Posted by marlboroman2 > 2 months ago | Report Abuse

As long as there is no impairment on Brent Oil price at USD 80 per barrel, BA should theoretically head on to 80 sens TP.

Posted by Robert Waters > 2 months ago | Report Abuse

There is certain truth to it that the public should know when net book value of the asset exceeds current value in use due to the higher interest rates. This discounting of Future Payments at 8.5% result in lower valuation. The interest rates changed, hence the disclosure. Nothing to do with option charter - it was known for years.

However, Greedy Gary made a spectacle out of it. He could have kept it in asset valuation rather than allowing to crash earnings. But that is Greedy Gary, he has only one concern, his free shares. Price fluctuation do not concern him.

Posted by Robert Waters > 2 months ago | Report Abuse

My thanks to marlboro man. Let us make things simple. Those depreciation models give investors headache. Me inclucing.
To RM0.80 target price based on our internal, i3 forum projection.

Posted by marlboroman2 > 2 months ago | Report Abuse

Yes, Robert, life is suppose to be simple, and that triangle drawing (VIU vs NBV) with yellow shades confuses my simple mind i.e. can't make any sense of it. Anyway, cash is king and BA's cash flows looks solid so we continue to wait and see

Posted by proudbeggar > 2 months ago | Report Abuse

Just like that, it was announced a half billion (RM 514.4m) write off or write down in the value of Kraken & SC assets, apparently due to " caused by accounting depreciation recognised
on a straight-line basis and the reduction in the charter revenue during the optional
extension period" which was already known from the beginning and therefore should have been provided for. This half a bln bucks 514m writeoff is more than half the pre-adjusted 4 quarters profit of 883 ( +386 4qtr 497 b/f 3qtr). Not a very plausible answer.

Posted by proudbeggar > 2 months ago | Report Abuse

And it will go into the official BAB 2023 Annual Report. "What kinda depreciation accounting is this " should be asked by the external Auditors.

Posted by Felix888999 > 2 months ago | Report Abuse

Out of sudden the BA accountant realized the straight line depreciation method is wrong after running that FPSO for 8 donkey years. All of their FPSOs could have the same problem.

Mana sekolah this accountant? Accountant from ah beng workshop?

Posted by nikicheong > 2 months ago | Report Abuse

Shoplot accountants the lot of them.

Need to ask their CFO who pronounces millions as "minions"

Posted by Felix888999 > 2 months ago | Report Abuse

Ba-ba-ba-ba-ba-na-na
Ba-ba-ba-ba-ba-na-na
Banana-ah-ah
Potato-na-ah-ah
Banana-ah-ah

Adui Potato and Banana accountants we have in BA.

Posted by nikicheong > 4 minutes ago | Report Abuse

Shoplot accountants the lot of them.

Need to ask their CFO who pronounces millions as "minions"

Posted by Robert Waters > 2 months ago | Report Abuse

This devaluation of vessel applies to every bond. When interest rate changes, bond can lose half of its value.
That is why they declare them 'held to maturity' and do not mess with the bond market value at the moment of given interest rate.

That is what BAB should be doing. Avoid scaring investors. Stick to project linear data model.
You would only change it if you want to sell the vessel (or bond), or get financing for it.

Posted by nikicheong > 2 months ago | Report Abuse

https://cdn.qr-code-generator.com/account32835038/44091251_1.pdf?Expires=1709370957&Signature=C9wTXL3GiCO9f-UwZR-5f79ik0NY279iL~C8gRWDuyW5FFJ0yYjbCTFIFwEvFigL3atZNjIzsI6yMpTqjPMhGTyftNCidbbHQoNvAraA5640lYKJ1xn1ZPAp43Br6KocbPlBJT2PFjO5JTsoXe2-NG78UvPvQAfLDUifEVnfNIELk8KVLffwWnGBmaPfP~OJGr1w0YadepSMZwA6qT8kse7ch9O-fpL3XRUhEh8OJFsnrwCictCsOm4s--5ziHyErhVPYmY0IPJGc23KI82fQ7uiDAlFQt3rBZreqetNbzjqo-1R1MWaA1c1me1eiseNkKHHsnNo38SdAmPTM-QQZg__&Key-Pair-Id=KKMPOJU8AYATR

Posted by Felix888999 > 2 months ago | Report Abuse

Buckle your sitbelt for another dumping if Armada Sterling V not able to get the final acceptance. The FPSO still not running at full capacity because of client`s wells readiness. You know typical client behavior, Taichi it to the vendor first. 😂😂😂


This company don't know no luck or management problem.

Posted by ITreeinvestor > 1 day ago | Report Abuse

On a positive note, its Armada Sterling V 98/2 has achieved first oil in January 2024 and is looking forward to achieving first gas by April 2024

Posted by nikicheong > 2 months ago | Report Abuse

Some bad news. According to my sources, Armada V Sterling is not going to attempt the final acceptance test anytime soon. There are still a lot of things pending.

For starters, the gas train has yet to be commissioned.

Final acceptance preparations will only begin after that.

They only said that acceptance will happen this year, maybe even towards the end of the year only.

Posted by nikicheong > 2 months ago | Report Abuse

Some of the analysts were quite optimistic that acceptance will happen in April 2024, zero chance of that. Earliest looks to be Q3 2024 if all goes to plan.

Posted by rohank71 > 2 months ago | Report Abuse

as I have repeatedly say ASV is just an associate. the Q4 numbers is without ASV...yet BA achieved highest operating profit. ASV is just a small number to BA. let's not bark on the wrong tree.. if BA can produce same Q4 results (ex impairment obviously)...in Q1 surely we r at 65sen band .. ASV is just a branding purpose.

Posted by Felix888999 > 2 months ago | Report Abuse

Yes in theory the contribution of ASV is small but this is the only new project that Armada is working on since the Kraken. If this one hit final acceptance issue again, the market sentiment will be impacted. Also could impact Armada`s reputation in this FPSO market.

Posted by rohank71 > 2 months ago | Report Abuse

who controls ASV... not BA but their Indian partner... how to control when U own 30%... this ASV is not important to BA... even the debt is already a project debt ie no recourse to BA and not consolidated. let's hope for new projects for BA where it controls.

Posted by Felix888999 > 2 months ago | Report Abuse

In term of shareholding BA is the not the controlling shareholder but BA is in charge of the technical, engineering of this project. When Final Acceptance failed, BA is the one taking the bullet. The ship herself has Armada`s name.

Posted by Robert Waters > 2 months ago | Report Abuse

This company NEVER fails to disappoint.
Sometimes I think they cannot do more of this failing as it has been already overplayed. They should have learned.
Like Kraken operational problems returning back to life after few years of operation.
Or impairments.
But here it comes, another delay with new FPSO Story.
Seems any problem I think of comes to life.
It is like a movie where the hero turn out to be a villan, causing all havoc.
Maybe Greedy Gary is that villan ... ?
And what is the new dejavu ?
My bet is legal case against a client again ...

Posted by Gabriel Khoo > 2 months ago | Report Abuse

https://www.upstreamonline.com/rigs-and-vessels/major-fpso-company-says-not-enough-competitors-for-big-high-cost-projects/2-1-1606125

Posted by vespa > 2 months ago | Report Abuse

Armada can’t get out of its own way.

Posted by Gabriel Khoo > 2 months ago | Report Abuse

https://www.linkedin.com/posts/oilandnaturalgascorporation_ongc-energynowandnext-energysecurity-activity-7169660663672295425-sHID?utm_source=share&utm_medium=member_android

Posted by nikicheong > 2 months ago | Report Abuse

https://www.linkedin.com/posts/shapoorji-pallonji-energy_fpso-armada-sterling-v-offshore-andhra-pradesh-activity-7169684891373191168-HMj7?utm_source=share&utm_medium=member_android

Posted by nikicheong > 2 months ago | Report Abuse

Officially India and Shapoorji doesn't seem to acknowledge Bumi Armada as a partner and no mention of Bumi Armada's contribution to the success of the project.

Posted by rohank71 > 2 months ago | Report Abuse

#niki, with this can we confirm the "first oil offtake" from ASV done?. the risk of non delivery by ASV is over?

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Got ah. Thanks stakeholder in the previous post

Posted by ITreeinvestor > 2 months ago | Report Abuse

Armada Sterling V achieve significant milestone of first off take on 27th feb 2024 and the offtake tanker flagged off on 2 mar 2024

Posted by rohank71 > 2 months ago | Report Abuse

Great news. even though financially this doesn't impact BA much but improves its credibility. Hope to see improvement in market values.

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Yes. Rohank

Posted by nikicheong > 2 months ago | Report Abuse

Leading Asian joint venture eyes stake sale for huge FPSO

KAS III vessel owned by Indonedsia's PT Armada Gema Nusantara, a joint venture of compatriot PT CakraPrima Satya and Malaysia’s Bumi Armada

A leading Asian joint venture is in advanced discussions with Indonesian state-owned player Pertamina to sell its stake in a sizeable floating production, storage, and offloading vessel currently deployed at the Madura BD gas field, operated by Husky-CNOOC Madura Ltd (HCML) offshore Indonesia.

The move underscores the financial constraints faced by contractors operating traditional oil and gas facilities who now find it increasingly challenging to secure funding for new projects.

https://www.upstreamonline.com/rigs-and-vessels/leading-asian-joint-venture-eyes-stake-sale-for-huge-fpso/2-1-1606178

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

Interesting stuff, if it can fetch a good valuation, I'm all for this. It might also tie-up with the upcoming Madura FLANG where Pertamina will be partnering with Bumi Armada based on the non-binding agreement signed in 2023.

Posted by nikicheong > 2 months ago | Report Abuse

Maybe this is one of the things Gary meant when he alluded to "creating shareholder value via corporate exercise" in the Q4 2023 results press release.

I believe the vessel can be sold for between USD350mil to USD400mil based on the remaining tenure of the contract and the value of the FPSO itself.

If we take USD350mil as the conservative estimate, Bumi Armada will be entitled to half the proceeds amounting to USD175mil, equivalent to around RM820mil.

Posted by Gabriel Khoo > 2 months ago | Report Abuse

How much would this fpso contribute to the profit and how this would tie with madura FLNG?

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Look like madura FLNG will be finailized anytime this year.

Posted by jklkk911 > 2 months ago | Report Abuse

The RM514.4m impairment is for both the Armada Kraken and SC asset.
Do we know what is the impairment amount of each?

Could it be they do not see any potential order on their SC asset for quite some time? or potentially selling it and not have take a huge loss later?

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Purging the balance sheet. 2024 will be a good yeae for shareholder.

Posted by ITreeinvestor > 2 months ago | Report Abuse

Aminvest - Oil & Gas
Robust earnings growth from elevated oil prices against the backdrop of prolonged supply disruptions and past underinvestment. Companies with direct exposure to upstream production and FPSO subsector will be i n pole position to ride on
the tailwind of bouyant oil prices.

Posted by nikicheong > 2 months ago | Report Abuse

Okay so I’ve managed to find out that Bumi Armada is definitely not selling their stake in the FPSO. That means, if the UpstreaOnline article has substance, it is the Indonesian JV partner who will be selling some or all of their stake to Pertamina.

Posted by Gabriel Khoo > 2 months ago | Report Abuse

Nik. What is the link about?

Posted by nikicheong > 2 months ago | Report Abuse

Ignore, sent in error.

Posted by ITreeinvestor > 2 months ago | Report Abuse

Bumi Armada- Potential Sale of Karapan Armada Sterling III

Based on a capex of US$500mil, a project IRR of 13.5%, 49%-
associate stake and a WACC of 6%, we estimate the net
present value contribution for KAS III attributable to Bumi
Armada at RM681mil. Against our estimated book value of
RM602mil for the vessel, we expect the group to record a oneoff disposal gain of RM79mil- 9% of FY24F net profit

Posted by ITreeinvestor > 2 months ago | Report Abuse

https://klse1.i3investor.com/servlets/staticfile/533201.jsp

Posted by kmchua888 > 2 months ago | Report Abuse

Thanks ITreeinvestor for your sharing

Posted by sense maker > 2 months ago | Report Abuse

Still awaiting the pipe dream of a dividend here.

Posted by nikicheong > 2 months ago | Report Abuse

Dear Niki,

The BAB Group has no current intention of disposing its shareholdings in the FPSO asset in Indonesia.

Rest assured, the BAB Group would make the relevant disclosures where required to do so under the listing requirements.

Regards,

Bumi Armada Investor Relations

Posted by nikicheong > 2 months ago | Report Abuse

From AmInvest's research report:

"Sources from Upstream indicate that purpose of the sale is to raise additional cashflow to facilitate construction of a new unit and may occur either in part through the divestment of PT CakraPrima Satya’s stake or in full."

It's clear from the UpstreamOnline article and BAB IR's response that the divestment of the FPSO is centered around PT CakraPrima Satya's stake, which the AmInvest research report acknowledges.

I also don't understand how does divesting PT CakraPrima Satya's stake help raise additional cashflow to facilitate the construction of a new unit.

Regardless, this ties back to my initial assumption that with Pertamina in the picture, this potential stake sale is linked to the upcoming Madura FLNG project, most likely as a 50-50 JV between Bumi Armada and Pertamina.

Also, of course, the BAB IR response to my query does not mean that their intention to dispose of their ownership in the FPSO will not change in the future.

Posted by nikicheong > 2 months ago | Report Abuse

Bumi Armada is working on a project for Shell CCS LCO2 FSIU.

Posted by nikicheong > 2 months ago | Report Abuse

Older article on Shell' plan: https://www.upstreamonline.com/energy-transition/shell-eyes-asia-offshore-ccs-hub/2-1-1234165

So far no project award, Bumi Armada has been working on pre-FEED/FEED for Shell

Posted by nikicheong > 2 months ago | Report Abuse

I don't know if it's a question of incompetence or just a matter or time, but Bumi Armada has been working on their FSIU and FCSIU concepts for over 2 years. At least RM50mil, probably more, has been spent with no ROI as of yet.

Sometimes it feels like Bumi Armada should just fire all staff and departments not related to the core FPSOs that are operational. Just enjoy the ride into sunset. Take no risk, reward shareholders with all the residual equity value of the FPSOs over time.

Posted by Robert Waters > 2 months ago | Report Abuse

The FCSIU projects are of no value to Bumi Armada. Only heavily subsidized by government corporation that can secure additional grants and freebies can carry them out. For that one has to be based in a politically motivated rich country that can waste taxpayers funds on new green initiatives.

Posted by frick2fa > 2 months ago | Report Abuse

Buy armada, TP 0.68 upside 25%