Investment Highlights

• We maintain our SELL call on Sapura Energy (Sapura) with an unchanged fair value of RM0.04/share, pegged on a 5-year P/BV trough of 0.1x on the group’s FY23F book value.

• In its first announcement of fresh contracts for this year, Sapura has secured engineering and construction jobs worth RM766mil as follows:

• PRP7 pipeline replacement project off Brunei involving the replacement of 9.4km of 16” pipeline PID1494, including topside modification, riser and pipeline demolition for Brunei Shell Petroleum Co Sdn Bhd, with completion by 1QFY22. This project has an optional job scope to replace 1km of 6” pipeline PID2008, including topside modification, riser and pipeline demolition.

• Engineering, procurement, construction and installation (EPCI) contract in a consortium with Dredging International Asia Pacific undertaking the single buoy mooring (SBM) pipeline rejuvenation phase II project for Shell Eastern Petroleum (Pte) Ltd. This comprises a preemptive repair job for the nearshore pipeline section and rejuvenate the SBM system to Bukom Refinery in Singapore by 3QFY23. This also has an optional scope for the removal of existing pipeline at the refinery.

• Provision of project management, engineering, procurement, offshore heavy lifting vessel and transportation spread to decommission 7 offshore jackets, wet tow and reef jacket at a reef site in Thailand for Chevron Thailand Exploration and Production, Ltd. This offshore work is expected to commence within FY21.

• Transportation & Installation services for Hess Exploration and Production Malaysia B.V under the umbrella contract for the Pan Malaysia Transportation and Installation of Offshore Facilities (2017–2020). The scope comprises the provision of project management, installation engineering, transportation and installation of a gas module and support frame, condensate module with its support frame and shutdown valve platform at Bergading Central Processing Platform. The works are expected to be completed by 4QFY21.

• Provision of EPCI and pre-commissioning services for the additional Andalas pipeline project phase 4 development in the Malaysia-Thailand Joint Development Area (MTJDA) from Carigali-PTTEPI Operating Company Sdn Bhd. The scope covers 29km of 20” subsea pipeline from ADB to JKA platforms, including riser and riser guard installation. The works are scheduled for completion within 15 months from 30 April 2020.

Source: AmInvest Research - 4 Jun 2020