Highlights

THE INVESTMENT APPROACH OF CALVIN TAN

Author: calvintaneng   |   Latest post: Sun, 24 Mar 2019, 10:14 AM

 

WHY VELESTO EARNINGS PER SHARE WILL ROCKET UP MORE THAN OTHERS FOR YEAR 2019, Calvin Tan Research

Author:   |    Publish date:


Hi guys,

 

I am very happy to see so many i3 Forumers buying into Velesto today. Velesto in Top no. 3 Volume makes me very happy indeed

Let Calvin share with you my reasons

 

1) FIRST AND FOREMOST IMPORTANT ANNOUNCEMENT FROM PETRONAS

As RAPID REFINERY NOW ALMOST 97% COMPLETED FOR DOWN STREAM REFINING PETRONAS IS NOW LOOKING TO UPSTREAM ACTIVITIES FOR YEAR 2019

EXPENDITURE FOR OFFSHORE UPSTREAM WILL INCREASE FROM RM11.5 BILLIONS (2018) TO RM15 BILLIONS THIS YEAR (AN INCREASE OF 30%)

 

2) PETRONAS has indicated that they will Increase Oil Rig from 15 (2018) to Mid 20s or 25 Oil Rigs and Up to End 20s about 29 Oil Rigs for Year 2019. In year 2014 Right when UMW OG Bought New Oil Rigs & New WorkOver Rigs Crude Oil Price crashed.

Of the 39 Oil Rigs in Operation 25 were put out of use due to the low Brent Crude Price fallen to a low of USD27 per barrel

UMW OG went into deep trouble like many others. And finally AMANAH SAHAM BUMI Bought over UMW OG from UMW 55%  shareholding and changed its name to VELESTO

 

3) AMANAH SAHAM BUMI IS VERY VERY FORTUNATE TO TAKE OVER SUCH EXPENSIVE & NEW ASSETS IN THIS TIME OF CRISIS. CRISIS FOR UMW CREATED GREAT OPPORTUNTIY FOR AMANAH SAHAM BUMI

These New Oil Rigs & WorkOver Rigs are VERY VERY EXPENSIVE. Each Cost Hundreds of Millions in USD

 

4) FINALLY PETRONAS HAS AWARDED HUGE PROJECTS TO VELESTO

Now please go and See JOB Awards of VELESTO from Bursa Website

 

OTHERS UMBRELLA CONTRACT FOR THE PROVISION OF 340K AND 460K HYDRAULIC WORKOVER UNIT FOR PETRONAS CARIGALI SDN BHD ("CONTRACT") OR ("AWARD OF CONTRACT")

UMW OIL & GAS CORPORATION BERHAD

 

Type Announcement
Subject OTHERS
Description
UMBRELLA CONTRACT FOR THE PROVISION OF 340K AND 460K HYDRAULIC WORKOVER UNIT FOR PETRONAS CARIGALI SDN BHD ("CONTRACT") OR ("AWARD OF CONTRACT")

1.         INTRODUCTION

The Board of Directors of UMW Oil & Gas Corporation Berhad ("UMW-OG") is pleased to announce that UMW Workover Sdn. Bhd. (“UWO”), a wholly-owned subsidiary of UMW Malaysian Ventures Sdn. Bhd. (“UMV”), which in turn is a wholly-owned subsidiary of UMW-OG has been awarded a contract for the provision of hydraulic workover units (“HWU”) for PETRONAS Carigali Sdn Bhd. (“PETRONAS Carigali”).

All relevant approvals with regards the Award of Contract have been secured today.

2.         DETAILS OF CONTRACT

2.1       The Contract is for the provision of HWU to undertake workover services for PETRONAS Carigali under an umbrella contract.  It calls for the use of all or any of UWO’s five (5)  HWU, namely UMW Gait 1, UMW Gait 2, UMW Gait 3, UMW Gait 5 and UMW Gait 6 to undertake workover services, which are services rendered in performing maintenance and/or remedial treatments on an oil or gas well.

2.2       The Contract is of an umbrella framework which provides an over-arching contractual relationship which may comprise a series of individual orders and call-outs.

2.3       Commencing from 22 December 2017, the Contract has a term of three (3) years with an option to extend for a further 1 year (“Extension”).  

2.4       Orders for services under the Contract are individually made through call-outs and at stipulated prices. At present there has not been any call-out or work orders for services.

3.         INFORMATION ON PARTIES 

3.1       Information on UMW Workover Sdn. Bhd.

UWO was incorporated in Malaysia under the Companies Act, 1965 on 13 March 2014 and is principally involved in the business of providing workover operations for the oil and gas industry.

3.2       Information on PETRONAS Carigali

PETRONAS Carigali is a wholly-owned subsidiary of Malaysian state-owned oil and gas company, PETRONAS and has its office at Level 26, Tower 1, Petronas Twin Towers, Kuala Lumpur City Centre, 50088, Kuala Lumpur, Malaysia. The principle activities of PETRONAS Carigali includes the exploration, development and production of oil and gas.

4.         FINANCIAL EFFECTS

The Contract will not have any effect to the earnings and net assets of UMW-OG Group for the financial period ending 31 December 2017 but is expected to contribute positively to the earnings and net assets of UMW-OG Group in the financial periods in the duration of the Contract and also for the Extension, if the option to extend is exercised.

5.         RISK ASSOCIATED WITH THE CONTRACT

The risks associated with the execution of the Contract comprises operational and execution risks, which will be mitigated and/or managed by UWO, a company with a proven successful track record of undertaking workover services.

6.         DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTEREST

None of the Directors and/or the substantial shareholders of UMW-OG and/or persons connected with the Directors and/or substantial shareholders have any interest, direct or indirect in the above Contract.

7.         STATEMENT BY DIRECTORS

The Board of Directors of UMW-OG is of the opinion that the Award of the Contract for the abovementioned workover services is in the best interest of UMW-OG Group.

This announcement is dated 16 January 2018.       

 

On January PETRONAS Gave Job Awards for 5 OGSE, namely, Carimin, Dayang, Petra Resources (Penergy), Deleum & Sapnrg

After One year we SEE Carimin, Dayang & Penergy Revenues are UP FROM 60% To Over 100%

This shows the HUGE JOB AWARDS DONE FOR PETRONAS.

 

 

 

 

NOW ON JANUARY 2018 IN BURSA ANNOUNCEMENT  PETRONAS ALSO GAVE JOB AWARDS TO VELESTO

Read again

 DETAILS OF CONTRACT

2.1       The Contract is for the provision of HWU to undertake workover services for PETRONAS Carigali under an umbrella contract.  It calls for the use of all or any of UWO’s five (5)  HWU, namely UMW Gait 1, UMW Gait 2, UMW Gait 3, UMW Gait 5 and UMW Gait 6 to undertake workover services, which are services rendered in performing maintenance and/or remedial treatments on an oil or gas well.

 

Now let's take a closer examination of these HWU

What are  these HWU

 

HWU are 

WORKOVER SERVICES (Refer to VELESTO COMPANY WEBSITE)

We own and operate a fleet of modular and versatile workover units that are well suited for well intervention operations located either on a small satellite jackets or large integrated platforms.

Our hydraulic-driven workover units with high pulling capacities are capable of performing a wide range of workover services.

 

GAIT 5
Click here for specifications

 

See more

Hydraulic Workover


Looking for a cost efficient method to repair your well?

Hydraulic Workover is the most cost efficient method to repair all types of wells both onshore and offshore. The Hydraulic Workover Unit (HWU) is a versatile, cost saving and safe tool to perform sand cleanouts, change-out completions and to repair casing leaks. By fixing wells quickly and very cost efficient, Balance Point Control has become the market leader for Hydraulic Workover services in the North Sea.

 

Our Hydraulic Workover Units can do;

• Completions / Workover
• Plug & Abandonments
• ESP completion
• Sand screens installations
• Tubing conveyed perforations
• Liners and tailpipe installation
• Repair of down hole safety valves
• Well deepening
• Fishing/ Well clean-outs
• Casing window milling
• Casing repairs
• Packer / Plug Milling
• Cementing
• And much more….

 

How does it work?

Hydraulic Workover is a well intervention technique which can be used to install or remove tubular (pipes) in- or out of dead wells. “Dead” well means that the well has zero surface pressure and has a heavy fluid or mud in the wellbore, or is not capable of sustaining natural flow. The pipes are pulled out of the well using hydraulic cylinders. 

Hydraulic Power
 
The HWO unit (Hydraulic Workover Unit) utilizes hydraulic cylinders to lift the tubular in- or out of the well. The use of hydraulic cylinders allows perfect control over tubular movements and eliminates the use of a large mast construction which is present on conventional drilling rigs.
 

 

 
Hydraulic cylinders can generate large pull and push forces and give the HWO unit a small footprint and layout. These properties are especially beneficial for offshore operations where space is limited and where weather conditions can be harsh. In general is the running speed of a HWO unit lower than that of conventional workover rig.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOW FROM HERE WE CAN SEE WHY PETRONAS NEEDED HWU (Hydraulic Workover Unit) from VELESTO
Since year 2014 Out of 39 Oil Rigs in Use Only 15 Survived (24 Oil Rigs were left idle until this year 2019)
And this Year Petronas has again recommisioned 10 to 14 moth-balled Oil Rigs
Tell me after 5 long Years in the Offshore sea these Oil Rigs will need a Whole Lot of Repair & Overhaul before being able to be put back into use

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Why the Contract amount is not specified?

 

The ANSWER Is This

If you send a BMW Car after being idle for 5 years for Service & Repair you won't know the exact cost until you test everything & check what parts needed for repair or replacement

So is Oil Rigs left abandoned in the Sea for 5 years

THERE WILL BE LOTS OF SERVICE, REPAIR & PARTS REPLACEMENT FOR ALL THESE 10 to 14 OIL RIGS

SINCE OIL RIGS ARE THE MOST EXPENSIVE EQUIPMENT TO MAINTAIN (THEY COST BILLIONS & BILLLIONS OF USD VELESTO STANDS TO MAKE MANY MANY TONNES OF PROFIT FOR YEAR 2019

 

Next Question?

Are there any other Competitors apart from VELESTO Having HWU (Hydraulic Workover Unit)?

The Answer is None

ONLY VELESTO HAS HWU

 

 

 

Our Hydraulic Workover Units can do;

• Completions / Workover
• Plug & Abandonments
• ESP completion
• Sand screens installations
• Tubing conveyed perforations
• Liners and tailpipe installation
• Repair of down hole safety valves
• Well deepening
• Fishing/ Well clean-outs
• Casing window milling
• Casing repairs
• Packer / Plug Milling
• Cementing
• And much more….

NOW LET's TAKE A LOOK ON UMW OG FROM STOCK PERFORMANCE GUIDE By DYNAQUEST (Refer to pp 254) March 2015 Editon

And I quote

"UMWOG is the sole Malaysian owner and operator of HWUs and a petroleum-licensed provider of HWU services with four HWUs"

(as of Now VELESTO Has added a few more new ones (almost brand new and not much used) 2014 models

No one else has these HWUs that I know of. Not Sapnrg, Armada, Dayang, Penergy, Carimin, Deleum or other players. NO NO NO. NO ONE ELSE HAS HWUs EXCEPT VELESTO!!!

VELESTO IS THE SOLE OPERATOR ACCORDING TO DYNAQUEST

 

They say, "IN THE LAND OF THE BLIND THE ONE EYED MAN IS KING"

SO IN A RUSTY SEA OF ABANDONED OIL RIGS VELESTO IS THE SOLE CHAMPION KING WITH HWUs

 

BEST REGARDS

Calvin Tan Research

Singapore

 

 

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Labels: VELESTO

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Chart Stock Name Last Change Volume 
VELESTO 0.295 -0.005 (1.67%) 16,449,800 

  2 people like this.
 
Heavenly PUNTER Unker Calvin, this one another of your chun chun call ah? Got some spare funds tmr sailang velesto
12/03/2019 9:09 PM
calvintaneng FROM HERE WE CAN CONCLUDE THAT VELESTO HAS CORNERED THE OIL RIG RECOMMISSIONING MARKET FOR YEAR 2019

SO VELESTO EARNINGS WILL EXPLODE UP TO OVERTAKE DAYANG, PENERGY, CARIMIN & ALL OTHERS

THIS IS A MULTI BILLION JOB AWARDS BY VIRTUE OF OIL RIG COST IN THE MANY BILLIONS
12/03/2019 9:21 PM
calvintaneng AND REMEMBER

THERE ARE THESE POWERFUL FACTORS

1) PETRONAS REFINERY NEEDS 54.7 MILLION BARRELS OF EXTRA CRUDE OIL

2) A RM13 BILLIONS CHEMICAL INDUSTRY GOING FOR LAHAT DATU

3) LI KA SHING OF HONG KONG ALSO INVESTING RM500 MILLIONS IN PENGERANG FOR REFUELING OF ULOC (ULTRA LARGE OIL CARRIER) BIGGER & LONGER THAN EVEN WAR CRAFT CARRIER

LOTS & LOTS OF CRUDE OIL AND NATURAL GAS WILL BE NEEDED

PETRONAS HAS INDICATED THEY HAVE 39 OIL RIGS IN MALAYSIAN WATERS

NOW 15

AND 10 to 14 MORE WILL BE REACTIVATED

THAT MEANS IF FULLY RECOMMISSIONED THERE WILL BE 29 OIL RIGS IN OPERATION FOR YEAR 2019 (THE REMAINING 10?)

IF OIL DEMAND IS GOOD THEN FOR YEAR 2020 PETRONAS MIGHT EVEN REACTIVATE THE LAST REMAINING MOTH-BALLED OIL RIGS

THEN?

THEN VELESTO SHARE PRICE WILL HAVE CROSSED RM1.00 & ON ITS WAY TO RM2.00
12/03/2019 9:28 PM
Koon Bee Tomorrow all uncle and aunty panic buying.. Calvin, go proposed to uncle Kyy and OTB ask them buy
12/03/2019 9:42 PM
calvintaneng One more thing from Dynaquest Stock Performance GUIDE

Grand Champion Master Sifu Dr Neoh Soon Kean gave a Gross Margin profit for UMW Og at 92%

He gave Dayang a gross margin profit of only 46%

Velesto has marked down its assets and impairment by Rm900 millions

After all impediments are cleared Velesto the hidden gem will shine brightly
12/03/2019 9:48 PM
George Leong Thanks for sharing Calvin Tan. Just a question, valuation wise, how do u see Velesto? Its NTA is rm0.34, assuming the company makes rm200 mil in 2019, with 8.22 bill shares and PE of 10, its target price is rm0.24 cents. Or in your view, u have other ways to estimate its future fair value?
12/03/2019 10:18 PM
Wolf_Of_Gaya_Street do you know what's umbrella contract?
12/03/2019 10:25 PM
Ron90 bro Calvin..speak of volume needed to fire RAPID..you should also promo Bunga raya la..the real tokey minyak and the real winner..hehe.

I am expecting, from tomorrow, Bunga will fly ..no worries, I already in
12/03/2019 10:29 PM
calvintaneng George Leong

Nta and cash for UMW Og for year 2014 was rm2. 00

They have depreciated the oil rigs assets by alot

Since they are only 4 to 5 years old I think it is overdone

Now we are not looking at Nta alone for a turnaround with powerful strong growth earning potential

MR Market in Malaysia as we know now love Earnings the most

As can be seen in Dayang, carimin and penergy

So powerful earnings is the number one reason for price rise

AND velesto will have lots and lots of EARNINGS
12/03/2019 10:29 PM
i3lurker thats Fundamental Financial Data Analysis, that does not apply here at all.

now we are talking Pump and Dump, it works differently, there is a Dream Factor Delta which outputs a TP = USD10,000.00 per share. with a PE = 10 Trillion and the future fair value is infinity....

hope this answers your questions.

=====================================================
Posted by George Leong > Mar 12, 2019 10:18 PM | Report Abuse
Thanks for sharing Calvin Tan. Just a question, valuation wise, how do u see Velesto? Its NTA is rm0.34, assuming the company makes rm200 mil in 2019, with 8.22 bill shares and PE of 10, its target price is rm0.24 cents. Or in your view, u have other ways to estimate its future fair value?
12/03/2019 10:33 PM
i3lurker Umbrella Contract ===> a contract to announce via Bursa to increase share price

.......but....maybe/could be/possibly/really revenue = zero and earnings = zero

Posted by Wolf_Of_Gaya_Street > Mar 12, 2019 10:25 PM | Report Abuse
do you know what's umbrella contract?
12/03/2019 10:39 PM
i3lurker The future of the oil rigs industry is over ….. coz Global Warming has resulted in violent weather in all oceans even in Terengganu waters. As evidenced by 50 knots Pabuk recently. Oil majors are aware of this, that's why they dispose ocean assets cheaply example to Hibiscus et al.

Pump and Dump for short term gain while you still can.

:)
12/03/2019 10:51 PM
Goldberg Interesting writeup Bro Calvin and many thanks for it. Bought a substantial amount on Monday morning at 27 sen. Will keep for at least a year as I believe Velesto has along way to go. This is just the beginning of the uptrend. My TP is RM1-00 within a year.
12/03/2019 10:54 PM
i3lurker and I think thats why Pengerang is very nicely situated near to Singapore. An Act of God Global Warming above 50 knots typhoonic "like Pabuk recently" wind will blow it up and Singapore should benefit from the explosion......
12/03/2019 11:00 PM
calvintaneng Very happy for all who believe

YOU Shall Prosper!!

As for Naysayers who wanted to spread rumour and by cheap?

Still linger with doubt?

BETTER CAST ALL DOUBTS TO THE WIND

UMBRELLA CONTRACTS ALSO IN DAYANG & PENERGY JOB AWARDS

See


Dayang got Umbrella contract
https://www.thestar.com.my/business/business-news/2019/03/02/dayang-making-a-comeback/

Penergy got unbrella contract
http://www.bursamalaysia.com/market/listed-companies/company-announcements/1091901
12/03/2019 11:07 PM
i3lurker Nothing wrong with Umbrella Contracts .... and also btw fyi I am not a bumiputra so I do not really expect too much from all these NEP style contract awards to bumi companies whether listed or not.
12/03/2019 11:25 PM
3iii Don't worry about missing the Next New Thing. Avoiding mistakes and danger zones is more important for long term investment performance.
13/03/2019 8:14 AM
calvintaneng There is no other oil and gas stock so safe like Velesto right now

Velesto has

1. Superior Assets
Most oil rigs and HWUs are only 4 to 5 years old
And they are chun chun at the right time in the right place... Just when Petronas is recommissioning moth-balled oil rigs and clod up oil wells

2. Superior Paymasters
Jobs contracted from Petronas and Shell ensure prompt payments

3. Superior Balance sheet
Of the 3 heavyweights Velesto gearing only 0.3 to 0.4. All backed by valuable real assets in oil rigs and HWUs

4. Superior Price

Velesto was once over rm4. 50
Now only 30.5 sen
The opportunity for upside is immense whole losses almost negligible

This is it

Go for Velesto today!!!
13/03/2019 8:24 AM
cybergreen wow..thanks Calvin for another gem stock call. T7, dayang, carimin all perform well. Next would be velesto.
13/03/2019 8:25 AM
cybergreen Velesto has a very strong balance sheet for an oil and gas company. The debts to equity ratio is only 0.41. The short term borrowing is just RM97.1million. Unlike many other oil and gas company, Velesto does not have cash flow problem.
13/03/2019 8:27 AM
Koon Bee https://www.google.com/amp/s/www.theborneopost.com/2019/02/14/analysts-see-improving-outlook-for-velesto-energy/amp/

Velesto have 8 rigs

The rental of usd68k to usd70k per day each
13/03/2019 8:27 AM
calvintaneng Velesto was Rm4. 50 in year 2014
Now at only 30.5 sen
More than 90% discount to Rm4. 50

Those holding UMW Og in year 2014 at Rm4. 50 faced great risk when Crude oil price crashed to USD27 and Petronas decommissioned 25 oil rigs

Now we buy Velesto at only 30.5 sen with new found optimism in the recommissioning of oil rigs by Petronas
We are at the very outset of a great opportunity of a multi year oil and gas bull run
13/03/2019 8:42 AM
calvintaneng OIL & GAS BULL RUN NEWS: Sabah poised to be on world map with RM13 bil petrochemical plant, Calvin Tan comments
https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/197614.jsp
13/03/2019 9:51 AM
rwilliams UZMA has more fleet of Hydraulic Workover unit than Velesto through UZMA acquisition of MMSVS from Thailand (https://www.thestar.com.my/business/business-news/2014/05/21/uzma-to-buy-thai-co-for-rm95mil/) . In fact more workover, and plug abandonment work were given to UZMA than to Velesto.

So it is wrong to say no competition for Hydraulic Workover Unit.
13/03/2019 9:54 PM
rwilliams And UZMA also awarded that umbrella contract for Hydraulic Workover umbrella, so UZMA will be stiff competition to Velesto
14/03/2019 8:04 AM
Heavenly PUNTER fake news fake news
14/03/2019 8:05 AM
Bursawise cute...people
14/03/2019 8:07 AM
fl888 Why is ICON left out in the present O &G euphoria ? Got good contracts recently and crazy impairment provisions...watch out for this laggard ,,,,PH related..
14/03/2019 8:09 AM
enid888 Velesto should expand its fleet of rigs by purchasing from others. There are still existing rigs available from others. Malaysian demand for rigs is booming and Velesto has market requirements more than it can meet.
14/03/2019 9:40 AM
enid888 It is still early stage of oil and gas bull run in Bursa.
14/03/2019 9:43 AM
enid888 Petronas and others need more than 10 additional jack-up oil rigs in Malaysian waters. Velesto as the single local supplier has only 3 not employed at the moment. I think all these 3 will be taken up in a few months time.
14/03/2019 10:03 AM
deMusangking believe the great bomoh!!!!!!!!!!!
this is the stock!!!!!!!!!!

haha
14/03/2019 10:06 AM
bearbull rwilliams is absolutely true...velesto is not all on its own...uzma is bigger. Maybe calvin can make a comparison on velesto and uzma...
16/03/2019 3:10 PM
ipomember calvin, i dont think Velesto is the only company doing HWU, as i know there are quite a number of OGSE companies in malaysia doing HWU too


No one else has these HWUs that I know of. Not Sapnrg, Armada, Dayang, Penergy, Carimin, Deleum or other players. NO NO NO. NO ONE ELSE HAS HWUs EXCEPT VELESTO!!!

VELESTO IS THE SOLE OPERATOR ACCORDING TO DYNAQUEST
18/03/2019 8:10 PM
calvintaneng Posted by ipomember > Mar 18, 2019 08:10 PM | Report Abuse

calvin, i dont think Velesto is the only company doing HWU, as i know there are quite a number of OGSE companies in malaysia doing HWU too


No one else has these HWUs that I know of. Not Sapnrg, Armada, Dayang, Penergy, Carimin, Deleum or other players. NO NO NO. NO ONE ELSE HAS HWUs EXCEPT VELESTO!!!

VELESTO IS THE SOLE OPERATOR ACCORDING TO DYNAQUEST

Calvin replies:

I got this news from Dynaquest STOCK PERFORMANCE GUIDE (Year 2015 Sept Edition)
Maybe by now Others also got HWU

But so far I went into Sapnrg & Bumi Armada Company Websites & Annual Report & didn't find any HWU yet

Maybe someone can enlighten Calvin if there are others who have HWUs?

One more thing

UMW Og last ordered these HMUs & also Some Oil Rigs in year 2014/5 before Crude Oil Crisis hit All OnG entities badly when Brent Crude fell to USD27 only.

After that many Oil & Gas Companies literally went belly up

I don't see anyone else dare to invest in any HWUs

Every Top Boss Petronas also cut down Rig use from 39 to only 14 after 2014/15 Oil crash carnage
18/03/2019 8:38 PM


 

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