PERDANA (7108) - A Diamond Eye
Perdana Petroleum Berhad (7108) is a non stranger in the oil and gas sector. Perdana is quite diversified in the in it's oil and gas service offering, which caters to the greenfield and brownfield oil and gas segments. Perdana current asset fleet can be largely categorized under Anchor Handling Tug Supply (AHTS) and Accommodation marine vessels.Perdana AHTS market is largely driven by drilling activities, however, it can also be utilized for supply runs for development and production phases. The accommodation vessel are mainly utilized for maintenance and hook up commission works (HUC) which are typically for the brownfield segments.
With the current sentiment on the crude oil that had slumped more than 40% towards a region of USD 50 per barrel, how could Perdana benefit from the current situation?
Let's have a glance at the latest price chart of Perdana.
The chart had highlighted the accumulation process through the period which had saw good amount of volume being transacted at the range of RM 1.80 prior before the sell down that is caused by the slump in crude oil. Prior to the plunge, Perdana had finally found a consolidation zone at the lower price range of RM 1.00 to RM 1.25, which had also seen large open market mop up of shares by major shareholder, Dayang Enterprise Berhad.
The latest uptrend had been strong with solid white candle with strong and reasonable of volume to support that the fact of Dayang is still mopping up the shares in Perdana.
The
latest reported purchase by Dayang had raised it's stakes to 30% in
Perdana after purchasing more than 11 million of shares through the open
market in 3 consecutive days, putting up hot speculation on further
corporate exercise between the both company.
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Perdana - Hot Shots for Dayang
Perdana
had started to become the hot darling for Dayang back then at 2013 when
Dayang had a strong exposure for the Pan Malaysia contract which could
see contracts value summing up to RM 7 to 10 billion. With the contract
on the line, Dayang had started to charter vessel from Perdana as Dayang
is lacking of vessel for the brownfield development. The latest
brownfield contract worth RM 280million that is secured by Dayang is to
provide a major modification work for the Bardegg-2 and Baronia Enhance
Oil Recovery development project.
Dayang
had also been eying for 2 HUC prospect from the Sarawak & Sabah
Shell and Petronas Carigali Hook Up & Commission works, which could
be announce next year. In addition, Dayang is also venturing into the
EPCC segment of the value chain.
Currently,
Dayang orderbook stands healthy at RM 4billion which could last Dayang
to 2018. While Dayang had been capturing much contract from the Pan
Malaysia basin, one of the rising concern in Dayang is the availability
of vessel to be commissioned for the work. With Perdana on the line
with 19 young fleet vessel (average age 4.8 years), Dayang will come
handy in fully utilizing them in time to come. Currently, Perdana is
building it's 18th and 19th vessels, both 500-men workbarges, which will
be slated to complete in 1Q 2016 and 2Q 2016.
Both the 500 men vessel are slated to commence for work for the 2 HUC that Dayang had been waiting to be announced in 2016.
Perdana
had always been eyed as a privatization target by Dayang since 2013.
Considering the current long term contract from Perdana and exposure to
brownfield and maintenance services, Perdana bottom line will not be
affected too much by the low crude oil price sentiment, however, there
are still chances of contract being renegotiated with a lower price.
Since the oil slump that brought down the share price of Perdana, the
privatization exercise from Dayang might come even faster than expected.
According to close sources, Dayang
is looking to offer approx RM 1.60 per share for Perdana after
triggering the MGO, a deal which will be handled by a well known
investment bank in Switzerland. The privatization exercise which
could take approximately 3 to 6 mths will then pace everything good for
Dayang to enter 2016 with a better control. Currently, Dayang just
needed another 23 million of shares in it's hand to trigger the 33% MGO
mark.
In conclusion, Perdana might be an interesting target for the near term given
- Major Shareholder huge open market purchase
- On the verge of privatization exercise by Dayang with potential RM 1.60 a share.
- Vessel are operational with long term contracts, hence a limited downside from the risk on the fluctuating oil price
- Exposure to brownfield EOR (Enhance Oil Recovery) and maintenance contract
- Current MiddleEast tension which could see a revival in oil price for the short term outlook
Ride on with Perdana? You decide
(Potential suspension / limit up counter due to corporate announcement)
Regards,
Bone
