0,6% per annum and age > 52 = 0%
Normal retirement age : 56 years (all employees are assumed to retire at
normal retirement age)
The employee benefits obligation for Costa as of December 31, 2009 and 2008 were calculated based
on the actuarial reports of PT Dian Artha Tama, an independent actuarial firm, in its reports dated
February 8, 2010 and November 14, 2008, respectively. The computations used the following
assumptions:
Discount rate : 10% per annum

Future salary increases : 5% per annum
Mortality rate : Commissioner Standard Ordinary (CSO) - 1980
Disability rate : 0,1% of Commissioner Standard Ordinary (CSO) - 1980
Resignation rate : Age 18-45 = 1% per annum and age > 46-55 = 0%
Normal retirement age : 56 years (all employees are assumed to retire at
normal retirement age)
The employee benefits obligation for Semco as of December 31, 2009 was computed based on the
actuarial report of PT Bumi Persada Aktuaria, an independent actuarial firm, in its report dated
February 19, 2010. Meanwhile, the employee benefits obligation as of December 31, 2008 was
computed based on the actuarial report of PT Padma Radya Aktuaria, an independent actuarial firm,
in its report dated December 3, 2008. The computations used the following assumptions:
Discount rate : 11% per annum for 2009 (13% per annum for 2008)
Future salary increases : 10% per annum for 2009 (10% per annum for 2008)
Mortality rate : Commissioner Standard Ordinary (CSO) - 1980 for 2009
(100% Tabel Mortalita Indonesia 2 for 2008)
Disability rate : 10% of Commissioner Standard Ordinary (CSO) - 1980 for 2009
(5% of Tabel Mortalita Indonesia 2 for 2008)
Resignation rate : Age 15-29 = 6% per annum, age 30-34 = 3% per annum,
age 35-39 =1,8% per annum, age 40-50 = 1,2% per annum,
age 51-52 = 0,6% per annum and age > 52 = 0% for 2009
(1% per annum for 2008)
Normal retirement age : 56 years (all employees are assumed to retire at normal retirement
age)
38
AND SUBSIDIARIES
31. SEGMENT INFORMATION
Primary Segment
For management purposes, the Company and Subsidiaries are currently organized into two (2)
business divisions consisting of financing and mining. These divisions are the bases on which the
Company and Subsidiaries report their primary segment information.
Business segment information of the Company and Subsidiaries was as follows:

2009
Financing Mining Elimination Consolidated
NET SALES
External sales - 1,444,368,739 - 1,444,368,739
RESULT
Segment result - 183,533,876 - 183,533,876
Unallocated expenses (156,432,040 )
Income from operations 27,101,836

Financing charges (1,267,284,395 )
Other charges - net (177,316,887 )
Loss before tax benefit (1,417,499,446 )

Tax benefit - net (314,955,138 )
Loss before minority interest (1,732,454,584 )

Minority interest 3,004,820
Net Loss (1,729,449,764 )
OTHER INFORMATION
Assets
Segment assets 5,087,329,422 15,141,815,072 (10,207,899,583 ) 10,021,244,911
Unallocated assets 231,146,632
Consolidated Total Assets 10,252,391,543
Liabilities
Segment liabilities (875,304,198 ) (13,904,040,154 ) 6,718,727,988 (8,060,616,364 )
Unallocated liabilities (417,350,477 )
Consolidated Total Liabilities (8,477,966,841 )
Capital expenditure - 608,874,397 - 608,874,397

Depreciation, depletion and amortization 1,102,156 253,404,001 - 254,506,157
39
AND SUBSIDIARIES
31. SEGMENT INFORMATION (Continued)

2008
Financing Mining Elimination Consolidated
NET SALES
External sales - 1,859,071,111 - 1,859,071,111
RESULT
Segment result - 785,700,246 - 785,700,246
Unallocated expenses (203,144,787 )
Income from operations 582,555,459

Financing charges (760,321,426 )
Other charges - net 196,353,805
Loss before tax benefit 18,587,838

Tax benefit - net (55,463,796 )
Loss before minority interest (36,875,958 )

Minority interest 1,932,674
Net Loss (34,943,284 )
OTHER INFORMATION
Assets
Segment assets 16,350,884,262 8,116,365,438 (12,512,594,251 ) 11,954,655,449
Unallocated assets 671,967,080
Consolidated Total Assets 12,626,622,529
Liabilities
Segment liabilities (8,449,468,372 ) (7,104,107,440 ) 7,293,187,484 (8,260,388,328 )
Unallocated liabilities (619,532,341 )
Consolidated Total Liabilities (8,879,920,669 )
Capital expenditure - 1,324,528,944 - 1,324,528,944

Depreciation, depletion and amortization 2,411,544 214,228,378 - 216,639,922
Secondary Segment
The Company and Subsidiaries’ are operating in two main geographical areas, domestic and
international.
40
AND SUBSIDIARIES
31. SEGMENT INFORMATION (Continued)
Sales Based on Market
The following are the Company and Subsidiaries’ sales based on geographical market regardless of
the location of the production of oil and gas:
2009 2008
Geographical market
Domestic
Jakarta 369,497,302 666,528,369
East Java 231,693,310 228,341,374
Riau 32,885,653 67,800,073
International
Singapore 810,292,474 896,401,295
Total 1,444,368,739 1,859,071,111
32. COMMITMENTS
The Company has significant agreements and commitments as follows:
a. Acquisition of 10% working interest at PSC Masela Block
Pursuant to and subject to the satisfaction of the conditions set forth in the Masela Farm-Out
Agreement (FOA) dated November 4, 2009, the Company will indirectly, through EMP EI, acquire
the 10% working interest of Masela PSC.
As consideration for the assignment of the Acquired Assets, EMP EI will pay Inpex Masela Ltd a
fixed sum of USD77.25 million with adjustment, which is calculated before closing date, according
to the Masela FOA.
The Masela FOA sets out the conditions precedent that must be satisfied in order for the
acquisition to be completed. These conditions precedent include, are follows:
• Inpex Masela Ltd. has receive necessary written approvals for the farm-out of the Acquired
Assets to EMP EI from BP Migas, including the consent of the Japan Oil, Gas and Metals
National Corporation, a shareholder of Inpex Masela Ltd.;
• Inpex Masela Ltd. has received payment of acquisition cost;
• Inpex Masela Ltd. already received design of Joint Operating Agreement;
• Inpex Masela Ltd. already received notice from EMP EI that it has completed its due diligence
in respect of the Acquired Assets and wishes to proceed with the assignment of the Acquired
Assets.
The assignment of the Acquired Assets pursuant to the Masela FOA will be completed (the
“Acquisition Closing”) once all conditions precedent to the completion of the Acquisition have
been satisfied and Inpex Masela delivers to EMP EI an interim statement setting forth the
estimated adjustments relating to the consideration of the Acquisition. Upon the Acquisition
Closing, the parties will date the document assigning the Acquired Assets to EMP EI and
complete the Masela JOA by dating it.
As of reporting date, the acquisition transaction has not yet been fully completed.
41
AND SUBSIDIARIES
32. COMMITMENTS (Continued)
b. Production Sharing Contract (PSC) and Technical Assistance Contract (TAC)
The general concept of the PSC and TAC, are that the Contractor (in this case, the Subsidiaries)
bear all risks and costs of exploration until commencement of commercial production. The
contractor receives a share of production to meet cost recovery.
1. Relinquishments
The Contractor is required to relinquish certain contract areas to BP Migas (for PSC) and
Pertamina (for TAC) within certain periods based on the agreement between the contractor
and BP Migas.
2. Entitlement of Production
The entitlement production of oil and gas received after deduction of First Tranche Petroleum
(FTP), recoverable costs and investment credit, is allocated between the Government and
Contractor before the impact of tax, and after adjustment for the Domestic Market Obligation
(DMO).
Under the sharing concept, the oil to be shared between the Government and Contractor is
made up of:
• cost recovery
• investment credit
• equity to be split
3. Cost Recovery
The Contractor can recover of the costs of oil and gas production. Costs that are allowed to
be recovered are as follows:
a. Current year operational cost, including costs of exploration of other fields in PSC and
TAC area, intangible costs of exploration and development wells and inventories costs
when landed in Indonesia. The Contractor also receives a partial reimbursement of
overhead costs, limited to 2% of the total expenditure, which can be taken into account in
a quarterly report and approved by BP Migas;
b. Depreciation of capital cost in the amount of 50%, 25%, 12,5% and 10% using the
declining balance method for assets used at least in one (1) day during the current year.
Title of the capital goods passes to the government on landing in Indonesia, but the
Contractor can claim depreciation on those capital items; and
c. Unrecouped operating and depreciation expenses from previous years. If the current
production is not sufficient to make such payment, these expenses can be carried forward
to subsequent years without a time limit.
The main component of expenses that the Contractor is not entitled to recover is bonuses
paid to the government and certain financing costs. However such bonuses are tax
deductible.
4. Investment Credit
An investment credit is allowed on direct development and production of capital costs incurred
on a project basis, as negotiated and approved by BP Migas.
42
AND SUBSIDIARIES
5. Interest Recovery
Interest recovery is one incentive for the supply of capital for certain projects approved by BP
Migas. The recovery of interest expenses can be carried out during the depreciating assets
project.
Details and the amount on the planning and funding should be included in the annual budget
expense of operations report and approved of BP Migas.
6. Management and Head Office Overheads
Some general and administrative cost (other than direct charges) relating to head office
overheads can be allocated to the PSC and TAC operation, based on the methodology
approved by BP Migas. This overhead allocation method must be applied consistently and is
subject to periodic review and audit by BP Migas. Some PSC arrangements cap this
overhead at a flat two percent (2%) of total PSC operating cost. For PSC already producing,
BP Migas will perform an audit of overhead of head office on a yearly basis.
7. Equity Shares
Any oil that remains after investment credit and cost recovery is split between BP Migas and
the Contractor on the schedule of profit sharing after tax of 85/15 for oil and 70/30 for gas for
the shares of BP Migas and the Contractor, respectively.
8. FTP
The Contractor and government are entitled to take a quantity of petroleum equal to 20% of
the production of each year before any deduction for recovery of operating costs, to be split
according to their respective equity shares as stated in the contracts.
9. Domestic Market Obligation
According to the terms of PSC and TAC, after commercial production commences, the
Contractor should fulfill its obligation to supply the domestic market in Indonesia. In general
practice, the Contrctor is required to supply a maximum of 25% of total oil production from the
contract area.
Generally for the first five years after the contract area commences, the Contractor is paid by
BP Migas in full for the DMO oil. For the subsequent years, however, the prices will be
reduced to 10% of price for subsequent years.
Historically, there has been no DMO obligation associated with gas production; however,
such matter has now been introduced.
10. Valuation of Oil
To determine the sharing of production and for tax purposes, oil is valued on the basis of a
basket of average Indonesian Crude Prices (ICP), the value being calculated by BP Migas on
a monthly basis.
Under a PSC, the Contractor receives oil or in-kind product for settlement of its cost and
share of equity, thus making it necessary to determine a price to convert oil to United States
Dollar in order to calculate the cost recovery.
43
AND SUBSIDIARIES
11. Over/Under-Lifting
Lifting variances will occur each year between Contractor and Government. These over/
under-lifting are settled in cash with the government and can be considered to be sales or
purchases of oil or gas, respectively. The individual members of the PSC may in turn have
over/under-lifting between themselves, which will be settled, according to joint venture
agreements, generally in cash or from production in the following year.
12. Abandonment and Site Restoration
PSC contract that were signed after 1995 must include in their budget provision for clearing,
cleaning and restoring sites upon completion of work. These cash funds are set aside in a
non-refundable account for abandonment and site restoration, but are cost recoverable and
tax deductible.
13. VAT Reimbursement
The Contractor follows Law No.22, which stipulates that it is the obligation of Pertamina (now
BP Migas) to “assume and discharge all other Indonesian taxes other than income tax
including VAT, transfer tax, import and export duties on material equipment and supplies
brought into Indonesia by Contractors and Sub-contractors”.
c. Agreement with PT Energi Timur Jauh (ETJ)
KPSA, IMG, Semco, Costa, Bentu and Korinci Baru, the Subsidiaries, appointed ETJ as
operational and administrative coordinator, provider of general and administrative assistance and
as cash manager for the respective periods from the following dates:
- from January 1, 1998 until December 31, 1998 for KPSA;

- from January 1, 2004 until December 31, 2004 for IMG;
- from January 1, 2003 until December 31, 2007 for Semco;
- from May 22, 2002 until May 21, 2003 for Costa; and
- from February 7, 2005 until February 6, 2006 for Bentu and Korinci Baru.
Extensions of the agreement will be automatically carried out unless terminated by both parties.
Based on the agreement, ETJ shall assist Subsidiaries in keeping the required books of accounts
and other records applicable in Indonesia for oil and gas industries. ETJ shall also deliver to
Subsidiaries a monthly report of operational and administrative matters and activities and provide
access to duly authorized parties of Subsidiaries to examine or inspect the books of accounts and
records prepared by ETJ. ETJ was also appointed as cash manager and authorized signatory in
respect of each of the Subsidiaries’ bank accounts, without limitation, in making payments of
expenditures on behalf of Subsidiaries. ETJ shall arrange the use of Subsidiaries’ funds as
necessary and use any of Subsidiaries’ money being managed by ETJ to fund expenditures of
other related parties having a similar agreement with ETJ as deemed necessary. ETJ shall also
maintain separate and individual clean records of the inter-company payables and receivables
status of Subsidiaries and update them on a regular basis.
All costs and expenses incurred by ETJ in relation to the above-mentioned purposes shall be
chargeable to the Subsidiaries. All interest arising from Subsidiaries’ funds in ETJ’s bank account
shall be credited to Subsidiaries.
44
AND SUBSIDIARIES
d. The Subsidiaries’ Gas Sale and Purchase Agreements
(1) KEIL and EEKL
On July 7, 2005, EEKL, KEIL and BP Migas (as sellers) signed Gas Sale and Purchase
Agreements (the GSAs) with PT Pembangkit Jawa Bali, PT Perusahaan Gas Negara
(Persero) Tbk, and PT Petrokimia Gresik as buyers. Pursuant to the GSAs, the buyer shall
pay for gas sales to Trustee (HSBC) and the Trustee shall receive, hold, manage and
disburse amounts paid by buyers under the GSAs (Note 10).
On October 30, 2007, KEIL entered into certain amendments of the Sales and Purchase of
Gas Agreements that had been agreed in December 2005 with:
a. PT Perusahaan Listrik Negara (Persero), which shall expire on the earlier of: March 31,
2027, or the volume of 368.7 trillion British thermal units (TBTU) having been fulfilled;
b. PT Petrokimia Gresik (Persero), which shall expire on the earlier of: June 30, 2018, or the
volume of 241.86 billion standard cubic feet (BSCF) having been fulfilled;
c. Pertamina/PT Pertagas, which shall expire on the earlier of: March 31, 2019, or the
volume of 221 TBTU having been fulfilled; and
d. PT Indogas Kriya Dwiguna, which shall expire on the earlier of following: February 6,
2021, or the volume of 79.2 TBTU having been fulfilled.
(2) Bentu
a. On May 17, 2005, Bentu entered into an agreement with PT Perusahaan Listrik Negara
(Persero) (PLN) whereby Bentu will supply gas to PLN. The gas supplied will originate
from the Bentu PSC and Korinci Baru PSC fields. This agreement shall be effective when
the following conditions precedent have been fulfilled:
- Bentu has signed the Seller Appointment Agreement with BP Migas,

- Bentu has signed the Trustee and Paying Agent agreement with BP Migas for
transactions in regard to this agreement, and
- PLN has obtained the approval from its shareholders to carry out this agreement.
On December 22, 2006, all conditions having been fulfilled, all parties agreed that the
agreement became effective.
The agreement shall be effective until July 15, 2020, or when the volume of gas supplied
has reached 146 billion cubic feet (BCF), whichever occurs earlier.
b. On October 30, 2007, Bentu entered into a Gas Sale and Purchase Agreement with
PT Riau Andalan Pulp & Paper that shall expire on the earlier of: January 31, 2020, or the
volume of 86.7 BCF having been fulfilled.
(3) Semco
a. On September 30, 2005, PT Pertamina (Persero) signed a Gas Sale and Purchase
Agreement with PT Perusahaan Listrik Negara (Persero) in the amount of 79,026 billion
British thermal units (BBTU) from the Semberah field, which shall end on November 16,
2015, or when total contract volume has been reached, whichever occurs earlier.
45
AND SUBSIDIARIES
b. On July 22, 2008, PT Pertamina (Persero) signed a Gas Sale and Purchase Agreement
with Virginia Indonesia Co LLC (VICO) in the amount of 15 MMSCF per day from
Semberah field (Semco), which shall valid for 1 (one) year from the date of the Gas
Supply Agreement signed on October 24, 2008.
e. Joint Operating Agreement (JOA)
On November 29, 1985, Japan Petroleum Exploration Ltd. (Japex) and Pertamina signed the
PSC Agreement to conduct exploration and production activities in Gebang Block, wherein
each party holds a 50% working interest. Pursuant to the agreement, Japex shall finance the
exploration and production activities both for its portion and that of Pertamina. Thus,
Pertamina agreed to reimburse Japex for its share of operating costs, such recovery being
obtained from oil and gas sales of Pertamina’s share of the Gebang block.
On December 20, 1985, Japex transferred all of its rights and obligations of Gebang Block to
Japex North Sumatra Ltd. (JNS).
In 2002, Costa and JNS signed a Sales and Purchase Agreement regarding the transfer of JNS’
working interest in Gebang Block to Costa. Pursuant to the transfer, Pertamina’s share of cost
recovery was transferred to Costa.
33. CONTINGENCIES
The Company and Subsidiaries’ operations are subject to Indonesian laws and regulations governing
the discharge of materials into the environment or otherwise relating to environmental protection.
These laws and regulations may require the acquisition of a permit before drilling commences, which
may restrict the types, quantities and concentration of various substances that can be released into
the environment in connection with drilling and production activities, limit or prohibit drilling activities
on certain lands lying within wilderness, wetlands and other protected areas, require remedial
measures to prevent pollution resulting from the Company and Subsidiaries’ operations.
The Government has imposed environmental regulations on oil and gas companies operating in
Indonesia and in Indonesian waters. Operators are prohibited from allowing oil into the environment
and must ensure that the area surrounding any onshore well is restored to its original state insofar as
this is possible after the operator has ceased to operate on the site.
Management believes that the Company and Subsidiaries are in compliance with current applicable
environmental laws and regulations.
46
AND SUBSIDIARIES
34. OPERATING HAZARDS AND UNSECURED RISKS
The Company and Subsidiaries’ operations are subject to hazards and risks inherent in drilling for and
production and transportation of natural gas and oil, such as fires, natural disasters, explosions,
encountering formations with abnormal pressures, blowout, cratering, pipeline ruptures and spills, and
which can result in the loss of hydrocarbons, environmental pollution, personal injury claims and other
damage to properties of the Company and Subsidiaries. Additionally, certain natural gas and oil
operations of the Company and Subsidiaries’ are subject to tropical weather disturbances, some of
which can be severe enough to cause substantial damage to facilities and possibly interrupt
production. As protection against operating hazards, the Company and Subsidiaries maintain
coverage for their drilling rigs, equipment and machinery for their replacement value and insure
against third party liability and worker’s compensations. However, they do not insure these assets
against business interruption or loss of revenues following damage to or loss of a drilling rig, except in
respect of an offshore rig where a term of the refinancing for such rig is that insurance coverage be in
place for the benefit of the lender.
35. ABANDONMENT AND SITE RESTORATION OBLIGATIONS
The current estimates for the abandonment and site restoration obligations were determined by
management, not by an independent consultant. Management believes that the obligations as of
balance sheet dates are sufficient to meet the environmental obligations resulting from abandonment
and site restoration.
Movements of abandonment and site restoration obligations based on working interest were as
follows:
2009
Translation
January 1, Additional Deduction Adjustment December 31,
Malacca Strait PSC 133,325,001 2,235,907 - (19,088,839 ) 116,472,069
Kangean PSC 4,428,693 68,809 - (633,551 ) 3,863,951
Total 137,753,694 120,336,020
2008
Translation
January 1, Additional Deduction Adjustment December 31,
Malacca Strait PSC 110,094,616 4,722,251 - 18,508,134 133,325,001
Kangean PSC 28,084,258 - (24,978,352 ) 1,322,787 4,428,693
Total 138,178,874 137,753,694
47
AND SUBSIDIARIES
36. MONETARY ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
At December 31, 2009 and 2008, the Company and Subsidiaries had monetary assets and liabilities
denominated in foreign currencies as follows:
2009 2008
Foreign Currency Equivalent in Foreign Currency Equivalent in

(Full Amount) Rupiah (Full Amount) Rupiah
Assets
Cash and cash equivalent USD 3,363,845 31,620,144 USD 18,747,373 205,283,736
Euro 26,182 353,717 Euro 1,863 28,746
Short-term investments USD 118,600,420 1,114,843,945 USD 127,860,493 1,400,072,403
Trade receivables USD 11,952,766 112,356,005 USD 16,476,173 180,414,099
Other receivables USD 11,822,738 111,133,739 USD 25,268,950 276,695,000
Due from related parties USD 128,184,570 1,204,934,961 USD 135,635,953 1,485,213,693
Restricted funds USD 55,871,093 525,188,270 USD 77,513,131 848,768,788
Abandonment and site restoration fund USD 12,801,704 120,336,020 USD 12,580,246 137,753,694
Total Assets 3,220,766,801 4,534,230,159
Liabilities
Trade payables USD 53,600,106 503,841,000 USD 35,512,747 388,864,577
Other payables USD 44,177,214 415,265,813 USD 30,571,572 334,758,712
Accrued expenses USD 76,593,740 719,981,158 USD 52,415,374 573,948,344
Long-term loan - current maturities USD 250,009,275 2,350,087,185 USD - -
Due to related parties USD 8,037,582 75,553,270 USD 6,501,518 71,191,624
Long-term loans USD 356,455,356 3,350,680,344 USD 581,106,875 6,363,120,275
Abandonment and site restoration
obligations USD 12,801,704 120,336,020 USD 12,580,246 137,753,694
Total Liabilities 7,535,744,790 7,869,637,226
Net Liabilities 4,314,977,989 3,335,407,067
37. NEW ACCOUNTING STANDARDS PRONOUNCEMENTS
The Indonesian Institute of Accountants (IAI) has released revisions to several accounting standards
that may have certain impacts on the consolidated financial statements.
The following revisions are effective for financial statements for the period commencing from on or
after January 1, 2010:
- PSAK 26 (Revised 2009) - Borrowing Costs.

- PSAK 50 (Revised 2006) - Financial Instruments: Presentation and Disclosure.
- PSAK 55 (Revised 2006) - Financial Instruments: Recognition and Measurements.
The following revisions are effective for financial statements for the period commencing from on or
after January 1, 2011:
- PSAK 1 (Revised 2009) - Presentation of Financial Statements.

- PSAK 2 (Revised 2009) - Statement of Cash Flows.
- PSAK 4 (Revised 2009) - Consolidated and Separate Financial Statements.
- PSAK 5 (Revised 2009) - Operating Segments.
- PSAK 12 (Revised 2009) - Interest in Joint Ventures.
- PSAK 15 (Revised 2009) - Investments in Associates.
- PSAK 25 (Revised 2009) - Accounting Policies, Changes in Accounting Estimates and Errors.
- PSAK 48 (Revised 2009) - Impairment of Assets.
48
AND SUBSIDIARIES
37. NEW ACCOUNTING STANDARD PRONOUNCEMENT (Continued)
- PSAK 57 (Revised 2009) - Provisions, Contingent Liabilities and Contingent Assets.

- PSAK 58 (Revised 2009) - Non-Current Assets Held for Sale and Discontinued Operation.
- ISAK 7 (Revised 2009) - Consolidation - Special Purpose Entities.
- ISAK 9 - Changes in Existing Decommissioning, Restoration and Similar Liabilities.
- ISAK 10 - Customer Loyalty Programmes.
- ISAK 11 - Distribution of Non-Cash Assets to Owners.
- ISAK 12 - Jointly Controlled Entities: Non-Monetary Contributions by Venturers.
Moreover, IAI has revoked several accounting standards, the effective dates of which follow the
effective date of the provisions of the other related PSAKs, as follows:
- PPSAK No. 2 - Revocation of PSAK 41 Accounting for Warrants and PSAK 43 Accounting for
Factoring.
- PPSAK No. 3 - Revocation of PSAK 54 Accounting for the Restructuring of Troubled Debt.
- PPSAK No. 4 - Revocation of PSAK 31 (Revised 2000): Accounting for Banking Industry,
PSAK 42: Accounting for Securities Companies and PSAK 49: Accounting for Mutual Funds.
- PPSAK No. 5 - Revocation of ISAK 06: Interpretation of Paragraphs 12 and 16 of PSAK 55 (1999)
on Embedded Derivative Instruments in Foreign Currency Contract.
The Company and Subsidiaries are evaluating the potential impact on the consolidated financial
statements as a result of the adoption of the above new accounting standards.
38. SUBSEQUENT EVENT
a. Rights Issue II (RI II)
On February 16, 2010, the Company has completed the RI II to shareholders, in connection with
the issuance of Hak Memesan Efek Terlebih Dahulu (HMETD), totaling 26,183,297,040 shares
with par value Rp100 (full amount) per share, which were offered with the price of Rp185 (full
amount) per share, thus totaling to Rp4,843,909,952,400 (full amount).
From the proceeds of RI II, some has been used to repay part of the principal of the Senior and
Junior Loans amounting to USD250 million and the financial costs associated with the loan in the
amount of USD41.3 million, which was in accordance with the plans as stated in the prospectus.
Proforma summary of the Company’s consolidated financial statements if this transaction had
occurred on December 31, 2009 was as follows:
Proforma Summary
of Consolidated
Financial
Statements
Current assets 3,326,962,028
Non - current assets 9,129,726,635
Total Assets 12,456,688,663
Current liabilities 2,019,724,109
Non - current liabilities 4,108,242,732
Total liabilities 6,127,966,842
Equity 6,295,665,670
Net sales 1,444,368,739
Net loss 1,782,195,408
b. Long-term loan of Subsidiary IMG from PT Bank Permata Tbk was repaid on January 26, 2010.
49
AND SUBSIDIARIES
39. COMPLETION OF THE CONSOLIDATED FINANCIAL STATEMENTS
The management of the Company is responsible for the preparation of these consolidated
financial statements that were completed on March 17, 2010.
50
AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION (UNAUDITED)
DECEMBER 31, 2009 AND 2008
RESERVE ESTIMATION
The following information on gross proven developed, undeveloped and probable reserve quantities are estimates only, and do not purport to reflect realizable
values or fair market values of Subsidiaries’ oil and gas reserves. The Subsidiaries emphasize that reserve estimates are inherently imprecise; accordingly, these
estimates are expected to change as future information becomes available. There are numerous uncertainties inherent in estimating oil and gas reserves
including many factors beyond the control of the Subsidiaries.
Management believes that the reserve quantities shown below are reasonable estimates based on available engineering and geological data, as follows:
1) 2) 3) 4) 5) 6) 7)
Malacca Strait Kangean Gelam Semberah Gebang Korinci Bentu
Crude Oil, Crude Oil,

Gas and Gas and Gas and
Crude Oil *) Condensate *) Crude Oil Crude Oil Crude Oil *) Gas Gas
MBOE MBOE MBOE MBOE MBOE MBOE MBOE

Proven developed, undeveloped dan probable reserves
Balance as of January 1, 2008 32,460 240,513 4,876 21,586 900 12,238 48,273
Revision to previous estimation 7,420 (375 ) (1,473 ) (1,132 ) 5,693 - -
Production during the period (3,281 ) (2,080 ) (72 ) (1,060 ) (122 ) (1,043 ) -
Balance as of December 31, 2008 36,599 238,058 3,331 19,394 6,471 11,195 48,273
Balance as of January 1, 2009 36,599 238,058 3,331 19,394 6,471 11,195 48,273
Production during the period (3,348 ) (2,315 ) (180 ) (871 ) (90 ) (968 ) -
Balance as of December 31, 2009 33,251 235,743 3,151 18,523 6,381 10,227 48,273
Proven developed dan undeveloped reserves

Balance as of January 1, 2008 28,049 132,285 747 5,734 - 2,304 23,602
Revision to previous estimation 4,731 (6,998 ) 256 3,258 3,292 - -
Production during the period (3,281 ) (2,080 ) (72 ) (1,060 ) (122 ) (1,043 ) -
Balance as of December 31, 2008 29,499 123,207 931 7,932 3,170 1,261 23,602
Balance as of January 1, 2009 29,499 123,207 931 7,932 3,170 1,261 23,602
Production during the period (3,348 ) (2,315 ) (180 ) (871 ) (90 ) (968 ) -
Balance as of December 31, 2009 26,151 120,892 751 7,061 3,080 293 23,602
*) Units for gas and condensate have been converted from Billion Cubic Feet (BCF) and Million Barrels of Oil (MMBO) to Thousand Barrels Oil Equivalent (MBOE).
51
AND SUBSIDIARIES
SUPPLEMENTARY INFORMATION (UNAUDITED)
DECEMBER 31, 2009 AND 2008
RESERVE ESTIMATION (Continued)
1) Estimated oil and gas reserves in the Malacca Strait Block as of January 31, 2008, were certified by Gaffney, Cline and Associates (GCA), independent
petroleum engineering consultants in their report dated May 26, 2008.
2) Estimated oil and gas reserves in Kangean Block were certified by:
• Gaffney, Cline and Associates (GCA), independent petroleum engineering consultants, as of January 31, 2008, in their report dated May 26, 2008 for
the Pagerungan Field, Pagerungan Utara Field, Rancak Field and Sepanjang Field;
• Sproule International, independent petroleum engineering consultants, as of July 31, 2006, in their report dated November 3, 2006 for the Terang
Field, Sirasun Field and Batur Field.
3) Estimated oil and gas reserves in Gelam Block as of January 31, 2008 were certified by Gaffney, Cline and Associates (GCA), independent petroleum
engineering consultants in their report dated May 26, 2008.
4) Estimated oil and gas reserves in Semberah Block as of January 31, 2008 were certified by Gaffney, Cline and Associates (GCA), independent petroleum
5) Estimated oil and gas reserves in Gebang Block as of January 31, 2008 were certified by Gaffney, Cline and Associates (GCA), independent petroleum
6) Estimated oil and gas reserves in Korinci Block as of September 2005 were certified by Malkewicz Hueni and Associates (MHA), independent petroleum
engineering consultants in their report dated September 13, 2005.
7) Estimated oil and gas reserves in Bentu Block as of September 2005 were certified by Malkewicz Hueni and Associates (MHA), independent petroleum
engineering consultants in their report dated September 13, 2005.
52
62
PT Energi Mega Persada Tbk
Bakrie Tower 32nd Floor

Rasuna Epicentrum
Jl. HR Rasuna Said
Jakarta 12960
Indonesia
P +62-21 2994 1540

F +62-21 2994 1541
www.energi-mp.com

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ANNUAL REPORT 2009

Annual Report 2009 EMP

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Annual Report 2009 EMP

Sumatera Java Kalimantan

Annual Report 2009 EMP

Annual Report 2009 EMP

Financial & Operational Highlights

(in billion Rupiah, except EPS and

Revenue 1,444.4 1,859.1 1,137.5 1,459.5 1,423.6

EBITDA 107.0 863.3 350.2 190.1 599.3

Profit Before Tax (1,417.5) 18.6 (51.8) (283.8) 138.8

Income Tax (314.9) (55.5) 167.4 20.4 (14.6)

Net Profit (1,729.5) (34.9) 115.6 (263.4) 123.2

Earnings Per Share (EPS) (120.1) (2.4) 8.0 (18.7) 12.9

Total Assets 10,252.4 12,626.6 9,374.8 8,773.8 6.512,8

Net Debt 4,011.6 3,883.7 1,991.8 4,194.8 2,895.2

Equity 1,741.4 3,711.2 3,352.2 1,894.7 1,176.7

Net Profit Margin (120) (2) 10 (18) 9

ROE (99) (1) 3 (14) 10

ROA (17) (0) 1 (3) 2

Net Debt/Equity 230 105 84 221 246

Interest Coverage Ratio 8 114 110 75 358

Current Ratio 47 182 62 186 117

Total Liability to Equity 487 239 180 363 453

Total Liability to Assets 83 70 64 78 82

Product Price RealiSations

2009 2008 2007 2006 2005

Annual Report 2009 EMP

Production Performance (EMP working interest)

2009 2008 2007* 2006* 2005*

Oil Production (bopd)

Malacca Strait PSC 5,548 5,424 5,087 5,554 5,643

Kangean PSC 1,064 162 915** 547 773

Gelam TAC 492 197 322 339 -

Semberah TAC 852 917 752 455 -

Gebang JOB PSC 24 30 27 49 -

Total 7,979 6,729 7,107 6,950 6,423

Oil Production WI volume (mmboe) 2.9 2.5 2.6 2.5 2.3

Gas Sales (mmcfd)

Malacca Strait PSC 14 10 6 0 0

Kangean PSC 16 19 29** 58 81

Gebang JOB PSC 1 1 1 2 -

Korinci Baru PSC 16 17 6 0 -

Total 59 62 55*** 79 107

Gas Production WI volume (mmboe) 3.6 3.8 3.4 4.8 6.5

* 2005-2007 data includes Brantas PSC which was divested in 2008.

Annual Report 2009 EMP

2009 Year End Proforma Net Reserves and Resources

(mmboe) 1P 2P 3P Contingent Resources*

Malacca Strait PSC

Gas 60 113 157 6

Korinci Baru PSC

Gebang JOB PSC

Oil 22.5 39 102 4

Gas 88.3 182 290 88

Grand Total 110.8 221 392 92

Net Reserves and Resources

(mmboe) 2009 2008 2007 2006 2005

(based on year spudded) 2009 2008 2007 2006 2005

Note: all exploration wells includes appraisal wells