ARMADA (5210) BUMI ARMADA BHD - BAB's largest FPSO starts work ahead of schedule
Bumi Armada’s (BAB) largest
Floating, Production, Storage and Offering (FPSO) vessel, Armada
Olombendo, has started production at the Cabaca South East field, 5
months ahead of schedule. This vessel is chartered to Eni under a
US$3bn, 12-year firm charter with 8 annual extension options worth
US$0.9bn.
Based on a press release from Eni’s official website, they can generate up to 80,000 barrels of oil per day via BAB’s vessel, and compress up to 3.4 million cubic meters of gas per day.
Production is taking place through BAB's Armada Olombendo FPSO vessel, which can generate up to 80,000 barrels of oil per day and compress up to 3.4 million cubic meters of gas per day.
The early output is estimated at 38,000 barrels per day, according to Angola state oil company Sonangol, reported Reuters.
MQ Research are positive on the update:
Maintain Outperform. MQ Research expects the commissioning of three new FPSOs in 1Q-2Q17 (including Armada Olombendo) to likely lift 17-18E FCF/EV to 9%-10%, thereby re-rating the share price.
ARMADA (5210) BUMI ARMADA BHD - BAB's largest FPSO starts work ahead of schedule
Based on a press release from Eni’s official website, they can generate up to 80,000 barrels of oil per day via BAB’s vessel, and compress up to 3.4 million cubic meters of gas per day.
Event
Eni SpA announced last week that the group has started production of the East Hub Development Project, in Block 15/06 of the Angolan deep offshore, ahead of development plan estimates.Production is taking place through BAB's Armada Olombendo FPSO vessel, which can generate up to 80,000 barrels of oil per day and compress up to 3.4 million cubic meters of gas per day.
The early output is estimated at 38,000 barrels per day, according to Angola state oil company Sonangol, reported Reuters.
Impact
To recap, Armada Olombendo is BAB's largest FPSO, chartered to Eni under a US$3bn, 12-year firm charter with 8 annual extension options worth US$0.9bn.MQ Research are positive on the update:
- the production came in ahead of their expectations of end-Mar17; and
- with an estimated daily charter rate of US$685,000 / day, Armada Olombendo contributes up to 25%-30% of BAB's 17-18E revenue forecasts.
Action and recommendation
No change to MQ Research’s EPS and TP forecast.Maintain Outperform. MQ Research expects the commissioning of three new FPSOs in 1Q-2Q17 (including Armada Olombendo) to likely lift 17-18E FCF/EV to 9%-10%, thereby re-rating the share price.
Source: Macquarie Research - 15 Feb 2017
ARMADA (5210) BUMI ARMADA BHD - BAB's largest FPSO starts work ahead of schedule
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