Showing posts with label UMW O&G. Show all posts
Showing posts with label UMW O&G. Show all posts

Thursday 19 July 2018

Uncertainty surrounds UMWOG’s HWU utilisation

Uncertainty surrounds UMWOG’s HWU utilisation
January 18, 2018, Thursday


KUCHING: While analysts are mildly positive on UMW Oil and Gas Corporation Bhd (UMWOG) securing ane umbrella contract to provide hydraulic workover units (HWUs) to Petronas Carigali Bhd, uncertainty lies in its HWU utilisation rate.

In a corporate update, AmInvestment Bank Bhd (AmInvestment Bank) said the umbrella contract could involve the use of all or any of UMWOG’s five HWU units – UMW Gait 1, UMW Gait 2, UMW Gait 3, UMW Gait 5 and UMW Gait 6 – to undertake workover services.

“The contract, which commenced on December 22 last year, is under an umbrella framework which may comprise of a series of individual orders and call-out.

“However, at present, there has not been any call-out or work order which will be made at stipulated prices for those HWU services,” it guided in the update.

Due to this uncertainty of utilisation, the HWU segment currently registered losses for the group due to its units being largely idle over the past year, and contributes to the ongoing losses for the group.

Looking beyond the HWU segment, the group’s full rig utilisation rates and margins remained a large concern.

“Separately, even at near full rig utilisation of 90 per cent in the third quarter of financial year 2017 (3QFY17), UMWOG still suffered a minor core loss of RM14 million.

“As there will be three rigs out of charter in 1QFY18 or an utilisation rate of 60 per cent, we expect a resumption of losses for the group,” said the bank.

Similarly, Hong Leong Investment Bank Bhd (HLIB Research) also reported a resumption of losses for UMWOG in FY18-19 with forecasted profit after tax and minority interests (PATAMI) of RM102 and RM71 million loss respectively.

While UMWOG has guided that there may be 12 rig charters expected to materialise in 2018, AmInvestment Bank argues that these may be short-term charters to replace current contracts which are expiring in 2018.

Even with full utilisation at current day rates, the bank said UMWOG would only be barely breaking even, notwithstanding the group’s efforts to draw further cost efficiencies with a stronger credit profile amongst suppliers and financeiers.

“Hence, we do not expect any near-term re-rating for the stock,” said the bank.

With that said, AmInvestment Bank has decided to downgrade their recommendation on UMWOG to ‘sell’ from ‘Hold’ as its share price has rebounded above their unchanged fair value of RM0.30 per share.

Meanwhile, HLIV Research is maintain its ‘hold’ call with an unchanged target price of RM0.40 as the group’s completion of rights issue and removal of debt maturity overhang risks are expected to provide a catalyst for share prices while earnings outlook appear more encouraging in 2018.


http://www.theborneopost.com/2018/01/18/uncertainty-surrounds-umwogs-hwu-utilisation/

Thursday 13 March 2014

HwangDBS maintains 'buy' on UMWOG

HwangDBS Research has maintained a 'buy' call on UMW Oil & Gas Bhd (UMWOG), with an unchanged target price of RM5.15.

This is based on the almost completion of its jack-up rig called Naga 5, which is being built at Keppel's yard in Singapore, and the company is in talks for longer charters for the jack-up rig beyond its first assignment for Nido Petroleum Philippines Pty Ltd.
In its research note, HwangDBS said UMWOG will be able to receive the Naga 5 jack-up rig by May this year, ahead of its first assignment for Nido Petroleum, which will commence operations in June.
"This is a six week job worth US$7 million to drill the Baragatan prospect on behalf of the SC 63 joint venture. Concurrently, UMWOG is in negotiations with prospective parties to secure a long-term charter for Naga 5," it said.
Apart from Naga 5, HwangDBS said UMWOG is in line to take delivery of Naga 6 jack-up rig by September 14, Naga 7 (December 14),  and Naga 8 (September 5) this year.
"While there's some sceptism over issues such as the built quality and timely delivery of its Naga 6 and Naga 7 jack-up rigs, which are being built in China, such concern will be allayed once it (UMWOG) secures charters.
"Given the inherent demand for new, premium jack-up rigs, we are confident of these rigs being chartered," HwangDBS said.
HwangDBS also said its forecasts on UMWOG are unchanged and continue to view the company as a growth stock, with sound financial and operating acumen to capitalise on the prospects of jack-up rigs in Southeast Asia over a five-year horizon
"It is the only Malaysian entity that has the track record and in-house crew competencies in the drilling space. We opine that new jack-up orders beyond Naga 8 will likely be done from 2015 as UMWOG balances growth with balance sheet disciplines, unless a new unit is available with a contract in hand," it said.
13.3.2014

Read more: HwangDBS maintains 'buy' on UMWOG - Latest - New Straits Times http://www.nst.com.my/business/latest/hwangdbs-maintains-buy-on-umwog-1.510735?cache=%2F%2Fwp-login.php%3Fpage%3D0#ixzz2vqSXcQwZ

Thursday 7 November 2013

UMW O&G to tap into regional energy demand


Posted on October 28, 2013, Monday

KUCHING: UMW Oil & Gas Corporation Bhd (UMW O&G) hopes to continue tapping into the region’s growing energy demand.

Currently, Asia accounts for 39 per cent of global energy consumption, which Douglas Westwood expects to rise incrementally over the next twenty years from 2011 to 2030, says non-independent executive director and president Rohaizad Darus.

“This clearly places us in a favourable environment,” he told The Borneo Post via email.

“We are proud to potentially be the biggest initial public offering (IPO) in Malaysia this year and we hope this reflects the great trust and commitment that is placed in us by not only the investment community, but the business community and industry as a whole.”

UMW O&G is due to be admitted to the Official List of the Main Market of Bursa Malaysia Securities Bhd on November 1, 2013 and will have a market capitalisation of approximately RM6.1 billion upon listing.

“As a listed company, we are looking forward to taking all opportunities presented to us to increase our value to our shareholders, customers and partners,” he added.

With regards to Sarawak in particular, Rohaizad said currently the group does not have any operations, but added that, “We are always interested in new regions and opportunities subject to close evaluation and will of course monitor the region as part of our post-IPO expansion plans.”

The group currently hold a seven per cent and 11 per cent market share in Southeast Asia in offshore drilling and workover services respectively.

“In Malaysia we have 21 per cent and 36 per cent of the market share in offshore drilling and workover services respectively.

“We have a strong backlog which, as of June 30, 2013, totalled approximately RM1,471.3 million.”

The firm also has plans to establish the UMW Drilling Academy, which is expected to be in operation by early next year to train more people to ensure a continuous supply of skilled personnel to feed into the group’s expansion plans.

On October 18, UMW O&G’ IPO to the Malaysian public comprising 43.24 million issue shares has been oversubscribed and the balloting of successful applications was conducted.

Subsequent to the close of the institutional offering to Malaysian and foreign institutional and selected investors (institutional investors), including Bumiputera investors approved by the Ministry of International Trade and Industry, the institutional price has been fixed at RM2.80 per share on October 18, 2013.

Accordingly, the final retail price for the IPO shares under the retail offering was also fixed at RM2.80 per share.

As the Final Retail Price equals the retail price as set out in the Prospectus dated October 3, 2013 issued by UMW Oil & Gas Corporation Bhd, there will be no refund to be made to the successful retail applicants.

Based on RM2.80 per share, UMW O&G’s IPO will be the largest IPO in Malaysia thus far this year, with its RM2.36 billion offering attracting substantial interest from international and Malaysian investors alike, evidenced by its institutional book being oversubscribed by approximately 55 times.

Commenting on the progress of the IPO process thus far, Rohaizad said, “We are extremely pleased and honoured that the investment community has been so supportive of our IPO plans and I truly feel that this represents the great confidence investors have in UMW O&G.

“Upon achieving our plans to list, we will strive to live up to investors’ expectations and continue to provide value and growth to our stakeholders and new shareholders as a listed entity.”

UMW O&G’s proposed listing has attracted a strong network of cornerstone investors, 21 of which who have agreed to purchase an aggregate of 399,000,000 shares, representing 18.5 per cent of the enlarged issued and paid-up share capital of UMW O&G.


Read more: http://www.theborneopost.com/2013/10/28/umw-og-to-tap-into-regional-energy-demand/#ixzz2jyI61ORY