CEO Morning Brief

Uzma Wins Three-year Contract From ExxonMobil

Publish date: Wed, 15 May 2024, 10:31 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (May 14): Uzma Bhd (KL:UZMA) has secured a letter of award from ExxonMobil Exploration Production Malaysia Inc for non-rig assisted electric wireline logging equipment and services in West Malaysian waters.

In a bourse filing on Tuesday, Uzma said its wholly owned subsidiary Uzma Engineering Sdn Bhd was awarded with the three-year contract effective from May 3, 2024 to May 2, 2027.

The oil and gas service provider did not disclose the value of the contract, saying it is a call-off contract based on the agreed rates and work orders issued by ExxonMobil.

“The value of this enabling contract with no guarantee of call-offs shall be based upon the agreed rates and work orders, if any, issued by ExxonMobil within the contract period.”

Uzma said the contract will not have any effect on the share capital and shareholding structure of the company, as it does not involve the issuance of its ordinary shares.

“However, it is expected to contribute positively towards the earnings and net assets per share of the company for the financial year ending June 30, 2024 and onwards until the expiry of the contract.”

The scope of work includes technical consultancy and provision of electric-line units, logging services, tractoring, perforation interchangeable between different conveyances.

The contract marked Uzma’s seventh win since the start of 2024, with the latest from PTTEP International Ltd to undertake standard and special application of coiled tubing and pumping services worth US$9.27 million (RM43.9 million).

Prior to this, Uzma secured several contracts for an undisclosed value, including from Shell to provide integrated production and integrity chemical and associated services, as well as a two-year contract extension from Medco Energi Thailand (Bualuang) Ltd for the provision of hydraulic workover unit services.

Uzma also bagged a contract for the supply of chemical and related services for the PM3 Chemical Arrangement Area production-sharing contract where Hibiscus Petroleum Bhd (KL:HIBISCS) holds a 35% interest, a term contract from Petronas Carigali Sdn Bhd for the provision of a portable water injection module for the Sepat platform in Terengganu, and a contract to lease a water injection facility to SEA Hibiscus Sdn Bhd.

To facilitate the development, Uzma last month proposed a cash call to raise RM68.35 million via a private placement of 15% of its share base to fund the development of a water injection facility (WIF), which will be leased to a unit of Hibiscus.

Under the placement exercise, Uzma is expected to issue up to 58.08 million new shares to third-party investors.

Uzma has earmarked RM61.65 million of proceeds to partly fund the commissioning and construction of the WIF, while RM5 million will be for repaying bank borrowings, and the rest for the exercise’s expenses.

The proposed placement came less than one year after the group completed its private placement of 35.2 million shares in July last year that raised proceeds of RM21.47 million, which went towards the development of a 50-megawatt solar plant project under the fourth round of the Large Scale Solar (LSS4) programme.

Uzma shares ended one sen or 0.83% higher at RM1.21 on Tuesday, giving the company market capitalisation of RM468.55 million.

Year to date, Uzma’s share price has appreciated over 61.33%, and surged 98.36% over the past one year.

Source: TheEdge - 15 May 2024

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