Posted by Robert Waters > 2024-02-29 11:54 | Report Abuse

Zonefinder, explanation is from Raymond Yapp. The O&G Analyst #1 from Singapore (before Malaysia). Grateful for Raymond to include and Mkt888 to provide link.
The analysis from superficial bankers can be skipped.

Posted by zonefinder > 2024-02-29 12:12 | Report Abuse

Thanks Robert, I realized it after I read Raymond's analysis. Thought Gabriel was an insider..haha..

Posted by OrlandoOilWeb3AI > 2024-02-29 12:14 | Report Abuse

IB consensus impairment doesn't matter

Then why do it? Why do the impairment?

Posted by rohank71 > 2024-02-29 12:14 | Report Abuse

my bad I was overly Conservative... wanted to buy closer to my last buying price at 48 and 49...anyway congrats to all those who bought and took the bear by its b*lls. let's see it break 63 soon.

Posted by nikicheong > 2024-02-29 12:19 | Report Abuse

From RHB's report: Bumi Armada entered into a non-binding agreement to engineer a carbon capture injection
system for a gas field in Indonesia.

Posted by zonefinder > 2024-02-29 13:04 | Report Abuse

Orlando, blame it on the accountants. To provide a true and fair view which sometimes screws perception in the market.

Posted by Gabriel Khoo > 2024-02-29 13:51 | Report Abuse

Nick how do you interpret the last sentense of this from RHB
e sizeable impairment on Armada Kraken caught us by surprise, and management explained that it was mainly due to the value-in-use (VIU) of this vessel falling significantly below its net book value (NBV) approaching the end of firm period (Mar 205), coupled with a hike in the discount rate in arriving at the VIU. It was highlighted that there has been no change to contracted cash flows and the recent transformer failure did not affect the VIU. BAB is currently in talks with the client on the potential extension and the renewal rate could be 50-70% lower than its firm contract. T

Posted by OrlandoOilWeb3AI > 2024-02-29 14:11 | Report Abuse

Impairment is done using future cash flow

This impairment review requested by the banks for refinancing facilities?

Posted by OrlandoOilWeb3AI > 2024-02-29 14:12 | Report Abuse

The only way impairment doesn't matter is because carrying value is the one which is wrong

Posted by nikicheong > 2024-02-29 14:13 | Report Abuse

Gabriel, the least rate will drop by nearly 70%, that much is certain.

1. Per Enquest's last operational update: "The Group also expects unit margins to improve as the Kraken FPSO lease rate reduces by c. 70% from 1 April 2025, while the culmination of major projects at SVT will crystallise significant operating cost reductions and emission reductions in 2026 and beyond."

2. Basic calculation from the contract values:

Firm: USD1,400mil for 8yrs = USD175.00mil/annum
Option: USD924mil for 17yrs = USD54.35mil/annum

54.35/175 = 31.1% (i.e. reduction of 68.9% which matches Enquest's statement)

Posted by OrlandoOilWeb3AI > 2024-02-29 14:14 | Report Abuse

Give the management the benefit of doubt that there is no element of BS

Then it is lousy management

Posted by OrlandoOilWeb3AI > 2024-02-29 14:16 | Report Abuse

If carry value is wrong means depreciation is wrong

If depreciation wrong means the previous QR profits overstated

Posted by OrlandoOilWeb3AI > 2024-02-29 14:17 | Report Abuse

This impairment if 30m 50m is ok... but the amount is so big

Missed the elephant in the room?

Posted by OrlandoOilWeb3AI > 2024-02-29 14:19 | Report Abuse

Hope the IBs back up their Doesn't Matter by asking their customers to buy

Posted by EatCoconutCanWin > 2024-02-29 14:43 | Report Abuse

this counter loss money, who is the idio push up ...

Posted by Rwan88 > 2024-02-29 15:02 | Report Abuse

Trap maybe

Posted by ITreeinvestor > 2024-02-29 15:47 | Report Abuse

On a positive note, its Armada Sterling V 98/2 has achieved first oil in January 2024 and is looking forward to achieving first gas by April 2024

Posted by marlboroman2 > 2024-02-29 16:05 | Report Abuse

As long as there is no impairment on Brent Oil price at USD 80 per barrel, BA should theoretically head on to 80 sens TP.

Posted by Robert Waters > 2024-02-29 16:32 | Report Abuse

There is certain truth to it that the public should know when net book value of the asset exceeds current value in use due to the higher interest rates. This discounting of Future Payments at 8.5% result in lower valuation. The interest rates changed, hence the disclosure. Nothing to do with option charter - it was known for years.

However, Greedy Gary made a spectacle out of it. He could have kept it in asset valuation rather than allowing to crash earnings. But that is Greedy Gary, he has only one concern, his free shares. Price fluctuation do not concern him.

Posted by Robert Waters > 2024-02-29 16:37 | Report Abuse

My thanks to marlboro man. Let us make things simple. Those depreciation models give investors headache. Me inclucing.
To RM0.80 target price based on our internal, i3 forum projection.

Posted by marlboroman2 > 2024-02-29 16:46 | Report Abuse

Yes, Robert, life is suppose to be simple, and that triangle drawing (VIU vs NBV) with yellow shades confuses my simple mind i.e. can't make any sense of it. Anyway, cash is king and BA's cash flows looks solid so we continue to wait and see

Posted by proudbeggar > 2024-02-29 18:59 | Report Abuse

Just like that, it was announced a half billion (RM 514.4m) write off or write down in the value of Kraken & SC assets, apparently due to " caused by accounting depreciation recognised
on a straight-line basis and the reduction in the charter revenue during the optional
extension period" which was already known from the beginning and therefore should have been provided for. This half a bln bucks 514m writeoff is more than half the pre-adjusted 4 quarters profit of 883 ( +386 4qtr 497 b/f 3qtr). Not a very plausible answer.

Posted by proudbeggar > 2024-02-29 19:09 | Report Abuse

And it will go into the official BAB 2023 Annual Report. "What kinda depreciation accounting is this " should be asked by the external Auditors.

Posted by Felix888999 > 2024-02-29 19:10 | Report Abuse

Out of sudden the BA accountant realized the straight line depreciation method is wrong after running that FPSO for 8 donkey years. All of their FPSOs could have the same problem.

Mana sekolah this accountant? Accountant from ah beng workshop?

Posted by nikicheong > 2024-02-29 19:15 | Report Abuse

Shoplot accountants the lot of them.

Need to ask their CFO who pronounces millions as "minions"

Posted by Felix888999 > 2024-02-29 19:21 | Report Abuse

Ba-ba-ba-ba-ba-na-na
Ba-ba-ba-ba-ba-na-na
Banana-ah-ah
Potato-na-ah-ah
Banana-ah-ah

Adui Potato and Banana accountants we have in BA.

Posted by nikicheong > 4 minutes ago | Report Abuse

Shoplot accountants the lot of them.

Need to ask their CFO who pronounces millions as "minions"

Posted by Robert Waters > 2024-02-29 19:47 | Report Abuse

This devaluation of vessel applies to every bond. When interest rate changes, bond can lose half of its value.
That is why they declare them 'held to maturity' and do not mess with the bond market value at the moment of given interest rate.

That is what BAB should be doing. Avoid scaring investors. Stick to project linear data model.
You would only change it if you want to sell the vessel (or bond), or get financing for it.

Posted by nikicheong > 2024-03-01 17:16 | Report Abuse

https://cdn.qr-code-generator.com/account32835038/44091251_1.pdf?Expires=1709370957&Signature=C9wTXL3GiCO9f-UwZR-5f79ik0NY279iL~C8gRWDuyW5FFJ0yYjbCTFIFwEvFigL3atZNjIzsI6yMpTqjPMhGTyftNCidbbHQoNvAraA5640lYKJ1xn1ZPAp43Br6KocbPlBJT2PFjO5JTsoXe2-NG78UvPvQAfLDUifEVnfNIELk8KVLffwWnGBmaPfP~OJGr1w0YadepSMZwA6qT8kse7ch9O-fpL3XRUhEh8OJFsnrwCictCsOm4s--5ziHyErhVPYmY0IPJGc23KI82fQ7uiDAlFQt3rBZreqetNbzjqo-1R1MWaA1c1me1eiseNkKHHsnNo38SdAmPTM-QQZg__&Key-Pair-Id=KKMPOJU8AYATR

Posted by Felix888999 > 2024-03-01 18:01 | Report Abuse

Buckle your sitbelt for another dumping if Armada Sterling V not able to get the final acceptance. The FPSO still not running at full capacity because of client`s wells readiness. You know typical client behavior, Taichi it to the vendor first. 😂😂😂


This company don't know no luck or management problem.

Posted by ITreeinvestor > 1 day ago | Report Abuse

On a positive note, its Armada Sterling V 98/2 has achieved first oil in January 2024 and is looking forward to achieving first gas by April 2024

Posted by nikicheong > 2024-03-01 20:34 | Report Abuse

Some bad news. According to my sources, Armada V Sterling is not going to attempt the final acceptance test anytime soon. There are still a lot of things pending.

For starters, the gas train has yet to be commissioned.

Final acceptance preparations will only begin after that.

They only said that acceptance will happen this year, maybe even towards the end of the year only.

Posted by nikicheong > 2024-03-01 20:51 | Report Abuse

Some of the analysts were quite optimistic that acceptance will happen in April 2024, zero chance of that. Earliest looks to be Q3 2024 if all goes to plan.

Posted by rohank71 > 2024-03-01 21:49 | Report Abuse

as I have repeatedly say ASV is just an associate. the Q4 numbers is without ASV...yet BA achieved highest operating profit. ASV is just a small number to BA. let's not bark on the wrong tree.. if BA can produce same Q4 results (ex impairment obviously)...in Q1 surely we r at 65sen band .. ASV is just a branding purpose.

Posted by Felix888999 > 2024-03-01 21:56 | Report Abuse

Yes in theory the contribution of ASV is small but this is the only new project that Armada is working on since the Kraken. If this one hit final acceptance issue again, the market sentiment will be impacted. Also could impact Armada`s reputation in this FPSO market.

Posted by rohank71 > 2024-03-01 22:29 | Report Abuse

who controls ASV... not BA but their Indian partner... how to control when U own 30%... this ASV is not important to BA... even the debt is already a project debt ie no recourse to BA and not consolidated. let's hope for new projects for BA where it controls.

Posted by Felix888999 > 2024-03-01 22:37 | Report Abuse

In term of shareholding BA is the not the controlling shareholder but BA is in charge of the technical, engineering of this project. When Final Acceptance failed, BA is the one taking the bullet. The ship herself has Armada`s name.

Posted by Robert Waters > 2024-03-02 00:26 | Report Abuse

This company NEVER fails to disappoint.
Sometimes I think they cannot do more of this failing as it has been already overplayed. They should have learned.
Like Kraken operational problems returning back to life after few years of operation.
Or impairments.
But here it comes, another delay with new FPSO Story.
Seems any problem I think of comes to life.
It is like a movie where the hero turn out to be a villan, causing all havoc.
Maybe Greedy Gary is that villan ... ?
And what is the new dejavu ?
My bet is legal case against a client again ...

Posted by Gabriel Khoo > 2024-03-02 08:05 | Report Abuse

https://www.upstreamonline.com/rigs-and-vessels/major-fpso-company-says-not-enough-competitors-for-big-high-cost-projects/2-1-1606125

Posted by vespa > 2024-03-02 15:07 | Report Abuse

Armada can’t get out of its own way.

Posted by Gabriel Khoo > 2024-03-02 21:54 | Report Abuse

https://www.linkedin.com/posts/oilandnaturalgascorporation_ongc-energynowandnext-energysecurity-activity-7169660663672295425-sHID?utm_source=share&utm_medium=member_android

Posted by nikicheong > 2024-03-03 00:54 | Report Abuse

https://www.linkedin.com/posts/shapoorji-pallonji-energy_fpso-armada-sterling-v-offshore-andhra-pradesh-activity-7169684891373191168-HMj7?utm_source=share&utm_medium=member_android

Posted by nikicheong > 2024-03-03 00:55 | Report Abuse

Officially India and Shapoorji doesn't seem to acknowledge Bumi Armada as a partner and no mention of Bumi Armada's contribution to the success of the project.

Posted by rohank71 > 2024-03-03 08:53 | Report Abuse

#niki, with this can we confirm the "first oil offtake" from ASV done?. the risk of non delivery by ASV is over?

Posted by Gabriel Khoo > 2024-03-03 09:50 | Report Abuse

Got ah. Thanks stakeholder in the previous post

Posted by ITreeinvestor > 2024-03-03 10:45 | Report Abuse

Armada Sterling V achieve significant milestone of first off take on 27th feb 2024 and the offtake tanker flagged off on 2 mar 2024

Posted by rohank71 > 2024-03-03 12:58 | Report Abuse

Great news. even though financially this doesn't impact BA much but improves its credibility. Hope to see improvement in market values.

Posted by Gabriel Khoo > 2024-03-03 15:38 | Report Abuse

Yes. Rohank

Posted by nikicheong > 2024-03-04 11:24 | Report Abuse

Leading Asian joint venture eyes stake sale for huge FPSO

KAS III vessel owned by Indonedsia's PT Armada Gema Nusantara, a joint venture of compatriot PT CakraPrima Satya and Malaysia’s Bumi Armada

A leading Asian joint venture is in advanced discussions with Indonesian state-owned player Pertamina to sell its stake in a sizeable floating production, storage, and offloading vessel currently deployed at the Madura BD gas field, operated by Husky-CNOOC Madura Ltd (HCML) offshore Indonesia.

The move underscores the financial constraints faced by contractors operating traditional oil and gas facilities who now find it increasingly challenging to secure funding for new projects.

https://www.upstreamonline.com/rigs-and-vessels/leading-asian-joint-venture-eyes-stake-sale-for-huge-fpso/2-1-1606178

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

Interesting stuff, if it can fetch a good valuation, I'm all for this. It might also tie-up with the upcoming Madura FLANG where Pertamina will be partnering with Bumi Armada based on the non-binding agreement signed in 2023.

Posted by nikicheong > 2024-03-04 12:06 | Report Abuse

Maybe this is one of the things Gary meant when he alluded to "creating shareholder value via corporate exercise" in the Q4 2023 results press release.

I believe the vessel can be sold for between USD350mil to USD400mil based on the remaining tenure of the contract and the value of the FPSO itself.

If we take USD350mil as the conservative estimate, Bumi Armada will be entitled to half the proceeds amounting to USD175mil, equivalent to around RM820mil.

Posted by Gabriel Khoo > 2024-03-04 12:15 | Report Abuse

How much would this fpso contribute to the profit and how this would tie with madura FLNG?

Posted by Gabriel Khoo > 2024-03-04 12:50 | Report Abuse

Look like madura FLNG will be finailized anytime this year.