That import GST for moving a drilling rig from a tax free area to the drilling area within Malaysia has always been paid by the oil company, which is then claimed as input tax by the oil company. This amendment has no benefit to drilling companies at all.

Oil and gas companies already benefited a lot of tax savings by using Labuan companies. I will be shocked if the government is willing to give more tax incentives.

Actually UMW running this company made things worse. Whatever UMWOG's fund raising activity will have impact on UMW. For example, the more UMWOG borrows, the higher the gearing ratio will be for UMW and this will affect UMW's bond rating. This really slow down the whole fund raising process. It's good that both of them are separated. UMW never has a good record of running oil and gas companies anyway and most of them are losing money.

Araj87, tell us more about those bullsh*t. Maybe compare to what you have experienced while in Petronas, since both are GLCs.

This company ... if you can wait 10 to 20 years, this is a no-brainer buy, if you expect some miracle within 1 or 2 years, i really can't see the light yet. 100% utilization does not guarantee profit. The only thing they can promise so far is cash flow positive. Apart from drilling rigs, they also have workover rigs which are not contracted at all. Not even sure now who is their head for the workover operations. They also have a few plants that do pipe threading which are not profitable either. But I do know they are still maintaining the same big group of management team. The retrenchment they have been talking about are all low position staff and rig crew. This is how GLCs work, as always.

That is an average of USD144m per rig, and they are brand new rigs. I wonder how the UMWOG management will argue their way out with the auditors on asset impairment.

Cash flow positive doesn't mean profitable. Petronas will give priority to locals but price must still match to market. And Petronas will not pay you if you screw up even if you are GLC. Someone also pointed out N4 is due for 5 yearly dry dock. This rig will earn no income for a few months and few millions of USD will be spent for this.

GLCs can never be compared to entrepreneur driven companies like Senergy or Armada. The management team in a GLC will work for their own self first because they don't own the company. If the company loss money, worst thing is no bonus. None of them will ever be retrenched.

Whether impairment will be reversed or not depend on whether they can be profitable when all the rigs are contracted out, which is happening in Q3. For me, I will just refer to the open market value of a new rig. The last I check, ship yard was offering around USD155m for a new rig. Most of their rigs were purchased at a cost between USD180m to USD240m during the good times.

Would the warrant command any value if price remains below 0.395? Impairment will only be evaluated in Q4. This company doesn't impair on quarterly basis. But the Q3 result will tell whether this company can make money with all their rigs contracted.

3rd quarter result will be announced in November. If all 7 rigs contracted out still loss money, really speechless.

They should have done the RI way back in 2014 when market was good.

Careful. Some promoters have been calling for a buy since 80 sen. Now 30 sen, so buy some more to average down? These promoters went to the extent of deleting their previous posts when the share price down further.

Will return to the black within 3 years. Finally some honesty from the management. It will return to the black within 3 years if their assumption materialize. If the day rate remains the same for the next 10 years, I really wonder how many cash call can they make.

Please remember they don't get the full day rate all the time. Some time, they get repair rate, breakdown rate, moving rate etc. and they are all below the agreed full day rate. And oil companies can always make them go on standby at zero rate as and when they like. Nowadays, oil companies are also making them pay for the additional equipment needed for the operation. This business is not easy to do nowadays. By the way, what happen to the Middle East entry they talked about few years ago?

Proven that current day rate is below their breakeven point. Even if all their rigs are contracted out will still loss money. The only thing that can save them is high oil price.

If the RI really rejected, not sure how PNB will save this company. Maybe will end up like THHE. But likely RI will be approved because there is no door gift in this EGM. Perhaps not expecting minority to come and vote because it's really done deal. Even if RI proceeds, don't expect price will fly, it will remain below RM1 for some years. If Q2 continues to record loss, it is obvious the current day rate is below the company's breakeven rate. Any contract awarded will only reduce its loss, will not make them profitable.

Actually the debt was taken to buy assets which was used to generate profit and all shareholders has a share of that profit, which now turn into a loss. I think their misstep was buying too many assets at high price, which now has lost its value while the debt the remain the same. So someone has to make up the shortfall i.e. the shareholders. And now PNB volunteered to swallow the whole RI to make up the shortfall, just need all of your approval. You can try your luck on privatisation but, I believe the NTA is much lower than that. Impairment can be done to reduce the NTA before doing a privatisation.

If umwog can roll over their loan, there is no need for this RI exercise.

Surely some sort of collaboration would have been made with significant minority shareholders to support the RI during the EGM. If PNB doesn't even know how to do such homework, Datuk ARA really no face already.

I am not sure if price will go up or not if this RI can't proceed. One thing I am very sure is that this company is in urgent need for the money from this RI to pay off its loan and suppliers. You can ask some suppliers dealing with this company. They are not getting paid yet as this company is hopeful of getting the cash from RI before paying them. Imagine without the cash from RI and this company defaulted its loan repayment, you still think share price will go up?

MGO waiver firstly needs SC approval. But it is likely that SC will leave it to the minority shareholders to decide in the EGM.

PNB can't vote in this EGM.

The management should also be changed. They just got too comfortable with that "there is always PNB behind us" mentality. Both UMW and UMWOG management are like that. In the end, it is the unit holders that will bear the brunt by getting a lower amanah saham return.

Before charter rates go up, oil price has to go up first. This is when oil companies restart their drilling campaign. It will take some time to mop up the rig oversupply. Only then, the charter rate will go up. Will the oil price ever go up? Opec will not continue to control production because many members are not following the quota.

That current NTA of RM1 is just a number. I am sure PNB knows this company doesn't worth that much because impairment has not fully dialed in. Those low charter rate contracts are probably secured just to buy some time from having full impairment effect.

Unless PNB can arm twist Petronas to award contracts at a higher than market rate that can allow UMWOG to be profitable, it's really hard to see how this company can be back to the black within 2 years. Seriously, if this company really got potential, why not PNB does an MGO, take this company private and re-list it when the oil price recovers (which most people here think will happen soon) at a higher IPO price.

Uma, if company is still in loss position with 7 rigs chartered out, there will be another round of impairment end of this year. Looks like 30 sen is still not cheap enough to enter into this counter assuming this impairment has not been factored into the current price.

araj, you are employee, vendor or client of umwog?

James, PNB can't vote, so it's minority that attend the EGM to decide on this.

You should read the proposal. This RI needs minority approval. Otherwise, what is the EGM for. PNB will underwrite everything even if minority does not subscribe the RI but minority approval is needed. This is especially so as PNB is asking for MGO waiver. Hopefully some collaboration has been arranged with significant minorities like EPF and KWAP to ensure this RI will go through. Advisor should also be giving a positive recommendation soon.

Even if you believe price is low and will bounce up one day, to be safe, better buy only after the RI is approved. Without the RI, PNB can't come in and save this company. And you will never know, historically, there were cases where RI was rejected by minority in EGM (just like how everyone thought the previous merger with Icon would happen with PNB and Ekuinas involved).

Well then go ahead and ask them then during the EGM instead of assuming. I am sure the President and CFO are still holding their IPO shares. Ask them if they will subscribe the right share. See if they will put their hard earned money where their mouth is. Ask the Head of Business Development as well. This is the person who has the first hand info whether the industry is recovering, stagnant or slumping further.

Trust me, if you have insider info of a company that will fly, you will bet into it even if you have to borrow. Forget about those personal financial issues. And the management does have all this insider info.

Most of us will agree that the management knows this business better than anyone of us. Well, take a look at their announcement and see if their principal officers have been buying or selling. This will give you an indication on the future potential of this company. Alternatively, you can attend their EGM and ask each of their management team member if they still hold any shares and if so, whether they will subscribe the right share. Do also take a look at whether the management have been buying or selling somewhere end December 14 and beginning of year 15. You will note that the management does know when to exit compared to most of us.

PNB has committed to subscribe all right share at 30 sen. But it will look like a bailout if PNB to subscribe at 30 sen when market price is lower than that. PNB is still answerable to unit holders. Maybe PNB will justify the premium by saying that they are getting a MGO waiver from minority.

Actually, the right issue is to rescue this company. Otherwise, it will go into PN17 and not able to service its loan.

Well, it won't dip any further but you must wait. This is what the UMW acronym stands for ... U Must Wait.

Next month, this company will announce its Q2 result. In this quarter, a lot of their rigs were chartered. If this Q2 period still cannot be profitable, it's a wake up call to all the supporters here.

This counter can play for short term rebound. If you want to go in to bet for long term oil and gas recovery, firstly, there is no hurry, it will take some time for oil price to go up, secondly, there are plenty of better managed or well-diversified ones like Bumi, Sapura Energy, Uzma or Waseong that are entrepreneur driven. Any price below 30 sen is a no-brainer buy for short term play cause PNB die die want to stick to the right share price at 30 sen. Most companies will not put up a price at proposal stage.

Maybe there will be some price support at 30 sen to ensure that the RI is successful.

Umw will give out their umwog share no matter what. This will pass the buck to pnb on saving umwog.

Egm likely end of July now.

The Fed has increased the interest rate. Those oil and gas companies heavily in USD debt will have to pay more interest.

Dialog got downstream, not so much affected. Coastal also badly affected from RM3 now is RM1 something. This umwog just keep on buying asset during the good times without doing a stress test on their investment model. Well, when there is always pnb behind them, what is there for them to worry.

Umw will give out the shares of Umwog as dividend. Already approved in umw's egm. Umwog is too big for umw to hold and consolidate its liabilities into umw. It will severely affect umw's gearing besides dragging its financial result down. I am sure very about this ever since from the beginning. It is by giving out the umwog shares that pnb can hold umwog directly and thereafter, underwrite the entire right issue.

Price will drop once the right issue is given to shareholders. Based on current price of 0.515, the price will drop to around 0.35 (known as theoretical ex right price). In order to be neutrally impacted by this price drop, shareholders must subscribe to the right share at 0.30 so that the average cost is also reduced at the same time. Shareholders can also sell the right issue but I doubt it will command much value and need to sell within 5 workings days normally. If you do nothing, you will lose out on the discounted value.

RI is still better and fairer than some private placement done without any transparency of who gets it at a good price, as done by another reit recently.

Egm early July, maybe timeline will be announced during the egm. Normally, should complete by September.

Electric cars are battery powered but that battery needs to be charged by electricity generated by TNB from various energy source such as fossil fuel, coal or hydroelectric.

Electricity to charge electric cars still needs to be generated from an energy source. Some generators run on fossil fuel.

Those buying now have to prepare some money to subscribe the RI as well to avoid being impacted by the dilution.

These people will have to subscribe the RI to average down their cost. Those that bought a lot at the peak of RM4.40 will suffer the most.

People are buying in hoping that the current Saudi Qatar conflict will lead to oil price rise.

EGM should happen early July so that the RI can be approved before end of July when UMW shareholders get their UMWOG shares as there is a risk that these shareholders may sell the UMWOG shares immediately.