Not debt free, it only reduce the gearing to 0.56.

Yes, please buy this counter to support their share price. If the share price drop below 30 sen, it will be very odd for PNB to subscribe the RI at 30 sen, risking the RI exercise. Without the proceeds from RI, this company may end up in PN17. Please also remember to go to the EGM and support the RI exercise.

JamesPond, I heard that Icon's CFO has been changed recently. Perhaps that could be the reason.

PNB will underwrite the entire RI even if it is lowly subscribed by minority. Most importantly, minority must go to the EGM and approve the RI.

Yes, that RI itself already show how financially distressed they are. Hopefully the RI is approved by minority. Otherwise, this company will end up in pn17. There is no hurry in buying this company even if you think oil price will bounce back one day. Actually, the industry has already recovered with the acceptance of this new normal. It is this company that has not adapted to this new normal. Whatever contract they win from petronas does not help much because day rate is low, probably can allow them to be cash flow positive only but not profitable and also, petronas can always suspend at zero rate if oil price drop. This could be the reason why they had to sell Naga 1, thanks to petronas. Actually, if they have made sufficient impairment, they should be profitable after that because depreciation will reduce after impairment. I have a feeling that impairment is not sufficient.

With only 2 rigs working in Q1 17 what do you expect? If Q2 with 5 rigs working still loss then likely the current day rate is below their breakeven point. Without the RI to reduce their debt and interest cost, it is very hard for this company to be profitable, assuming the oil price remains below USD60.

http://oilprice.com/Energy/Energy-General/US-Shale-Just-Wont-Die-Bankrupt-Drillers-Rise-Again.html

Disowning umwog is only half of the story. Umw still holds a lot of oil and gas subsidiaries not under umwog that needs to be disposed. Remember that umwog only contributed rm700m+ of impairment in fy16. The remaining balance probably comes from these oil and gas subsidiaries. Most of these companies are overseas which will not get help from petronas.

Old rigs can still win contracts. Sometime, tried and tested rigs stand a better chance, subject to meeting technical requirement. Naga 2 and Naga 3 can also be used at the sourthern North Sea area, which is generally shallow water. All their rigs can be upgraded for HPHT requirement.

Hunter, any source to that info? I doubt US shale producers will talk to Opec as there are too many of them and don't think Donald Trump will represent them in the talk.

Noted in the TA analyst report that only 2 rigs were working in Q1 FY17. Hopefully, the huge impairment in Q4 can help reduce the depreciation cost for Q1.

Gearing of 0.5 after RI is attractive to buy. The only concern is whether oil price will drop below 40 triggering contract suspension. Having said that, now that this company is directly owned by PNB, I hope Petronas will give PNB some face and not to suspend contract as and when they like. This is a key question to ask during EGM if Petronas is still allowed or will suspend contract if oil price drop to certain level and at which level.

It will also take sometime to crawl out from negative retained earnings, at least 2 FYs because margin is thin. After that, take note that RCPS will rank higher than ordinary shares and has redemption premium. Not sure how much is left as dividend for ordinary shareholders.

Which questions that I already know the answer? I asked for your comments and I can't read your mind. By the way, I thought you have left this forum and even deleted all your previous posts. What you said was correct, there is no need to delete them. A good reference to all future investors.

An EGM should be coming soon to approve the right issue. Take that opportunity to ask more questions. There should also be an advisor for minority shareholders.

I am thinking of getting share margin financing to invest into this reit instead of real property investment. What is the advisable financing margin? Although can approve up to 75%, I doubt I should push to the max.

I have said positive things as well. Go check back my posts. Whether you see it positively and negatively, my posts are all in the form of reminder, questions for further consideration and ways to analyse this company. Why you should be upset? Do you honestly think my comments here will affect the share price?

By the way, the merger did not proceed and the price should recover to 90 sen. Any comment on that?

The first quarter result will be out soon. Can expect some improvement with so many rigs utilised but if this still fail to lift up the share price, something is very wrong here.

You should not ask me. You should ask each director and senior management how many shares they are still holding during the AGM and whether they will subscribe the right share or not since they know this business better than us. That will give you the hint on the future of this company.

You all should go to the AGM. The President kept saying that the rates will continue to be depressing, despite full utilisation. They also gave a non-committal answer if there will be further impairment despite all rigs will have contract. And they hope minority will continue to support them.

I wonder how long have they been in negative cash flow.

http://www.theedgemarkets.com/article/umwog-expects-turn-cashflow-positive-year

So with 100% utilisation can they show profit for FY17? Will this be the big headline in tomorrow's paper?

Take note:

1. Whatever contracts they have can always be suspended by their clients as and when they like. It happen in the past.

2. Even when rigs is expected to be fully utilised from July 17 onwards, the management can't answer if there will be further impairment or not for FY 2017.

It's all about how fast this company can generate profit and improve its value with the gearing of 0.5 after the whole exercise.

Thought the price will fly back to 90 sen since there is no merger. Nothing happen until now.

Very hard to imagine the dilutive effect. PNB will also hold rcps which is convertible to shares over 5 years.

The RI comes with free warrants. Do you need to take that into your share price calculation?

With gearing reduced to 0.5 after the whole exercise, this company looks attractive, only if oil does not go below USD40. Otherwise, no job and no profit.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5418849

Jeff, I never suggested anything apart from posing a few questions.

Battosai123, please read through the questions I posed earlier and as I have said, even if cut loss, at least sell it at a reasonable price. Are the 11 offers made by genuine drilling companies or scrap metal dealers? This sale will also look very bad on them if the Japanese manages to get a contract after the sale.

Jeff10, there is a difference between cut cost and cut loss. Even if cut loss, at least do it with favourable terms.

Andrew62, this downturn tells us there is more than enough oil. The price was high in the past because opec has been controlling the production. But they made a mistake by maintaining that high price for too long to an extent that shale producers have made progress and now, able to produce at a cost that can match offshore producers. Saudi is so cooperative now for production cut because of Aramco IPO. After that, it will be back to their old self.

There are still a few things not clear in their reply to Bursa on N1 sale. Firstly, that 11 offers received are offer to buy as a working rig or scrap metal? Secondly, whether the dry docking can be deferred if there is no contract? Thirdly, any cost comparison to cold stack the rig vs. selling at a loss? Fourthly, any chance to recover the spare cost from petronas since the contract is suspended by them as and when they like? Perhaps, shareholders should ask during agm. Anyway, their decision to sell reinforce my notion that the industry will not recover soon, otherwise, they would have waited it out for a better price.

Umw not suspended, only umwog. And umw will hold their egm today.

Although osv is kind of in an oversupply situation, it is a good addition to have orkim in the umwog group. Orkim, being in the downstream, has stable income and can supplement any shortfall during the downturn in the upstream, although margin is normally thin for stable income stream business. By the way, below was a big warning from petronas way back in year 2014 and after that, we all know what happen:

http://www.thestar.com.my/business/business-news/2014/03/05/shamsul-warns-of-declining-charter-rates/

Why you say PNB CEO choose them? Based on the edge, it was reported this is not pnb-driven. Umwog only provides the drilling services on the oilfield. How the oil that comes out is to be transported will be decided by the oil company but I doubt the osv owned by icon is big enough to transport the oil to the refinery. Orkim vessels are used to transport petroleum products like petrol or diesel which is a downstream activity.

This company AGM worth going or not? Got door gift or voucher in the past?

Hmm... rowie has deleted all his posts wor. Made me look like I was talking to myself.

That statement that they need 50%-60% rigs working to show profit was probably made some time ago and things have changed a lot since then. There is no rig oversupply here but the worldwide rig oversupply will still drag the day rate and they will still need to match that day rate when contracting with Petronas. Your investment strategy seems to suggest you know that this merger will fail.

As I said previously, Petronas don't have work for all their rigs. I believe they are in thin margin now. One or two idling rigs are enough to wipe out whatever profit they can get from working rigs. As I have also said, this share is short term buy long term sell. Look back my previous posts. If you are holding this share hoping it will one day fly back to RM2.80 or even RM4.40, unlikely to happen. Even if oil price reach USD80, it will take some time for the day rate to climb due to rig over supply. It will also definitely take some time for this company to get back to positive retained earnings.

The rig is not scrap metal. It is a working rig. If no job can sell off the rig, are they going to sell Naga 3 and 4 as well since it has no job now?

Rowie, whatever I know I have already posted. If the meeting really did happen, they still need to go back to Ekuinas for negotiation. Till then, nothing to announce.

Cikam, Naga 1 is an old rig made in the 60s. Even then, the disposal price is very low because no matter how old that rig is, it is a working rig. Furthermore, the rig has gone to Japan to do some upgrade 5 years ago. Are they so desperate for money that they have to sell rig at such deep discount?

If valuation is too high, then have to negotiate with Ekuinas to reduce the price. Don't think there is anything to announce at the moment until there is an outcome with Ekuinas on revised pricing.

PROPOSED DISPOSAL OF FIFTY PERCENT (50%) OWNERSHIP OF NAGA 1 BY UMW DRILLING CO. LTD TO JDC PANAMA, INC.

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5413977

Petronas is a lot more smarter and won't touch this business. They don't need the rig all the time and it's a cyclical industry. Why get stuck with something you don't often use but depreciate everyday and need to dry dock every 5 years, even if you don't use the rig for the entire 5 years. In fact, I don't recall any oil companies that actually own rigs. They rather sub this drilling job out to 3rd party so that there is someone to blame in case of an accident.

Funding will come? Don't know how long this company can last. I am sure asset disposal is one of the many options they are considering. If they are really selling the rigs, you can forget the share price to fly cause this will realise the impairment made and instead of reversal of impairment when the industry bounce back later.

Don't forget, demerger still likely to happen. Not sure how that will affect the share price.

My bet is merger off, demerger on. There should be some announcement end of today.

Short term wise, can buy as quarterly result should be quite positive after some big impairment and potential new contracts. Long term wise, I still expect further impairment in Q4 17 and concern on its ability to break even with the current day rate and whatever interest they are paying to the bank.

Jeff must be an insider, even know when is the board meeting.

I have a feeling this whole thing did not go through PNB. The UMW CEO already admitted in the Edge that this whole thing is not PNB-driven. Why are so many people still think this is a done deal between PNB and Ekuinas? Anyway, SPA is actually signed subject to CPs being met. The only way out is both parties walk away. I am sure either side or both sides is trying to frustrate the whole proposal.

PNB is another investment company just like EPF. They don't interfere in the management. Their presence probably will provide better bargaining terms when dealing with clients or bankers. But they don't print money and is still responsible to their trust fund unit holders on investment returns.

Not worth taking it private unless the share price is deeply in discount to NBV. I still think the rigs are overvalued after the impairment. You may ask how the mgmt calculate their impairment during agm. Some companies use valuation method and some use DCF method. If they use DCF method, they can put in a lot of assumptions to justify the impaired value to their auditor. It's very subjective and judgemental.

Still have concern if demerger to proceed as UMWOG will no longer be part of UMW group. May not fly back to pre-annoucement price.