For the KG 98/2 project in India, we can see the status summary of latest progress as of Feb 2022 at the following link: http://www.cspm.gov.in/ocmstemp/PROJ_SUMMARY?prcd=N16000247&stat=O

The FPSO project (Package IV) is the further along at 81.68% compared to the other 4 packages (total 5 packages awarded in total).

Lots of positive news for Bumi Armada recently actually. All the more baffling for the fall in share price, as the company has confirmed two key matters, that are:

1) The proceeds from the 3 ice class vessels sold in Russia had already been received in full and used to pare down debts in January 2022.

2) The two SC vessels in the Caspian Sea are not materially affected from the Russia-Ukraine war.

Now, on to the positive news:

1) US$50mil contract secured with Lukoil for the two SC vessels. Recall, these SC vessels were sitting idle for more than two years! They've been incurring depreciation, impairment and other misc charges. Now, with the contract, we expect it to cover the depreciation and other misc fixed costs (such as salaries), and also no further impairment. On top of that, we can expect minimum of 10% net profit margin. All things said, this will reverse the losses, and lead to some profits. So the net impact to the bottom line won't just be the 10% net profit margin, but rather the 10% + the losses sustained the per quarter in the past.

2) Mumbai Port FSRU contract is going ahead as planned, according to various Indian sources. It's a small 50-50 JV project with Shapoorji that will see at most around US$5-8 mil of net profits to the company per year, but still something.

3) TGT field is very healthy in Vietnam. Field operators seeking to extend field license from the Vietnam government till 2031 (they already have a prior extension to 2026). Current FPSO contract is only until Nov 2024. Very high chances of further 2-7 years extension, and this is further strengthened by the fact that there is active drilling going on at the field. In 2022 4 new wells were drilled, and in 2023 2 new wells will be drilled. All in all, this will inevitably extend the production plateau, benefitting Bumi Armada.

4) Active bidding for 2 contracts in Angola. One is with Eni in the Agogo field in Block 15/06, where Bumi Armada already has a FPSO, the Armada Olombendo. Another bid is with TotalEnergies in the Cameia-Golfinho field. For this, their competitors are MISC and Yinson. Strong chance Bumi Armada secures either one project. For the Eni project, they stand a strong chance as it is a field in which they already have an existing FPSO. For the TotalEnegies project, a strong chance as Yinson and MISC are busy with their multiple Brazil projects. With the improvement in the debt profile and sale of OSV assets (and likely sale of Armada Claire FPSO), it is possible that Bumi Armada could take on one of these projects (but not both) without the need for a rights issue.

5) Bumi Armada along with Shapoorji are unlikely to be penalised for the delays surrounding the Armada Sterling V FPSO, as the issues there seem to be with field owner ONGC. On the FPSO side, Bumi Armada-Shapoorji appear to be on-track to deliver their side of the bargain.

Also, read in the JP Morgan report that management has indicated Armada Claire will be sold off within the next few months. No other research report mentioned that the sale would occur in the matter of months.

I'm still trying to understand posts here that talk about how if oil prices skyrocket, Armada's price should go up.

Armada's revenue is not dependent on oil prices. If oil goes up to USD200 per barrel, its revenue is going to remain unchanged.

What it does need is oil prices to be at a minimum level so that it's clients (whose livelihoods are dependent on oil prices) can pay the bills.

As long as oil prices do not crash, Armada is in a good position.

Oil prices skyrocket, makes absolutely no bloody difference for the company.

---------------------

Yes, true, but higher oil price environments means three things:

1) Lower likelihood of operators defaulting on payment and/or terminating the contract prematurely due to cashflow and/or yield issues
2) Higher likelihood of contract extensions being negotiated and exercised as it becomes more cost effective to extend the life of existing producing assets by drilling new wells and tying back new fields
3) Higher number of sanctioned projects, meaning more opportunities for FPSO operators such as Bumi Armada to get new contracts

From Bumi Armada IR:

Thank you for reaching out.

The Group’s day-to-day operations in Russia has not, at the moment, been materially affected by the conflicts between Russia and Ukraine. We would also add that operations in Russia form only a minor part of the Group’s overall operations.

We stand guided by the applicable Listing Requirements threshold for disclosures. Rest assured that BAB will make the necessary disclosures if there are developments that warrant an announcement or disclosure to Bursa as per the applicable Listing Requirements.


Thank you.

Bumi Armada Investor Relations

Full PDF: https://www.pharos.energy/media/y3rfhnaj/final_pharos-2021-preliminary-results_16-mar-2022.pdf

Pharos Energy FY2021 results have been released. They are part owners of the TGT field Vietnam, at which Bumi Armada has an FPSO. The extension contract for the FPSO runs until 2024, but very strong chance of further extension as new wells have been successfully drilled, and more are expected to be drilled in Q3 2022. Field extension had been previously granted to 2026 I believe, but now Pharos Energy says that a further extension will be applied from the Vietnam government, until 2031.

Meaning which, Armada TGT FPSO has potential upside in terms of contract length of between 2 (year 2026) to 7 years (year 2031), from the end of the original extension to 2024.

So much b*lls**t from Bumi Armada management. Can do exclusive session with CIMB and other analysts, but cannot provide this information to their public shareholders via a Bursa Malaysia announcement.

Armada not subject to cutting makmur as almost all of its profits is generated outside of the Malaysian tax jurisdiction

All shareholders here should exercise their right to request for an update on the Russia situation from the company's management.

Write to Bumi Armada IR team:
Email: ir@bumiarmada.com

The more who write in to them, the more likely they will be to issue an update on this matter to Bursa Malaysia as an announcement.

@Thirai, one thing to note, I do not believe the JV/Associates order book is consolidated in that figure. At the very least, I am 100% certain the Sterling V (associate) figure is not in there.

Either the market is VERY CORRECT (something terribly bad is happening behind the scenes, we are not yet informed of it yet). Or the market is VERY WRONG (large gap in market valuation vs fundamental valuation).

Only time will tell, which is this.

I've looked into all of Bumi Armada's production assets, no issues at Kraken, Olombendo, TGT, Sterling 1/2/3, FSU Malta. Delays at Sterling 5 were already well known. Claire is officially on the market to be sold. OSV business only has 6 vessels left, negligible. So what's the issue???

Shocking. I really don't understand what's happening. In the super worst case scenario Russia confiscates Bumi Armada's assets over there (including financial assets), it's still shouldn't be such a huge hit to the company. Besides, Malaysia and Russia are still partners, no sanctions from our government. Most likely it won't impact Bumi Armada much, if at all.

So the question is, Brent is at $128, net gearing is at 1.55x, and what the flying fish are we doing at RM0.435/share?????!?!?!?!????!??

Another possibility is that Bumi Armada has got a decent amount of Russian shareholders that are selling down completely. But I can't say this for sure

Very perplexing. I don't follow share price movements generally, but this is a tough one to crack!

Otherwise, zero reason for the price to be dropping when Bumi Armada is as resilient as ever and is now in a position to bid for new contracts.

Price dropping probably due to 2 SC vessels in Russia. Market might be thinking these two vessels might be confiscated by the Russian state. Also, that the Bumi Armada entities and assets (including the aforementioned vessels) might be confiscated by the Russian state.

Ambank 76 to 83
CIMB 51 to 55

Will update the rest later

Good thing Bumi Armada sale of the 3 ice class vessels are completed and they've got their money out of Russia.

How funny. Bumi Armada is in the pink of health, doing very well financially. Crude oil is at $100, which should results in abundant FPSO opportunities. OSV business nearly shut down. New FSRU contract. 98/2 FPSO nearing completion. New bids for FPSO contracts. And yet we sit at under RM0.50!!!

"We caution that the new US$50mil Lukoil contract to be completed in the Caspian Sea this year by the group’s 2 construction vessels – Installer and Constructor – may be discontinued by fresh sanctions on Russia’s invasion of Ukraine."

Hmmm, so this means Bumi Armada managed to secure a new contract already? How come they didn't announce to Bursa Malaysia, if so.

We maintain BUY on Bumi Armada with a higher sum-of -parts (SOP) based fair value of RM0.83/share (from an earlier RM0.76/share), which also reflects a neutral ESG rating of 3 stars and implies an FY22F PE of 8x, half of the FBM KLCI. Our higher SOP valuation stems from the huge net debt reduction of RM1.3bil in FY21 on the back of the group’s substantively higher cash flows.We lower our earnings by 13% for FY22F and 14% for FY23F on lower margins on the floating production and operation (FPO) segment despite the group registering a record core net profit of RM593mil (excluding net vessel impairments of RM19mil) in FY21. This was below expectations as the results came in at 8% below our estimate and 6% of consensus, stemming from higher lumpy operational and maintenance expenses from Armada Olombendo and increased losses from offshore marine services (OMS), which management plans to dispose of and discontinue.For FY21, the group’s revenue slid 3% YoY mainly due to the sale of 22 OMS vessels. However, a sharp turnaround in JV contributions in India (Sterling I And II) and Indonesia (Sterling II) , supported by significant reductions in depreciation charges (-10%) and finance costs (-19%) boosted core net profit by 23% YoY.On a QoQ comparison, Bumi Armada’s 4QFY21 core net profit fell 26% to RM118mil mainly due to the halving of offshore support vessel (OSV) revenue together with higher lumpy operational and maintenance expenses from Armada Olombendo and a RM29mil impairment from the 3 ice-class OSV vessels, which were subsequently sold in January 2022. The 4QFY21 FPO revenue increased by 2% to RM480mil with th e resolution of an unplanned shutdown at one of 2 trains at Armada Kraken. However, higher costs at Armada Olombendo dragged the division’s net profit 23% lower QoQ to RM260mil.For the OMS, in which the group plans to exit, only 3 vessels remain in operation, excluding a unit currently classified as non-current asset held-for-sale. We caution that the new US$50mil Lukoil contract to be completed in the Caspian Sea this year by the group’s 2 construction vessels – Installer and Constructor – may be discontinued by fresh sanctions on Russia’s invasion of Ukraine.Meanwhile, the group’s firm order book slid by 3% QoQ to RM13.6bil from revenue depletion. Together with optional extensions worth RM8.9bil, this translates to a comfortable 8.4x FY22F revenue.Valuation-wise, we reiterate our view that Bumi Armada’s FY22F PE of 5x is unjustified vs. the FBM KLCI’s 16x as the group has stabilised its core earnings and balance sheet health with the normalisation of Armada Kraken’s operations since 4QFY20.

Debt trend analysis:

https://i.ibb.co/g6SZdMq/barm2022.png

All in all, not a spectacular results, but fairly decent.

Expect Q1 2022 to be better, as there will not be lumpy O&M costs for Olombendo and better uptime for Kraken.

After doing all the adjustments, net profit comes in at around RM140mil (equivalent to EPS of 2.37 sen).

Profit to shareholders of RM118mil (inclusive of loss on disposal of RM28.5mil).

If remove the loss on disposal, profit to shareholders of RM146.5mil. Well done!

Today be the day. Godspeed, Armadians

Why is Armada going up LMAO, our profits/loss doesn't change with Ukraine war. Unlike others like Hibiscus which produce oil. Oh well, Mr Market being ever the manic.

BUMI ARMADA is hiring for the following positions to be based at Menara Perak, Kuala Lumpur.

1. Estimation Manager
2. Completion Manager
3. Subcontract Manager
4. Construction Manager

Candidates with minimum 10 years of relevant experience are encourage to apply. For interested talent, please send your updated CV to careers.my@bumiarmada.com and indicate the position title in email subject. Only shortlisted candidates will be notified.

Also weighted interest rate has been steadily falling, higher interest loans are being repaid first. So again, sensitivity will be lesser.

Still okay for Bumi Armada, cause at the end of the day their loans were taken out at higher interest rate levels. Back then our OPR also around 3.0% to 3.5%, same with the Fed funds rate.

Only alarming if interest rates overshoots the previous levels.

In any case, Bumi Armada has benefitted significantly from the low rate environment. It will be able to stomach gradual rate increases.

If court say release FFU but you still don't, what purpose and power of court???

Results week. Good luck all!

NOT Bumi Armada

Indian-Malaysian venture submit sole bid for Limbayong floater

Malaysian national oil company Petronas has received only one bid in its latest attempt to procure a floating production, storage and offloading vessel for the Limbayong project offshore Sabah, East Malaysia.

The bid for the FPSO contract was submitted by a consortium comprising Malaysia’s MTC and India’s Shapoorji Pallonji Oil & Gas (SP Oil & Gas).

The offer is being evaluated by Petronas, but multiple market sources expressed doubt whether MTC and Shapoorji would be awarded the contract given political complexities and question marks about the economics of the FPSO.

Limbayong is a prestigious project as it is Petronas’ first deep-water oilfield development in Malaysian waters.

However, the effort to secure the leased FPSO has been a stop-and-start affair for several years, with at least two previous bidding exercises.

This has taken a toll on FPSO contractors which have chosen to focus on other business opportunities and, hence, resulted in the current sole bid.

FPSO market sources were very surprised that Sabah International Petroleum (SIP), owned by the Sabah state government, did not submit an offer, although there were some suggestions in the market that a counter-offer could materialise featuring the brand new Sabah state company SMJ Petroleum.

Market sources were unanimous that the bidding exercise is heavily imbued with politics given the field is located in Sabah waters and recent agreements between Petronas and the Sabah state government ostensibly geared toward satisfying the state’s desire for a larger slice of its oil and gas pie.

MTC with Shapoorji and SIP were among the bidders in last year’s aborted FPSO tender process. Others contractors then interested included Bumi Armada, MISC and Yinson Holdings.

FPSO specs
It is understood the FPSO requirement is for a vessel capable of producing 60,000 barrels per day of liquids, including 40,000 bpd of oil, plus about 180 million cubic feet per day of gas.

Water injection facilities for up to 75,000 bpd would also be included. The FPSO is expected to have a nameplate storage capacity of 600,000 barrels of oil.

On offer previously was a firm 12-year lease period, and the contract carried two three-year options and another for a further two years.


One industry source said that TechnipFMC is pressing ahead with the subsea works on the deep-water project.

The London-headquartered subsea giant was tasked with the design, manufacture, delivery and installation of subsea trees, manifolds, umbilicals, flexible risers, flowlines, jumpers and other associated subsea hardware for the project.

At a ceremony to celebrate TechnipFMC’s contract, Petronas chief executive of upstream, Adif Zulkifli, said: “We hope the project… will give confidence and invite potential investors to collaborate further in maturing the country’s deep-water resources.

"Apart from monetisation, Limbayong will be a platform to enhance our internal capabilities in preparing for the next deep-water projects not only in Sabah but also in other regions.”


Companies such as Bluewater, Sofec, National Oilwell Varco’s APL division, and London Marine Consultants had been suggested as potential providers, and market sources confirmed that Bluewater, APL and London Marine are competing.

The Limbayong field contains an estimated proven and probable reserve of 139 million barrels of oil and 784 billion cubic feet of non-associated gas.

Water depths at Limbayong, which straddles blocks G, J and R offshore the state of Sabah, range to in excess of 1200 metres.

Petronas is understood to have a 90% interest with E&P Malaysian Ventures on 10%.

Petronas had not responded to a request for comment on the status of the Limbayong project and related FPSO tender at the time of publication.

Not Armada, MTC

Been expecting some new contract award news, any day now for the Mumbai Port FSRU.

Heard someone say the "White Rajah of Sarawak" is involved in this whole mess, and hence the insistence of not releasing the FFU.

Looks like Serba Dinamik management rather this drag on, even though it is a losing battle.

Will Pak Karim the swindler flee the country?

Is the FFU being suppressed because it brings to light the hidden Sarawakian hands behind this scam?

Will we ever learn the truth?

This Friday or next week?

Just find out that Karim is a Malaysian Chinese. Real name is a Chinese name. But pretend to be a big shot Bumi.

Can Bursa release it in the interest of shareholders and so action can be taken against the traitorous Karim & Co?

Is they gonna releaser the SIR?

Someone Dry Dock 1 and Dry Dock 2 also now heavily underutilised

Don't know if unlucky or what, but Dry Dock 3 is such a waste of money. Now no business, spend a billion ringgit on a wasted project. Before this they were cash rich and zero debt. Could have tutup kedai and given back 70 sen per share to shareholders based on cash value just 2 years ago. Pretty sad. The future is just bleak. Heavy engineering also no margins.

Epic value destruction

Patience, younglings. Greed is a virtue of the dark side.

I'm not sure why the second Bursa announcement is necessary. First announcement already made it clear the disposal was at.a loss. Maybe they're just adding some clarity, but personally I don't see anything new here. Makes sense the sale price was arrived at using DCF

Bumi Armada is in a relatively good position now. The debt levels are at a very manageable level. The net gearing has come down to some 1.7x times. Might reduce further to 1.5x by the Q4 2021 results. In the near future, there will be room to take on project debt for large scale projects.

A new contract for the Mumbai Port FSRU is due to be finalised this month. Later this year, expect one new FPSO award from Africa, and possibly new contract win in Russia for the subsea construction vessels.

All current ongoing projects are running smoothly, with significant upside in terms of the exercising of option periods for each of them.