SapuraKencana Petroleum; Buy; RM4.12
Price Target: RM4.85; SAKP MK

SAKP announced that it has been awarded a US$40m drilling contract by PTTEP International Limited for the provision of its T9 tender assist rig. The tender assist rig will be used for PTTEP’s Zawtika development drilling campaign offshore Myanmar for 300 days, commencing in Jul13.

The contract translates into US$133k daily charter rate (DCR) which comes within our expectation. Prior to this latest contract, T9 was last chartered by Petronas Carigali for 12 months at US$148k DCR (inclusive of mobilisation fees) until Apr13. We have already imputed the new contract into our financial model, therefore our earnings forecast remains intact.

We reiterate our BUY rating with RM4.85 TP, based on 22x FY15 EPS. We continue to like SAKP as its unrivalled integrated offshore services will naturally place it among the frontrunners for bidding of mega projects in Malaysia.

Source: HwangDBS Research - 15 Jul 2013