Possible FSRU announcement due soon. Unsure about the details at this point in time.

Always funny how Bumi Armada has a high beta (influenced by oil price fluctuations) when in reality, the business operations and profitability is not impacted by the day to day oil price swings.

Nothing that we don't already know about. Salam-Patawali (Malaysia), Tuna (Indonesia) and Kelidang (Brunei) are all bid prospects for Bumi Armada but nothing definitive.

Meanwhile, the purported FPSO + FLNG for the Akia field are still years away. I've spoken with people within the industry, even if Bumi Armada and Pexco initiate exploration campaigns later this year, FID will only be achieved in 2 years time. Most likely, if ever Akia field materialises, the first oil at the earliest will be at or around the year 2030. Still a long time to go.

Southeast Asia’s #FPSO market remains buoyant with several tenders for FPSO vessels under way or expected to hit the streets this year to exploit both gas & oil assets.

But floater projects in the region could find themselves in competition with field developments elsewhere that also require FPSOs.

The Southeast Asian FPSO opportunities are expected to appeal to the likes of the Malaysian contractors #BumiArmada, #MISC, #Yinson and MTC, as well as India’s Shapoorji Pallonji Energy, Oslo-listed #BWOffshore and Netherlands-headquartered Bluewater Energy Services.

Malaysia itself likely will have at least two FPSO opportunities, with potential for a third;

- #ConocoPhillips is advancing its plans for an FPSO to exploit its Salam and Patawali oil discoveries on Block WL4-00 offshore Sarawak, East Malaysia. ConocoPhillips has been in talks with floater contractors including Bumi Armada, MISC, Yinson, Bluewater and BW Offshore. Technical studies, followed by #FEED, are envisaged for this FPSO contract, with the operator said to be eyeing first oil as early as 2026 if it can secure a redeployment (a timeline that could prove ambitious if ConocoPhillips opts for a novel floater based on a tanker conversion.)

- #PTTEP is looking for an FPSO to replace the ageing unit on its Kikeh oilfield offshore Sabah. The current charter of which expires in January 2028.

- the 3rd, IF #PetronasCarigali were to revive its stalled deep-water Limbayong-Bestari project offshore Sabah as a floater-based development.

Elsewhere in South East Asia region,

- FPSO for ultra-deepwater Kelidang field offshore Brunei Darussalam. Late last year ITB documents has been issued to several FPSO contractors for a leased floater with gas handling capacity of up to 450 million cubic feet per day and the ability to handle small quantities of condensate. Submission due in May 2024 and the contract award is expected later this year.

- #Inpex requires a very large FPSO for its Abadi natural gas project in the remote east of the Indonesian archipelago. This will be a newbuild vessel, which is likely to be owned and operated by Inpex and its partners. Inpex is understood to have held a pre-Q meeting late last year with prospective bidders for the Abadi FPSO.

- Also offshore Indonesia, #HarbourEnergy wants an FPSO to exploit its Tuna oil and gas discovery, located near the maritime border with Vietnam. Front-end engineering and design work for Tuna could commence this year but the exact timing of this floater tender remains unclear, as Harbour moves to bring onboard a new partner or partners to replace the departing Zarubezhneft of Russia.

- Another FPSO could also be on the cards for Thailand if US supermajor #Chevron finally gets its on-off Ubon gas condensate project off the drawing board.

- Indonesia, Akia PSC in Tarakan Basin, Bumi Armada and Pexco have formed a 50:50 JV. Its informed that Bumi will provide FPSO and FLNG units.

https://www.upstreamonline.com/focus/fpso-market-remains-buoyant-in-southeast-asia/2-1-1580573

Any idea on the status of W Hotel transaction?

On TGT, Revised Field Development Plan (“RFDP”) approved by MOIT on 9 January 2024.

Planning underway for a two-well TGT drilling programme, expected to commence 2H 2024.

----------------

Thank you for your email. As you may be aware, Vietnam recently enacted a new Petroleum Law on 1 July 2023 which aimed to enhance the approval procedures for implementation of petroleum activities. Under this Amended Law, Field Development Plans no longer need to be submitted to the Prime Minister for consideration, and final approvals can be obtained from MOIT.



While the new Petroleum Law was coming into effect, Pharos’ TGT RFDP was being put in front of MOIT for consideration, and was then submitted to the Deputy Prime Minister for approval, as reported in our Preliminary Results statement on 13 September 2023. In 4Q 2023, the Deputy Prime Minister had decided to delegate this responsibility back to MOIT. This approval was then granted by MOIT on 9 January 2024, as stated in our Trading & Operations Update earlier this week.



The recent approval from MOIT is the final stage of the process. The drilling of two TGT wells, as agreed in the TGT RFDP, is expected to commence in 2H 2024.

Begun, the end has.

@Eden I've been attending Pharos investor meets and asking questions. The TGT FPSO extension is pretty much a done deal till 2026.

There will also most likely be an extension to 2031, but subject to them getting a 5 year license extension from the Vietnamese government.

The TGT FPSO extension will be invaluable and might be a small boost to the share price when announced.

Let that sink in for a moment, guys!

2015 to 2024....we only secured once project. Armada Sterling V FPSO in India, and that too only as a minority partner with 30% stake.

I have they have a f2f AGM this year. I wanna see Gary in the eye. If I am still holding my shares at that point in time lah!

From my sources, I gather that Bumi Armada is plagued by incompetency at the moment. Hence, they are unable to secure any new contracts.

They have lost Cameia FPSO to Saipem despite completing the FEED and getting a Conditional LOA (CLOA).

They have also lost Grain Power Plant in the UK as a customer for their CCS / FCSIU.

From what I gather, no active FPSOs being bid for.

There are a few smaller gas FEEDs ongoing. Two tenders for FSRU (one as a JV partner).

Seems like bleak times lie ahead.

@Robert, I have no direct knowledge of Bumi Armada's active participation in the Abadi field. However, I do know they're working on a mystery carbon capture injection system for a gas field in Indonesia. Could this be what it's referring to?

From one of their recent press releases:

"Drawing from this experience, Bumi Armada is currently engineering a carbon capture injection system for a gas field in Indonesia."

Source: https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=140265&name=EA_GA_ATTACHMENTS

Acceptance tests usually take 3 to 6 months. The most recent FPSO to hit first oil was rather infamously, the Armada Kraken acceptance tests was a shitshow and hope no such repeat this time.

Hopefully we hear some good news soon from the Caspian sea regarding the two subsea construction (SC) vessels. Either them securing new work, or disposed off to prevent any further bleeding and help with paring down the debt levels even further. The vessels have been out of work since Q1 2023.

Honestly I don't think Bumi Armada is going to be a dividend play any time soon. If that's what you're looking for, look elsewhere. Soon as they can win some firm contract(s), they'll be taking on more debt to grow the business.

Thank you, good sir!

Seems like UOB has a research update following the Armada Sterling V "first oil". Can anyone share the pdf of the research report please. Much appreciated!

Felix they always announce first oil, check the historical announcements on Bursa. But always delayed by a few days, in the mean time the price has run up due to insiders buying.

We have an official announcement from ONGC to the Bombay Stock Exchange, but nothing from Bumi Armada (as usual/expected) to Bursa Malaysia about this milestone.

https://www.bseindia.com/xml-data/corpfiling/AttachLive//183acd19-41de-476c-99c9-47198bb27fa2.pdf

India’s state-controlled Oil & Natural Gas Corporation (ONGC) has kick-started oil production from its much-delayed flagship deepwater project in the Krishna Godavari basin offshore the nation’s eastern coast.

ONGC on Sunday confirmed the development and said that it has achieved “first oil production from the deepwater KG-DWN-98/2 block, situated off the coast of Bay of Bengal.”

The Indian giant noted that with the commencement of oil production from the 'M field' in the deepwater block, it has completed the project’s second phase of development.

“The flagship project is on track with final phase of the project planned to be completed by June and then onwards commencement of gradual ramping up to reach planned peak production of 45,000 barrels of oil per day and 10 million cubic metres per day (MMcmd) of gas from the deepwater KG-DWN-98/2 block,” it added.

However, ONGC did not reveal the initial oil production level achieved from the offshore asset.

https://www.upstreamonline.com/production/ongc-fires-up-oil-production-from-flagship-deepwater-asset/2-1-1579895

It is done. First oil has been achieved at Armada Sterling V!

Expect some very good news by tomorrow if no other issue crops up. Armada Sterling V will achieve first oil imminently within the next 24 hours.

@ITreeinvestor what's the relevance to Bumi Armada?

According to my sources, the Armada Sterling V is once again ready to receive first oil. Awaiting for ONGC side now. Unknown as to how long this may take, but should be soon. Fingers crossed no more mishaps now!

A sad and quiet end to the year. Here's to hoping there is a lot more positivity to come next year.

From what I gather, the Armada Sterling V is undergoing pre-commisioning works once again. The target remains to achieved first oil in the 2nd week of the new year.

IOI Properties on shopping spree, eyes Tropicana Corp’s retail and hospitality assets

IOI Properties Bhd signed a sale and purchase agreement last week to buy W Kuala Lumpur from Tropicana Corp Bhd for RM270 million. However, the two companies have yet to end talks as two more assets have been put on the negotiating table. IOI Properties is said to be keen on buying Tropicana Gardens Mall in Kota Damansara, Selangor, and Courtyard by Marriott Penang, which together are valued at between RM800 million and RM1 billion.

https://theedgemalaysia.com/node/693558

From checks with my sources, Armada Sterling V is being repaired. One faulty pump is being replaced while another will arrive by the end of this week.

Tentatively, they're looking at attempting first oil in the 2nd week of January 2024.

Take everything with a large pinch of salt (yet keep your fingers crossed at the same time) as the project has been beset with never ending delays.

What do you mean? I've never received any warning of any sort for cancelling unfulfilled orders.

"In Cluster-II, commercial production from one gas field has already commenced from March 2020 and commercial production of crude oil is scheduled for May 2024In Cluster-II, commercial production from one gas field has already commenced from March 2020 and commercial production of crude oil is scheduled for May 2024. The project is likely to achieve full completion by 2024."

Source: https://energy.economictimes.indiatimes.com/news/oil-and-gas/ongc-to-start-commercial-oil-production-from-kg-block-in-may-2024-minister/105726514#:~:text=3%20min%20read-,ONGC%20to%20start%20commercial%20oil%20production%20from%20KG%20block%20in,have%20been%20clubbed%20into%20clusters.

According to my sources, the Dec 2023 first oil date as stated in ONGC LinkedIn is very tight, internally they are looking at mid Jan 2024 to receive the first oil.

I think the minister's statement in Indian Parliament has caused some confusion, not sure why he said proeuction to commence in May 2024.

Yinson is not necessarily a better buy. For starters, it is not "cheap" as there is a lot of expectations baked into the share price already (quite the opposite as Bumi Armada). And there is considerable project execution risk as they are concurrently working on 3-4 FPSOs.

While Yinson may yet turn out to be a decent investment, the "easy money" has been made.

@Dehcomic01

Sometimes things are not as they seem. As things stand, Bumi Armada's ROE and EPS is "high" but if you look into the future based on their firm contracts, this is only temporary. From Y2025 onwards, the ROE will start falling as the TGT, Sterling II and Kraken FPSO contracts expire. The Kraken contract is a key turning point as even if it is extended into the option period, it will be at a significantly lower day rate (though partially mitigated by lower borrowing/depreciation expenses as well).

And Bumi Armada's ROE and EPS will fall off a cliff in 2030 when the Olombendo FPSO firm contract period ends (even if it is extended into the option period, the profitability will be significantly lower).

2 to 3 years ago, when the share price was under 30 sen and the ROE/EPS started recovering strongly, Bumi Armada was a great buy. The Kraken turning point in Y2025 still seemed far away, there seemed to be time to lock-in a large scale FPSO contract in the mean time to replenish the orderbook.

Yet the years have passed and Bumi Armada has pretty much exited the profitable FPSO business due to reputational and skillset issues. Now they have turned the focus to the green space (FSRU, FLNG, FSCIU) but there's nothing to show and the profitability will unlikely be as good as FPSOs.

Add to that, the delays with Armada Sterling V, the one small glimmer of growth. And we have a dud.

Mind you, Bumi Armada is still a decent buy at 50 sen. Heck I'm holding more than half a million shares and haven't sold (in fact I added during the Kraken fiasco). But it's not hard to see why Bumi Armada's valuation is undemanding in the market.

As far as hidden value goes, Bumi Armada doesn't have much of it any longer. So the only thing any of us can do, is hope that they win new contracts (and win them soon!) and their current contracts see lengthy extensions.

TLDR: Ignore the high ROE, low P/B and low P/E ratios. They don't give the full picture, and if you buy into Bumi Armada right now just based on that premise, things may not go so well.

Interestingly, according to my sources, the first oil date remains as January 2024. They've identified the issue and are working to resolve it. Let's wait and see.

EVEBITDA you are wrong on one count. Not sure where you get the idea that Armada Sterling V will not be contributing any cashflows to Bumi Armada during the initial 9 year firm charter period. The cashflows will come from the dividend or redemption of preference shares (the method used for Armada Sterling 1/2/3).

Yes it won't be scrapped but it might be delayed indefinitely. Just like what's been happening now. Initially due to start Sep 2021 but delayed to May 2022 due to Covid. That is understandable. But then it kept getting pushed back. To Dec 22, then Apr 23, then May 23, then Aug 23, then Oct 23, then Nov 23, then Dec 23 and now May 24.

Such a lengthy delay out of the blue must mean that there are teething or even terminal problems.

This means that the FPSO would be idle from Dec 2022 to May 2024. How would this impact the production systems? Would they corrode or degrade after such a lengthy time of not being used?

I say, be prepared to write-off Armada Sterling V FPSO.

A pump of some sort had failed abroad the FPSO.

Woah what a shit show. It is highly likely the issue is related to the FPSO to some degree. As they were all ready to receive first oil last month and there was equipment failure on the FPSO.

@Rohank regardless, the extended delay is a net negative to Bumi Armada. This new project should be contributing around RM120m in net profits per year for the 30% stake, equivalent to 2 sen per share. This was supposed to be a growth catalyst, albeit a small one, to a record-breaking profit year next year.

If the issue with Armada Sterling V is terminal, then yes Bumi Armada's direct losses may be limited to the US$30mil (which itself is some RM140mil, not an altogether small sum), but it will impact the future profits and the company's reputation adversely.

@i3lurker there is always a possibility the FPSO will never be functional. I hope Bumi Armada doesn't take part in a project with minority stake in the future. Too much as risk when they need to depend on the expertise of others.

@Agreetkumar I suggest to exclude standby DCR as the issue seems to be with the FPSO, so they won't be getting any standby DCR while the delay persists.

I have some very bad news people. Armada Sterling V first oil has been further delayed to 15/01/2024 at the earliest. Possibilities of subsequent delays remain as they're dealing with some teething issues that might take a while to understand and resolve.

With Bumi Armada, expect the unexpected.

Seems like some heavy selling....

There might be an issue with a water injection pump onboard one of the producing FPSOs. Hearing something about it. However, I'm unsure if the impact is material and if that's what's driving the price lower.

By right, if there's any material impact to production arising from equipment failure, Bumi Armada needs to make announcement to Bursa Malaysia.

Beautiful!

Anything can happen. Expect the unexpected. There's also a chance the FPSO might just never produce, the way things are going. Incompetence. These things can only happen in India.

First oil delayed to around Dec 15th