Journey to Wealth
Sapurakencana Petroleum - Lands Two More Contracts
THE BUZZ
SapuraKencana Petroleum (SKPETRO) announced on Bursa Malaysia yesterday that it was awarded with two contracts: i) the provision of underwater services worth RM700m from Petronas Carigali, and ii) the provision of engineering, procurement, construction and commissioning (EPCC) worth RM135.8m from Hess Exploration and Production Malaysia.
OUR TAKE
RM700m Petronas Carigali deal. The contract comprises the provision of underwater services, including inspection, repair and maintenance services. SKPETRO would be utilising specialised vessels, equipments and personnel for Petronas Carigali's offshore
oil and gas fields in Malaysia. The duration of the contract is three and a half years, effective from Oct 2012 until Apr 2016, with an extension option for one additional year.
RM135.8m Hess Exploration and Production Malaysia deal. The contract comprises the provision of engineering, procurement, construction and commissioning (EPCC) of Kamelia-A Wellhead Platform for an early production system of the integrated gas development project in the North Malay Basin. The project is expected to be completed by 1Q13.
Nudging up FY14 earnings by 4.1%. With the two contracts in the bag, SKPETRO would have an orderbook of some RM15bn-RM16bn. We are revising our FY14 earnings forecast upwards by 4.1% in anticipation of more contract awards for the group
in the near term. That said, we opine that there could be further upside to our earnings forecasts should the group's marginal oilfield in Berantai begin contributing to its bottomline in FY14.
Maintain BUY. All in, we remain positive on SKPETRO's prospects moving forward and expect the group to secure more jobs in the near term. Its orderbook remains the best in the oil and gas industry (estimated at some RM15bn-RM16bn with the addition of the
new contracts), with consistent replenishment expected. In line with our earnings forecast revision, our fair value is revised upwards from RM2.88 to RM3.00, pegged to an existing 20x FY14 EPS.
Source: OSK
SapuraKencana Petroleum (SKPETRO) announced on Bursa Malaysia yesterday that it was awarded with two contracts: i) the provision of underwater services worth RM700m from Petronas Carigali, and ii) the provision of engineering, procurement, construction and commissioning (EPCC) worth RM135.8m from Hess Exploration and Production Malaysia.
OUR TAKE
RM700m Petronas Carigali deal. The contract comprises the provision of underwater services, including inspection, repair and maintenance services. SKPETRO would be utilising specialised vessels, equipments and personnel for Petronas Carigali's offshore
oil and gas fields in Malaysia. The duration of the contract is three and a half years, effective from Oct 2012 until Apr 2016, with an extension option for one additional year.
RM135.8m Hess Exploration and Production Malaysia deal. The contract comprises the provision of engineering, procurement, construction and commissioning (EPCC) of Kamelia-A Wellhead Platform for an early production system of the integrated gas development project in the North Malay Basin. The project is expected to be completed by 1Q13.
Nudging up FY14 earnings by 4.1%. With the two contracts in the bag, SKPETRO would have an orderbook of some RM15bn-RM16bn. We are revising our FY14 earnings forecast upwards by 4.1% in anticipation of more contract awards for the group
in the near term. That said, we opine that there could be further upside to our earnings forecasts should the group's marginal oilfield in Berantai begin contributing to its bottomline in FY14.
Maintain BUY. All in, we remain positive on SKPETRO's prospects moving forward and expect the group to secure more jobs in the near term. Its orderbook remains the best in the oil and gas industry (estimated at some RM15bn-RM16bn with the addition of the
new contracts), with consistent replenishment expected. In line with our earnings forecast revision, our fair value is revised upwards from RM2.88 to RM3.00, pegged to an existing 20x FY14 EPS.
Source: OSK
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