https://www.pharos.energy/investors/press-releases/tgt-infill-development-drilling-programme/

Very good news for Bumi Armada's TGT FPSO in Vietnam. Drilling works of 4 new wells have concluded. 2 more wells to be drilled in Q3 2022. These 4 new wells will extend the production plateau.

Note that Bumi Armada has a contract extension in place until 2024. Will these new wells coming on stream, there is a high likelihood of the contract being extended further as the field will be producing for 5+ years.

Also, to tie back the wells to the FPSO, Bumi Armada might be able to recognise one-off variation orders.

Results likely out within the next 10 days, good luck all!

Also, Kraken production issues seem to have been sorted. Bumi Armada might loose 1 to 2 weeks worth of revenue (~RM15 to 30mil hit to net profit in Q4), but that's just a small blip in the big picture.

Problems with Kraken. Need to keep an eye out for it!

Expecting around RM150mil core net profit, with upside potential up to RM180mil underpinned by steady JV/associates earnings contribution.

At RM150mil per quarter (RM600mil per year), it is under 5x price-to-earnings ratio.

Next year, earnings will jump with Armada Sterling 5 contribution from Q3 2022 onwards.

Also, expect contract for the SC vessels in the Caspian sea to materialise in the next few months.

Downside at the moment is that Armada Sterling 5 deployment may see delays due to issues at Sembcorp Marine. Nothing concrete at this point, but be prepared for any delays. The soft share price over the past week may be due to insiders selling as they know about this.

Big month. Results in under 4 weeks time!

@Goldberg, Armada and SIP are not the JV partners in the bid. SIP is on its own, Armada is with MTC and Shapoorji. Plus, the tender has been further postponed.

Slow and steady boys, slow and steady.

Chill guys. This is already a value buy at RM150mil/qtr (which is still P/E of less than 5x at current price levels!).

Let's not get too caught up in the macro, and focus on the fundamentals as long-term investors.

Slow and steady. Expecting some good news soon :)

Fundamentals are intact. Keep holding.

https://feed.stamdata.com/documents/NO0010950272_IB_20210909.pdf

https://feed.stamdata.com/documents/NO0010950272_CI_20210531.PDF

All in all, this is good news for Armada Kraken! It looks like Bumi Armada will be earning higher revenue/income from the FPSO as a result of "lower lease charter credits driven by higher uptime at Kraken", and potentially also "additional production enhancement scopes" which could be recognised as variation orders ("VO").

Kraken

Average production of 23,690 Boepd (33,603 Boepd gross) remains in line with the Group’s 2021 guidance, which remains unchanged. The reduction from 2020 reflects the impacts of a riser tether repair and natural declines. Production and water injection efficiency remained strong at 90% and 92%, respectively, and the FPSO continues to perform well. To date, a number of maintenance activities have been undertaken allowing for the deferral of the planned shutdown to 2022. Subsurface and well performance remains good, with aggregate water cut evolution in line with expectations. A successful 3D seismic campaign was completed in July, providing valuable data for the Group to evaluate fully the development potential of the western area of the field, in addition to supporting ongoing optimisation of the main Kraken field, including potential infill opportunities.

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

Guidance and outlook

Operating costs are expected to be approximately $300 million, reflecting lower lease charter credits driven by higher uptime at Kraken, additional production enhancement scopes and topside maintenance activities at Magnus, higher diesel costs and sterling strength

https://www.enquest.com/media/press-releases/article/2021-half-year-results

Final Update

TP Revisions post results:

JF Apex - 0.42 to 0.55
CIMB - 0.48 to 0.55
Kenanga - 0.50 to 0.53
RHB - 0.51 to 0.57
Maybank - 0.52 to 0.58
Affin Hwang - 0.55 to 0.59
PublicInvest - 0.58 to 0.64
MIDF - Maintain at 0.69
AmInvest - 0.72 to 0.76
Hong Leong - Maintain at 0.80

Across the board, TP revised upwards, banding around the mid to high 50 sen region.

TP Revisions post results:

Maybank - 0.52 to 0.58
CIMB - 0.48 to 0.55
AmInvest - 0.72 to 0.76
RHB - 0.51 to 0.57
PublicInvest - 0.58 to 0.64
JF Apex - 0.42 to 0.55
Hong Leong - Maintain at 0.80

Unknown - Kenanga / Affin Hwang / JPMorgan

Maybank Report: https://mkefactsettd.maybank-ke.com/PDFS/232479.pdf

Can someone please share RHB and CIMB reports.

CIMB Bank upgrade TP from RM0.48 -> RM0.55.

That's it for this week. Have a good weekend folks!

Can forget about Woodside. As far as I am concerned, after reading the court documents, it is clear that Bumi Armada failed to fulfil its contractual obligations, and hence Woodside had solid technical grounds to terminate the contract. The truth is, the contract was terminated for convenience because the project no longer made economic sense. But it is Bumi Armada's own failings that gave Woodside that opening.

Assume nothing from the court case.

Maybank upgrade TP from RM0.52 -> RM0.58. Will share report when available.

The Petroleum Industry Act has been signed into law by the President of Nigeria.

Previously, this was a stumbling block to the final investment decisions of a bunch of offshore projects.

One of these projects is Eni's Zabazab-Eta development (120,000bopd).

During the bidding rounds back in 2017/2018, Bumi Armada was the favoured FPSO operator.

The project may be sanctioned within the next few months.

Will this be Bumi Armada's big break?

If indeed so, the delay has been a blessing in disguise. Bumi Armada has been able to clean up its books, and the project financing will be available at much fairer rates.

Kinda unfair though cause I think insiders were buying the past few days with prior knowledge of the Atlanta a phase 2 Fpso.

FPSO future is bright! Lots of FPSOs in the pipeline for the next two or three years.

Limbayong might be going to SIP per Upstreamonline.

From AMBANK:

We maintain BUY on Bumi Armada with a higher sum-of -parts (SOP) based fair value of RM0.76/share (from an earlier RM0.72/share). This also reflects a neutral 3-star ESG rating and implies a FY22F PE of 6x, half of its 5-year average of 12x.

•Our FY21F–FY23F earnings have been raised by 27 % from a 5-percentage point increase in EBIT margin assumption to 50% for the group’s floating production, storage and offloading (FPSO) division.

•This stems from the group’s 1HFY21 core net profit(excluding net impairments of RM72mil) of RM375mil (+78% YoY) coming in above expectations, accounting for 69 % of our FY21F net profit and 78% of street’s. As a comparison, 1H accounted for 39%–49% of FY18–FY20 core net profit.

•The group’s 1HFY21 revenue inched up 2% YoY while EBITDAwas flat. However, 1HFY21 core net profit surged 78 % YoY from a 23 % drop in interest costs, 9% decline in depreciation and a lumpy turnaround in associate contribution.

•Bumi Armada’s 1QFY21 core net profit rose 39% QoQ to a record RM227mil, the highest quarterly earnings since listing in 2011. This mainly stemmed from a lumpy 5.6x jump in associate contribution, RM17mil reversal of deferred tax provision and positive minority charges from variation orders at operation and maintenance operations.

•The 2QFY21 operating profit of the main floating production & operation (FPO) segment, which accounted for 87% of group revenue, slid 5% QoQ to RM345 mil due to higher lumpy operating costs for Armada Olombendo. Nevertheless, the vessel availability was high at 99% (vs. 98% in 1QFY21), translating to an 8% QoQ rise in FPO revenue to RM533mil.

•The offshore marine services (OMS) disposed of 2 vessels in 2QFY21 which partly led to this segment’s operating profit to drop 42% QoQ to RM7mil. Even so, this segment’s revenue rose 22% from the in -chartering of third-party vessels whilethe dwindling number of vessels caused utilisation rates to rise to 70% in 2QFY21 from 44% in 1QFY21.

•Meanwhile, the group’s firm order book slid by 6% QoQ to RM14.9bil from revenue depletion, partly offset by a weaker ringgit. Together with optional extensions worth RM9.5bil, this translates to 9.5x FY21F revenue.•Besides the existing projects that continue to support its cash flows, Bumi Armada plans to further pare down its debt and fully monetise its OMS assets, in which 6 of the 14 remaining vessels have already been earmarked for disposal.

•Valuation-wise, we view Bumi Armada’s FY21F PE of 3.5x as unjustified vs. FBMKLCI’s 17x as the group has stabilised its core earnings and balance sheet health with the optimisation of Armada Kraken’s operations since 4QFY20.

I've been in at 0.235 in Aug 2020, sold in Sep/Oct 2020 at 0.275, then buy back at 0.225 in Oct 2020 and holding since then. Bought 350k back then and another 50k last week at 0.395.

I'm investing purely based on fundamentals. If and when Bumi Armada's prospects are no longer good or when the stock price appreciates to a level I deem high enough, I will sell. I purchased this at 0.625 in Jan 2017 and 0.72 in Aug 2017 and sold off by Oct 2017 as the outlook worsened and the stock ran high.

Always don't be a slave to the stock. Sell when need to. Realise your gains, or even losses if need to.

@ITreeinvestor, oil price doesn't impact Bumi Armada earnings much in the short-term. However, consistently higher prices will mean higher chances of obtaining new FPSO contracts, or in securing extensions to existing contracts. Hence, the impact will be felt in the longer-term. Stock price fluctuations due to oil price movements is mainly based on the market sentiments, not due to sensitivity to the earnings.

@ITreeinvestor, yes Operating Profit before Impairment is an important metric, but it ignores shares of results for JV and associates. Most of Bumi Armada Fpso projects are now done as JV/associates.

@pingdan, I won’t pay much attention to that. Of course the utilisation rate will go up as they dispose of all their unutilised offshore vessels.

More good news: Net gearing is finally below 2x! It is now at 1.94x

Debt analysis:

https://i.ibb.co/p22yMRH/image.png

Good continued progress!

Quick assessment of the actual core profits of the Company. Let me know if there's any error below.

Net Profit RM139,857,000
Impairment RM103,734,000
Writeback of Impairment -RM4,024,000
Gain on Disposal -RM12,111,000
Gain on FX -RM772,000

Core Net Profit RM226,684,000

This INCLUDES impairment of RM104mil. Might be even better than it looks!

Profit RM140mil! Need to delve in deeper to assess the results. Well done people!

Yinson enters exclusive negotiations with Enauta for Atlanta floater

The day of reckoning beckons!

I'm quite excited for the coming report! :)

Yinson has been downgraded at Kenanga

I mean to be honest, it's not like Yinson will purposely bid for a project that is net negative. This had a long-term charter, and was relatively large. In a few years Yinson has the potential to self-fund new large scale projects solely from the FCF of its ongoing projects.

I'm a bit sad at this though, Yinson now has "ammo" to bid for a large scale project in West Africa. I want Bumi Armada to land one large scale project there. Hope Yinson doesn't spoil the party.

Petrobras again cancels Campos basin floater tender

Brazilian operator fails to reach agreement with Yinson for charter of the Parque das Baleias FPSO

https://www.upstreamonline.com/field-development/petrobras-again-cancels-campos-basin-floater-tender/2-1-1055837

The calm before the stormmmm

The project progress has been impacted due to late receipt of Rely Upon Information from ONGC and Covid-19. As per Lender’s Technical Advisor (LTA) Crondall Energy Consultants’ report, the project has achieved an overall progress of 53.66% as against originally planned progress of 53.29% till Dec 2020. As per LTA, Baseline 2 schedule was updated (on 26th November 2020)
and incorporates the impact of COVID-19, delayed Rely upon Information (RUI) and Company Provided Equipment (CPE).

Company had requested ONGC a waiver of Liquidated Damages for 6 months delay attributable to Baseline 2 schedule, and had submitted an Extension of Time Change Order. ONGC has granted extension till 3rd May, 2022 and waived off the liquidated damages for 6 months delay. However, any significant execution delays or damages imposed (if any) shall have impact on revenue visibility and therefore constitute a key rating sensitivity.

https://www.careratings.com/upload/CompanyFiles/PR/14042021062522_Shapoorji_Pallonji_Bumi_Armada_Godavari_Private_Limited.pdf

Wasco has completed the construction and load-out of the ABB E-house module for ONGC's KG-DWN-98/2 Cluster II floating production, storage and offloading (FPSO) vessel.

The E-house module is a modular outdoor enclosure designed to house a range of electrical, automation and telecom equipment and ancillaries. The module was fabricated at Wasco's yard in Batam, Indonesia. Sembcorp Marine is working on the conversion of very large crude carrier Ariake into a FPSO for the Cluster II project. Conversion work is underway at Sembcorp Marine's Tuas Boulevard yard in Singapore. ONGC is targeting the project to go on stream by mid-2022.

https://connect.ihsmarkit.com/upstream-insight/article/phoenix/4061787/wasco-completes-e-house-module-for-ongc-fpso

Construction of Shapoorji Pallonji Bumi Armada Godavari Private Limited's (SPBAG) FPSO Armada Sterling V is progressing well with the submerged turret production system (STP) being fitted in late June.

The STP system was fabricated by National Oilwell Varco at their NOV Profab Facility in Batam, Indonesia. Asian Lift's derrick vessel Asian Hercules II lifted the system for transportation on a barge in Batam. The vessel was utilised during the fitting of the STP system onto FPSO Armada Sterling V using its 3,200 MT crane at Sembcorp Marine's yard in Singapore.

Delivery of the FPSO is expected to be delayed from the planned date of late 2021 due to initial construction work affected by coronavirus disease 2019 (COVID-19) restrictions in several countries manufacturing components for the FPSO. The FPSO Armada Sterling V will be deployed for ONGC's KG-DWN-98/2 Cluster II project on a nine-year charter with the option to extend the duration for another seven years on a yearly basis.

https://connect.ihsmarkit.com/upstream-insight/article/phoenix/4071003/fpso-armada-sterling-v-progress-update

The Armada Tuah 24 and Armada Tuah 25, both of 5,000 bhp AHTS, have been sold and renamed to Lian He Hai Gong 5002 and Lin He Hai Gong 5001 respectively, in China.

Both of the 60-tonne bollard pull vessels have been sold by Bumi Armada to Fujian United Ocean Engineering in early July 2021. The vessels have been inshore China since late March, after completing their voyage from Malaysia.

The sale of these two AHTS vessels is part of Bumi Armada’s divestment plans which started in early 2021 with the sale of 11 offshore support vessels.

https://connect.ihsmarkit.com/upstream-insight/article/phoenix/4028886/bumi-armadas-two-ahts-vessels-sold-and-renamed

Bumi Armada’s derrick pipelay barge Armada KP1 is to begin a pipelay scope that involves 16 km of pipelines in the Kutei Basin on the JSN (Jumelai-Sisi-Nubi) project in the Mahakam Offshore PSC (production sharing contract).

It will be part of the JSN campaign where Meindo Elang Indah will deploy multiple vessels including its derrick pipelay barge Eka Nusantara 3000, Bumi Armada's derrick pipelay barge Armada KP1 and Eka Nusantara Line's AWB (accommodation workbarge) Eka Pasifik 300 for the installation campaign from around 19 March to 15 October.

Meindo Elang Indah is responsible for the EPSCC (engineering, procurement, supply, construction and commissioning) for the JSN project. The contract covers three new steel jacket WHPs (wellhead platforms) that will be installed in separate locations. The platforms denoted as North Sisi (WPS-3) and North Nubi (WPN-4) will be installed on Sisi-Nubi field, while Jumelai 1 (JML-1) will be on Jumelai field.

Eka Nusantara 3000 will do platform installation, while Armada KP1 will undertake the pipelay scope.

https://connect.ihsmarkit.com/upstream-insight/article/phoenix/3918574/armada-kp1-to-begin-pipelay-in-kutei-basin-for-jsn

armadatuah2017 impairment is coming as dew quarters not recorded much from the sc

SC had already been impaired in Q1 2020, for 2 yrs. Enough for now. Will impair again in Q1 2022 if needed.

armadatuah2017 2022 only Lukoil field ade campaign la.

-> Correct, but contract is given out in advance. Announcement might be imminent if the campaign starts in 2022.

Anything less than RM120m would be a disaster!

Should be positive. Expecting around RM150-160m, minimum RM140m and could go as high as RM180m. Excited!