SAKP announced that the group has secured US$459m (RM1.6bn) worth of contracts, comprising of US$206m fabrication, hook-up and commissioning works, US$151m offshore construction and subsea services contracts and US$102m drilling contracts. The details are as below:

i.  Petronas Carigali had awarded to  SAKP an  EPCC contract for  BNJT-K  (Baronia)  and  TTJT-A  (Tukai)  wellhead platforms.  The  RM480m  contract  is  for  a  duration  of  48 months and is expected to be completed by the 4Q18;

ii.  Carigali-PTTEPI Operating Company had awarded to SAKP a US$26m contract for the provision of brownfield works, to be completed by 1Q16;

iii.  Petronas  Carigali  had  awarded  to  SAKP  a  RM140m contract  for  the  procurement,  construction  and commissioning  of  the  Angsi  compression  module,  to  be completed by 4Q15;

iv.  Vestigo  Petroleum  had  awarded  to  SAKP  a  US$13m contract for the provision of transportation and installation of central  processing  platform  for  Tembikai  Development offshore Terengganu, to be completed around Mar15;

v.  Hereema Marine had awarded a US$18m subcontract to its 50%-owned  SapuraAcergy  for  the  provision  of  buoyancy tanks  removal  and  disposal  for  the  Chevron  Wheatsone project;

vi.  Total  E&P  Myanmar  had  awarded  a  US$120m-US$130m contract to SapuraAcergy for the engineering, procurement, construction  and  installation  (EPCI)  of  the  Wellhead Platform  4  and  lower  compression  platform,  pipelines  and cable.  The  contract  works  is  located  in  Yadana  Field, offshore Myanmar, to be completed by 4Q16;

vii.  Foxtrot International had awarded a drilling contract for the provision  of  semi-tender  drilling  rig  SKD  Alliance.  Foxtrot intends  to  utilise  SKD  Alliance  for  its  development  drilling campaign offshore  of  Ivory Coast for a period of 400 days commencing Feb15.

viii.  Hess  Equatorial  Guinea  Inc  had  extended  the  contract  for the  semi-tender  drilling  rig  "West  Esperanza".  Hess Equatorial Guinea will continue to use West Esperanza for its  development  drilling  campaign  offshore  Equatorial Guinea.  The  extension  is  for  a  period  of  three  months commencing  around  Sep15  until  Dec15.  (Source:  Bursa Malaysia)

Comment:  We are positive on the US$459m contract wins  –  it is a strong assurance that SAKP is capable  of    securing  works despite the weakening oil  &  gas  capex  outlook.  Adding  these  US$459m  contracts,  SAKP  had secured a sizeable US$2.5bn worth of new contract wins / extensions year to-date,  which exceeds  our contract win assumption of US$2bn. That said, we made no changes to our earnings forecasts as most of these contracts works  (and  their  billings)  will  only  commence  in  2015.  Maintain  BUY  on SAKP with an unchanged TP of RM3.60 based on 15x 2015E PE. We like SAKP  for  its  integrated  business  model,  strategic  oil  &  gas  assets,  good geographical spread and undemanding valuation of 10x 2015E PE.

Source: Affin Hwang Capital Research - 8 Dec 2014