GLOTEC (5220) : Globaltec O&G division likely to start well drilling in March
SUBANG JAYA: Globaltec Formation Bhd shareholders approved the group's proposed diversification into oil and gas (O&G) exploration and production (E&P) at an EGM yesterday, paving the way for its first well drilling in March next year.
Group executive chairman Datuk Seri T.C. Goh said the group, which has been losing money for the last two financial years, is confident that the new division will contribute "more than what they want".
"It is difficult to answer now (on how we will do). As you know, O&G, we are entering into exploration. We hope to start operations in March or after Chinese New Year. Other than exploration, we have another subsidiary, it is services, to secure more O&G contracts. We look to these two divisions to perform accordingly," he told reporters after its AGM and EGM yesterday.
He added that the recent drop in oil prices will not affect its new division as it is entering into gas segment with a focus on coalbed methane (CBM).
The price of Brent crude oil has fallen more than 40% since June this year.
Globatec Formation will have 55% control of NuEnergy Gas Ltd (NGY) by end of the year. The group currently has 19.9% stake in NGY, a company listed on the Australian Stock Exchange.
NGY is principally a gas and ancillary power generation development company with an immediate focus on establishing unconventional gas E&P in Indonesia.
Earlier in August, the group had subscribed a 60% equity interest each into New Century Energy Resources Ltd (NCE) and New Century Energy Services Ltd (NCES). NCE is in the O&G E&P business with primary focus on unconventional oil and gas while NCES is in the O&G services business.
Group finance director Chen Heng Mun said the group will see some improvement in its financial results next year but did not comment on how soon it expects to return to the black.
"We are still working very hard on the manufacturing side while waiting for contribution from O&G. The O&G sector will still go through exploration period and may not see immediate results. So certain milestones need to be achieved before we feel the first dollars and cents.
"Contribution from O&G won't be so fast...we cannot tell you exactly when but we have a programme (where we will evaluate our progress so far and decide on the) next milestone and how to achieve it," he said.
Goh said its manufacturing division will face challenges next year including foreign exchange, implementation of the goods and services tax, high fuel cost and high labour cost.
"When it comes to manufacturing, we are a supporting industry. When the front-end is not doing well, it will come down to us. We are always the first ones to be hit. We can see that it is coming, that's why we look for new division to venture into. Hopefully O&G can bring in better margin to the group," he said.
Goh said its existing divisions namely semiconductor, precision machining, stamping, automotive and oil palm plantation will continue and with the exception of semiconductor division, all its existing divisions are self-sustaining.
He added that the group is open to diversify further if there are good opportunities to invest, so that it is not dependent on only one industry.
http://www.thesundaily.my
SUBANG JAYA: Globaltec Formation Bhd shareholders approved the group's proposed diversification into oil and gas (O&G) exploration and production (E&P) at an EGM yesterday, paving the way for its first well drilling in March next year.
Group executive chairman Datuk Seri T.C. Goh said the group, which has been losing money for the last two financial years, is confident that the new division will contribute "more than what they want".
"It is difficult to answer now (on how we will do). As you know, O&G, we are entering into exploration. We hope to start operations in March or after Chinese New Year. Other than exploration, we have another subsidiary, it is services, to secure more O&G contracts. We look to these two divisions to perform accordingly," he told reporters after its AGM and EGM yesterday.
He added that the recent drop in oil prices will not affect its new division as it is entering into gas segment with a focus on coalbed methane (CBM).
The price of Brent crude oil has fallen more than 40% since June this year.
Globatec Formation will have 55% control of NuEnergy Gas Ltd (NGY) by end of the year. The group currently has 19.9% stake in NGY, a company listed on the Australian Stock Exchange.
NGY is principally a gas and ancillary power generation development company with an immediate focus on establishing unconventional gas E&P in Indonesia.
Earlier in August, the group had subscribed a 60% equity interest each into New Century Energy Resources Ltd (NCE) and New Century Energy Services Ltd (NCES). NCE is in the O&G E&P business with primary focus on unconventional oil and gas while NCES is in the O&G services business.
Group finance director Chen Heng Mun said the group will see some improvement in its financial results next year but did not comment on how soon it expects to return to the black.
"We are still working very hard on the manufacturing side while waiting for contribution from O&G. The O&G sector will still go through exploration period and may not see immediate results. So certain milestones need to be achieved before we feel the first dollars and cents.
"Contribution from O&G won't be so fast...we cannot tell you exactly when but we have a programme (where we will evaluate our progress so far and decide on the) next milestone and how to achieve it," he said.
Goh said its manufacturing division will face challenges next year including foreign exchange, implementation of the goods and services tax, high fuel cost and high labour cost.
"When it comes to manufacturing, we are a supporting industry. When the front-end is not doing well, it will come down to us. We are always the first ones to be hit. We can see that it is coming, that's why we look for new division to venture into. Hopefully O&G can bring in better margin to the group," he said.
Goh said its existing divisions namely semiconductor, precision machining, stamping, automotive and oil palm plantation will continue and with the exception of semiconductor division, all its existing divisions are self-sustaining.
He added that the group is open to diversify further if there are good opportunities to invest, so that it is not dependent on only one industry.
http://www.thesundaily.my
