KUALA LUMPUR: Affin Hwang Capital expects a strong second half of 2022 (2H22) profit turnaround for Velesto Energy Bhd on the back of a higher capacity utilisation. The research house said the drilling market outlook had turned more favourable compared to a quarter ago with demand and charter rates on the rise.
Barring any unforeseen disruptions, it said Velesto should end 2022 with a full-year 59 per cent utilisation. "Management is also sticking to its bullish tone as it expects utilisation to rise close to 80 per cent in 2023 from our existing 65 per cent assumption.
"Velesto has locked in roughly 18 per cent utilisation so far, with most of the potential contracts still under negotiation under Petronas' umbrella package," it said. Meanwhile, the firm said the estimated higher 72 per cent rig utilisation in 2H22, above Velesto's 60 per cent breakeven level should lead to a strong profit turnaround and narrow 2022 losses significantly.
It said 2023 was shaping up to be a strong recovery year driven by a recovery in both rig demand and charter rates. "We reaffirm our Buy rating and target price of 11 sen on Velesto. "We believe market expectation on Velesto has bottomed and downside on its share price appears limited. "We see value emerging and believe that the current share price has not factored in the improving drilling market outlook," it added.
US stocks might test the bottom again for the 2nd time. Expect the feds to raise interest rate until end of next year . Inflation will take longer to be tame until next year. ECB (european bank) rates will rise from 0.5% to 1.8% end 2023. Good news is Asia will do slightly better but we cannot decouple from the situation of high interest rate. BNM will continue to raise 0.25 % min every 3 months until end of next year. I think utilities and OnG will still be the choice for lowering risk investment in coming year and start preparing for this inevitable economic cycle.
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FINALLY! Seems like Bumi Armada is on the cusp of securing a contract win! This will be a EPC contract, so 2-3 years just designing, engineering and constructing the FPSO, before handing it back to TotalEnergies.
Front runner emerges to supply FPSO for TotalEnergies offshore Angola
TotalEnergies has chosen its preferred contractor to provide a floating production, storage and offloading vessel for the Cameia-Golfinho project offshore Angola, which will be the first development in the Kwanza basin.
The French supermajor’s decision came just weeks after Eni and BP — which subsequently joined forces in Angola to form the Azule Energy joint venture — chose Yinson to supply FPSOs for the Agogo and Palas- Astrea-Juno (PAJ) projects, marking a much-needed resurgence in upstream activity in the country after years of falling investments.
Between them, the Cameia-Golfinho, Agogo and PAJ developments could boost Angolan production by more than 300,000 barrels per day — welcome news for a nation that in July became Sub-Saharan Africa’s biggest oil producer, surpassing Nigeria and averaging 1.177 million bpd.
Contracting sources in Asia and Europe told Upstream that Malaysian offshore contractor Bumi Armada is leading the race to land the deal for provision of an FPSO with production capacity of 100,000 bpd.
Bumi completed the front-end engineering and design work for the floater late last year and its commercial proposal is very competitive, sources said.
Some project watchers suggested TotalEnergies signed a letter of intent with the Kuala Lumpur-based FPSO player early this week, but this could not be confirmed.
“The LoI was scheduled for signing Monday, though it is not sure the signing ceremony took place,” said one source.
Another contact familiar with the tender process said: “I know they (Bumi) are leading and going ahead.”
Kuala Lumpur sources claimed Bumi has a conditional letter of award for Cameia FPSO.
Upstream understands there are expected to be several months of pre-engineering work on the FPSO before a formal award is made by February 2023.
The contract up for grabs is said cover engineering, procurement and construction, with TotalEnergies owning the vessel after delivery.
Saipem working with MISC was said to be other remaining bidder in the race, with the Malaysian rumour-mill suggesting MISC had high hopes for this job — especially with Saipem on board.
Also jostling for the prestigious job have been Technip Energies of France working with Malaysia’s Yinson.
Upstream understands the Technip Energies-Yinson group may have withdrawn from the bid process due to commitments elsewhere, not least on the two other Angolan schemes.
I wrote about it 2 weeks ago... articles were behind paywall, but related to this project. In my opinion, may be a better option that the other Angola projects. And rates are increasing as competitors withdraw....
Posted by Robert Waters > 2 weeks ago | Report Abuse
Nobody interested in the project behind the paywall ? I think that is the one... Potential Cameia FPSO project win, but may entail rights issue BAB is bidding for TotalEnergies’ Cameia FPSO project in Angola. If BAB wins the c.US$1.8bn capex project in 2H22F, BAB may need to fork out equity of c.US$90m and undertake a c.RM500m rights issue, in our estimate, assuming that 1) BAB takes a 50% stake in the project; ... etc.
Two weeks ago there was an article behind the paywall that Bumi Armada was about to get the Cameia project. I would pop up when doing cameia search on google ... I deleted 1st post about it only 'free' part of article could be copied.
Thank you for the relevant report again. So important to get this project at good rate.
Will need to see some analyst updates next week on the potential impact of the new project on Bumi Armada's valuation. I'm estimating that SOP wise it would add roughly 10-15 sen to the share valuation, maybe slightly biased to the upside.
We also need news of the 98/2 FPSO (aka Armada Sterling V) sailaway, because for now, most SOP-based valuations have inputted a conservative valuation for the project owing to potential delays and start-up issues.
And of course, the sooner we hear about the sale of Armada Claire, the better.
What we do know is that the drilling is commencing for 2 new wells at the TGT field in Vietnam, and the FPSO charter is likely to be extended beyond Dec 2024. Looking at an additional 5 years there.
Currently Armada TGT FPSO is contracted until Dec 2024. The license expiry for the TGT Field was also supposed to be in Dec 2024.
However, in 2020, the field operators submitted a Full Field Development Plan (FFDP) to drill a further 6 wells (4 in 2021, 2 in 2022) and requested for a 5 year extension to the license. 2 year license extension was initially granted, so the field is operational until Dec 2026. But the operators have now submitted a further 5 year license extension request, up till 2031. The field is producing well, and the operator is minting money.
So a 2 years FPSO extension to 2026 is pretty much guaranteed, but it might likely remain contracted up until 2031. The FPSO will unlikely serve beyond that as it has a maximum design life of 20 years (started operating in 2011).
OPEC+ heavyweights Saudi Arabia and Russia, with their +11 million bpd quotas, are looking at $100 oil as a fair price good for all, anonymous Reuters sources familiar with both Russian and Saudi Arabian government thinking said.
Russia and Saudi Arabia, who together make up more than half of OPEC+'s total quota, are widely considered the leaders of the OPEC+ group, and a $100 preference could lead to an active defense of this desired floor price.
OPEC has long decried the accusation that it targets specific oil prices—rather, as OPEC says, it looks to keep the oil market in balance. However, oil prices still have a role to play in maintaining that balance.
The OPEC+ officials, who wish to remain anonymous, said that OPEC+ has sent out signals that it prefers a price around $90 or $100 per Brent barrel—higher, as Reuters points out, than some in the industry had previously thought.
In the August OPEC+ meeting, when oil prices were near $100 but falling, OPEC+ took action—albeit minor action—to defend this price by cutting 100,000 bpd off its production quota. It wasn't enough to keep Brent prices near $100, but perhaps it has helped to keep Brent prices above $90 for the most part, as it fights against recession fears that seek to spook the market into believing crude oil demand could slump amid tough economic times.
As to why OPEC+ seems to have raised its desired floor price, one of Reuters Saudi sources indicated that materials costs have risen with inflation and that crude producers need more revenue to make up for higher production costs.
"An oil price at $120-130 is risky and Saudi will prevent that, but at $100 it won't have a huge impact on the global economy - Saudi would be comfortable with that price," one of the anonymous sources said.
As for Russia, which has had to offer its oil at discounts for months, it wants to see oil at no less than $100 per barrel, two Reuters sources familiar with Russian thinking said.
With both Saudi Arabia and Russia backing the $100 oil horse, it could only be a matter of time before OPEC+ agrees to actively defend this price level by cutting production.
Over the past three months, CGS-CIMB has upgraded 12 stocks, higher than the three upgrades in the quarter before, Ng said in the 2Q2022 earnings wrap report, mainly because of more attractive valuations, following recent share price retracements or improved earnings prospects.
Stocks that were upgraded to “add” included Affin Bank Bhd, Bumi Armada Bhd, DKSH Holdings (Malaysia) Bhd, Duopharma Biotech Bhd, Eco World Development Group Bhd, Hap Seng Plantation Bhd, KPJ Healthcare Bhd, Maxis Bhd, Power Root Bhd and Velesto Holdings Bhd.
But the research house also downgraded more stocks over the past three months — 15 in total — compared with 11 in the previous results review.
The key downgrades to “reduce” are Hartalega, Lotte Chemical Titan and Panasonic Manufacturing Malaysia Bhd. Stocks that were downgraded to “hold” from “add” include Farm Fresh Bhd, Kossan Rubber Industries Bhd, Malaysia Pacific Industries Bhd and Malayan Cement Bhd.
Bumi Armada's share price will still be stuck in the doldrums, as we need some official announcement before price can consolidate higher.
Things to expect: 1) Sailaway of Armada Sterling V (expected by Oct 2022) 2) Sale of Armada Claire (expected by Dec 2022) 3) Signing Mumbai FSRU binding contract (expected by Mar 2023) 4) Signing Cameia FPSO binding contract (expected by Mar 2023)
The above are not without risks. Armada Claire may be scrapped rather than sold, while no agreement might be reached for the Mumbai FSRU. They have been discussing since May 2021 with no outcome, so that might lead nowhere.
The big hope now is the sail away of Armada Sterling V, which according to various sources should not see any further delays, as well as the signing of a binding contract with TotalEnergies for the Cameia FPSO which should be done by Q1 2023 (though an LOI might be signed before the LOA).
Aside from the above, continued debt pare down, sale of the remaining 3 OSVs, and additional work in the Caspian Sea would help greatly in share price recovery. As a bonus, an additional contract win or two in the coming months that is not yet known about (either fully-owned or as a JV).
Niki, I searched on google photographs of BA, found some in the Shipyard on their site, It was a comment with a photo. Could not attach a link as it was blocking me for some reason. There was no doubt about authenticity as they had many, though photo and commment may have been posted with a delay.
Tommorrow once the Donbast referendum being passed, then Russia will annexed those 4 Donbast regions from Ukraine, then will start war between Russia and Europe, then oil price will spike up to above USD $120 again !
Then all the O & G counters will spike up to sky high especially Armada's price will break above 60 cents !
Robert this is your source: https ://oilandgas. world/viewtopic.php?t=96
VMEAP was awarded a contract from SPOG for 5 Modules:
M40 Produced Water Treatment Module (in production) M51 Seawater treatment Modules (Shipped May 17, 2022) M53 Chemical Injection Module (in production) M54 Hydrocarbon Dewpoint and Gas Dehydration Modules (Shipped May 31, 2022) M90 Metering Laydown Module (in production)
Note: UNKNOWN THE ABOVE STATUS AS OF WHAT DATE
From LinkedIn: www[dot]linkedin[dot]com/posts/denis-brouwer-5303417_greentip-vme-tathong-activity-6940574032933064706-YU01/
Two years of hard work and the last module has been completed, loaded-out, sailed to Singapore and installed onto the FPSO. Congratulations to VME Process Asia Pacific Pte Ltd with this milestone, under the difficult circumstances during the last years. Thank you to all involved in this challenging project !
Based on further research, the above list is pure nonsense. M53 loadout was completed in October 2021, while M40 loadout was completed in February 2022. I can't find the date for M90 loadout. M54 was the final module to be loaded out in May 2022. So all have been loaded out.
Kramatorsk, Ukraine(CNN) The chaos of the past week might be incorrectly comforting. Despite Russia's continued disastrous handling of its war of choice in Ukraine, the conflict's most dangerous moment may be nearing. At some point this week, the Kremlin will likely declare that "sham" referendums in four partially occupied areas of Ukraine have delivered a mandate for their swift assimilation into what Moscow calls Russian territory…
Latest news from CNN… A war between Russia & USA/Europe will be ignited anytime from now if the ‘Sham’ referendum results is in favour to russia (of course is a sure guranteed passed results created by Russia), So, since russia will use this results by annexed 4 Ukraine’s regions and as an excuse for them to publicly giving mandate to them to sending millions of troops to based the stations permanently into this 4 regions, then a new World War III cannot be avoid and will happened anytime from now already !
Then the Oil price definitely will immediately shooting up to sky high !
And then all the O & G counters definitely will follow to spike up like mad already !
Hi hi, @ marketbull1628 - The time of last forum with you 3 weeks ago, the price was about 0.400, even though during the period the price had touched 0.440 now is only 0.370 which was the price i had entered and exited already. In my opinions, stock with RSS is more risky as in bad time, investors would throw more than when the share price had risen. That is why i would try to avoid RSS stock which small investors would be bullied by them. Furthermore, normally they have insiders information or go along with operators of the stock. Like Topglove, RSS would come in when JP Morgan had lowered the price target (downward) and worse still E.P.F was selling the stock. Do you think there is such coincidences ???
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