Petra  Energy  has  been  awarded  a  contract  by  Sabah  Shell  to  provide contract management, site execution and offshore maintenance services for the Gumusut Kakap floating production system. The contract is an addition to the offshore services contract awarded in 2012 by Shell, for the Gumusut Kakap project. There is no firm value stated in the letter of award dated Nov 18,  2014,  as  the  contract  is  on  a  call-out  basis.  The  contract  runs  for  14 months from April 1, 2015 and will expire on May 31, 2016. (Source: Bursa Malaysia)

Comments:  We  are  positive  but  not  surprised  on  the  contract  win  –  the topside maintenance work is an expected extension to the Gumusut Kakap offshore services contract secured in 2012 where Petra Energy provides the hook-up  &  commission  works  on  the  floating  production  system.  We maintain  our  earnings  forecast,  SELL  rating  and  SOP-derived  TP  of RM1.25.  Key  risks  to  our  negative  view  are  stronger-than-expected earnings and winning of production sharing contracts.

Source: Affin Hwang Capital Research - 12 Mar 2015