SapuraKencana  Petroleum  (SKP)  announced  yesterday  that  its  wholly-owned subsidiary, Kencana HL SB, has received a letter of award from Kebabangan Petroleum Operating  Company  SB  for  the  provision  of  hook-up  and  commissioning  services  for Kebabangan Northern Hub Development Project.

More  about  the  contract.  The  contract  comprises  provision  of  hook-up  and commissioning  services  for  offshore  facilities  for  the  Kebabangan  oil  field  located offshore  Sabah.  The  estimated  value  for  the  contract  is  approximately  RM106m  and  is scheduled to commence in mid-2012 and be completed by mid-2014.

Positive  news,  but  no  change  to  our  FY13-14  forecasts.  This  is  because  we  had already factored in some orderbook replenishment for the merged entity.

Maintain  BUY.  Despite  already  having  a  strong orderbook,  we  think  that  there  are still ample opportunities for SKP to beef up its orderbook further, especially from Petronas. SKP remains our top O&G pick besides Dialog and we remain bullish on the group as it is  now  a  full-fledged  engineering,  procurement,  construction,  installation  and commissioning (EPCIC) O&G provider. Our fair value for SKP is RM2.88, based on PER of 20x FY13 EPS. 

Source: OSK