Yup, maybe but I believed qtr going to deliver good profit...50c impossible after that plus if there's any new contract announcement

Dapat 0.20/25c pun ckp ler..jgn tamak

Hahaha..betui

The world should be worried’: Saudi Aramco — the world’s largest oil producer — just issued a dire warning over 'extremely low' capacity.

The global oil market remains tight according to Saudi Aramco, the largest oil producer in the world. And that does not bode well for a world that still relies heavily on fossil fuels.

“Today there is spare capacity that is extremely low,” Saudi Aramco CEO Amin Nasser says at a conference in London. “If China opens up, [the] economy starts improving or the aviation industry starts asking for more jet fuel, you will erode this spare capacity.”

Nasser warns that oil prices could quickly spike — again.

“When you erode that spare capacity the world should be worried. There will be no space for any hiccup — any interruption, any unforeseen events anywhere around the world.”

The world should be worried’: Saudi Aramco — the world’s largest oil producer — just issued a dire warning over 'extremely low' capacity.

The global oil market remains tight according to Saudi Aramco, the largest oil producer in the world. And that does not bode well for a world that still relies heavily on fossil fuels.

“Today there is spare capacity that is extremely low,” Saudi Aramco CEO Amin Nasser says at a conference in London. “If China opens up, [the] economy starts improving or the aviation industry starts asking for more jet fuel, you will erode this spare capacity.”

Nasser warns that oil prices could quickly spike — again.

“When you erode that spare capacity the world should be worried. There will be no space for any hiccup — any interruption, any unforeseen events anywhere around the world.”

If you share Nasser’s view, here are three oil stocks to bet on. Wall Street also sees upside in this trio.

Only working capital requirement for Cameia FPSO
The saving grace for the Cameia FPSO project off Angola would be its requirement for working capital only, without the burden of capital expenditure (capex) since TotalEnergies has tendered out the work as an engineering, procurement and construction project.

In an Aug 26 note, CGS-CIMB Research analyst Raymond Yap says, “TotalEnergies will bear the capex with the FPSO contractor merely providing the EPC services, which will not require substantial equity capital. [Thus, it] reduces the risk of a rights issue in the foreseeable horizon, in our opinion.”

Yap has an “add” call on the stock and gives it a target price of 55 sen apiece in view of the 11% drop in the counter over the last three months.

For 1HFY2022, net profit rose 22.92% to RM372.01 million from RM302.65 million last year, with revenue coming in slower at RM1.15 billion, a hair lower than RM1.18 billion year on year.

In its latest results, Bumi Armada says its future firm order book at the end of 2QFY2022 amounted to RM13.1 billion, with additional optional extensions of up to RM9.4 billion.

Analysts concur that the immediate outlook for Bumi Armada “looked good, with plenty of pipelay jobs available in the Caspian Sea in view of high oil prices”, and in Africa, which has “plenty of new demand for FPSOs”.

“[Bumi Armada] said it is confident of securing additional work once its existing job is completed in the third quarter. On the FPSO front, its 30%-owned FPSO Kakinada 98/2 project in Singapore was 90% complete as at June 30, and should sail away to India in 4Q2022F,” CGS-CIMB’s Yap says.

Although the FPSO pipeline in the market is strong, whether Bumi Armada can take on these projects will depend on its execution capability and whether it still has a core management team to tackle the new project, Maybank Investment Bank Research analyst Liaw Thong Jung cautions.

“Securing the required financing and having a project management team to execute and deliver it, on schedule and on budget, is key,” Liaw adds. He has a “buy” call on the counter with a target price of 58 sen.

In terms of the group’s appetite for more FPSO projects, UOB’s Kong reiterates Bumi Armada’s guidance that “with lower gearing, [the group] said it can take on two new FPSOs, or one wholly-owned FPSO with US$1 billion capex and one to two FPSOs [via] joint venture with [co-venturer] Shapoorji Pallonji Group. It wouldn’t need a rights issue or equity funding”.

He explains that having settled about US$91 million of debt repayments in the second quarter, Bumi Armada’s outstanding debt now stands at RM5.7 billion while its net debt-to-earnings before interest, taxes, depreciation and amortisation ratio is at four times.

“There are also other FPSO projects which the group may be keen to take on, such as ConocoPhillips’s Salam-Patawali oil development offshore Sarawak. If Indonesia is looking for an FPSO provider, Bumi Armada could be keen as they have an FPSO there as well,” Kong says, adding that he believes the group would not stretch beyond the US$1 billion gearing upside mark with the mixture of FPSO and gas projects it takes on.

He believes that the robust international demand for FPSOs as well as high oil price also bode well for the other FPSO stocks under the research house’s coverage — Yinson Holdings and MISC.

“We like Yinson as it has the best growth and delivery, given its highest new FPSO earnings growth among peers. MISC can be positioned as a more diversified investment, and Bumi Armada, as a recovery play after an improved balance sheet,” explains Kong, who has a “buy” call and target prices of RM3.05, RM7.80 and 60 sen, respectively, for the counters.

Year to date, shares of Bumi Armada have slipped 17% to 39 sen last Thursday, valuing the company at RM2.25 billion.

Vigorous balance sheet clean-up
Bumi Armada was hit hard by the absence of jobs during the commodity crash of 2014, when crude oil prices plunged from a June peak of US$115.06 per barrel to US$28.76 per barrel in January 2016.



Having geared up and become asset heavy, the group booked two rounds of massive impairments on its FPSOs and offshore service vessels (OSVs), and faced unpalatably high finance costs resulting in a net loss of RM1.97 billion in the financial year ended Dec 31, 2016 (FY2016), and RM2.3 billion in FY2018.

Execution issues with its FPSO vessel Armada Kraken had led to a massive impairment of US$119 million in 2018, and the sudden termination of its wholly-owned subsidiary Armada Balnaves Pte Ltd’s (ABPL) FPSO (Armada Claire), worth RM1.46 billion, by Australia’s Woodside Energy Julimar Pty Ltd did not help. Armada Claire is still available for redeployment, its website shows.

Since then, the group has taken steps to address its balance sheet woes which include exiting the offshore marine services (OMS) segment to focus on the more lucrative FPSO business, and repaying its debts.

Its OMS segment, which ran a fleet of 10 vessels, saw the disposal of four ice class (ships that operate in icy weather) OSV vessels to Russian oil and gas giant PJSC Lukoil for US$44.5 million (RM186.6 million) this year. It said US$38 million of the proceeds would be utilised to pare down its borrowings and US$6.5 million for working capital purposes.

Currently, the group has a fleet of seven FPSOs (four wholly owned and three jointly owned), one liquefied natural gas floating storage unit, and a partially-owned FPSO under construction.

It is noteworthy that despite its massive bleed, Bumi Armada did not resort to a cash call, as had been announced in recent years by other major O&G players such as Sapura Energy Bhd (RM4 billion), UMW Oil & Gas Bhd (now Velesto Energy Bhd, RM1.8 billion) and Icon Offshore Bhd (RM250 million).

It did, however, secure a US$75 million loan from major shareholder Ananda Krishnan who owns a 34.9% stake in the company via his vehicle Usaha Tegas Sdn Bhd, albeit a smaller size than initially planned.

Although Bumi Armada chalked up about RM4.5 billion in accumulated losses between 2015 and 2018, the group is likely en route for its fourth consecutive year of profit, raking in RM372.01 million in the first half of FY2022 on revenue of RM1.15 billion.

However, the group’s debt remains sizeable at RM6.37 billion against cash of RM717.38 million as at June 30. Net gearing stood at 1.2 times.

Comparatively, its peers Yinson Holdings Bhd has a net gearing of 1.54 times, while MISC Bhd’s stood at 0.52 times. Note that Yinson has perpetual securities amounting to RM1.8 billion, which are categorised as equity in its balance sheet.

IT would appear that Bumi Armada Bhd stands a high chance of securing a new floating production storage and offloading (FPSO) project in Angola — if project watchers are proven correct — which, along with other bids should they be won, could put the oil and gas player on an even stronger footing as it charts its recovery after a significant effort to fortify its balance sheet.

According to analysts and industry reports, Bumi Armada is said to have bid for French player TotalEnergies’ Cameia FPSO vessel project as well as Italian player Eni’s Agogo FPSO build-own-lease project, both of which are based offshore Angola.

While no official announcement has been made on the jobs in Angola, oil and gas journal Upstream reported on Sept 14 that TotalEnergies may have signed a letter of intent with Bumi Armada at a signing ceremony “scheduled for [Sept 12] but there was no certainty as to whether it took place”.

The group reportedly “completed the front-end engineering and design work for the floater late last year and had a very competitive commercial proposal”.

When contacted, Bumi Armada declined to comment.

“Apparently, based on the Upstream article, Bumi Armada might have received a conditional letter of award for the Cameia FPSO, and the condition is several months of pre-engineering work to be done on the FPSO before a formal award is made by February 2023,” UOB Kay Hian research analyst Kong Ho Meng tells The Edge.

“However, we think this alone may not move the share price much given there are, surprisingly, still conditions on the offer. Also, the current scope is small as it is engineering, procurement and construction-only, which means Bumi Armada will only earn during the construction phase of the FPSO, and not during the charter period as TotalEnergies will own and lease the vessel.

“There is still other FPSO demand where Bumi Armada can be keen, given it has balance sheet room for at least one large project, for example Repsol’s new FPSO job in Mexico’s Block 29, where the deep water discovery and a smaller find called Chinwol are located,” he suggests.

Analysts who declined to be named concur that Bumi Armada is holding its bids close to its chest, and that the Mexico job is most certainly one of them.

“Yinson would have been a strong contender for the project but apparently has too much on its plate now, which then reduces the competition for Bumi Armada,” Kong adds.

https://www.klsescreener.com/v2/news/view/1054121/bumi-armada-s-potential-step-forward-on-recovery-path

Hahaha!

Where is the 1.00?

I hope so also. Even 0.90c limit up I will become instant millionaire...I hold huge shares in velesto..

TP of 0.25c and above is possible subject to..
1) If Brent price can maintain usd 95 and above throughout 2023/2024
2) Increase in daily DCR rate (in 2019 Velesto received usd83,000 and above for DCR contracts from Roc oil and Mubadala project)
3) Improve in qtr earning (3rd qtr onward)

George99

Thought tp myr 1.00

1.00 long way to go..stock market unpredictable

TA’s Malaysian oil and gas sector coverage includes companies like Petronas Chemicals Group Bhd, MISC Bhd and Velesto Energy Bhd.

On Petronas Chemicals’ shares, Chan said TA has a target price (TP) of RM9.19 and “hold” call for the stock.

TA has a TP of RM7.10 and “hold” recommendation for MISC, besides a TP of 10 sen and “buy” call for Velesto, she said.

I think there's some error here. TP 0.10c for velesto, cannot be isn't it. Now velesto trading @ 0.12c. I think it's literally mean 0.12c (current price) + 0.10c = TP 0.22c...guess

TA is maintaining its 2022 and 2023 Brent crude oil price assumptions of US$105/barrel and US$90/barrel respectively.

“Against this backdrop of resilient and heightened oil price, we are ‘overweight’ on the (Malaysian oil and gas) sector,” she said.