SKPETRO (5218) : Upbeat on SapuraKencana
KUALA LUMPUR: CIMB Equities Research remains upbeat on SapuraKencana Petroleum after it cemented its exploration and production (E&P) presence by scooping up six blocks.
It said on Friday the four blocks in Vietnam would be purchased from Petronas for US$400mil.
Another two blocks in Sabah were awarded by Petronas to a consortium that consists of SapuraKencana, Petronas Carigali and M3nergy after a competitive bidding exercise.
“Building a portfolio of upstream assets that will provide sustainable growth is a natural progression for SapuraKencana following the US$896m acquisition of Newfield's Malaysian assets in February 2014,” it said.
CIMB Research said unlike Newfield's eight oil fields and three (out of four) Vietnam blocks that are already producing, the two Sabah blocks are new ones, underlining Petronas's stamp of approval on SapuraKencana's E&P capabilities.
The Vietnam acquisitions are slated for completion by mid-FY16 and will be funded by the multi-currency financing facility that forms part of the RM16.5bil debt that was restructured earlier this year.
“The three producing blocks could contribute US$40mil in net profit annually, potentially boosting our EPS forecasts by 3% in FY15 and 6% in FY16.
“Meanwhile, the Sabah blocks will first undergo exploration works before producing first oil or gas.
“We advise investors to accumulate the stock as SapuraKencana offers a solid order book of RM26.8bil (as at August 2014) and earnings visibility, supported by its E&P ventures, two long-term contracts in Brazil, as well as various multiple-year offshore construction and drilling contracts,” said CIMB Research.
http://www.thestar.com.my
KUALA LUMPUR: CIMB Equities Research remains upbeat on SapuraKencana Petroleum after it cemented its exploration and production (E&P) presence by scooping up six blocks.
It said on Friday the four blocks in Vietnam would be purchased from Petronas for US$400mil.
Another two blocks in Sabah were awarded by Petronas to a consortium that consists of SapuraKencana, Petronas Carigali and M3nergy after a competitive bidding exercise.
“Building a portfolio of upstream assets that will provide sustainable growth is a natural progression for SapuraKencana following the US$896m acquisition of Newfield's Malaysian assets in February 2014,” it said.
CIMB Research said unlike Newfield's eight oil fields and three (out of four) Vietnam blocks that are already producing, the two Sabah blocks are new ones, underlining Petronas's stamp of approval on SapuraKencana's E&P capabilities.
The Vietnam acquisitions are slated for completion by mid-FY16 and will be funded by the multi-currency financing facility that forms part of the RM16.5bil debt that was restructured earlier this year.
“The three producing blocks could contribute US$40mil in net profit annually, potentially boosting our EPS forecasts by 3% in FY15 and 6% in FY16.
“Meanwhile, the Sabah blocks will first undergo exploration works before producing first oil or gas.
“We advise investors to accumulate the stock as SapuraKencana offers a solid order book of RM26.8bil (as at August 2014) and earnings visibility, supported by its E&P ventures, two long-term contracts in Brazil, as well as various multiple-year offshore construction and drilling contracts,” said CIMB Research.
http://www.thestar.com.my
