News Dialog
Group Bhd (Dialog) announced last Friday that its wholly-owned Dialog D&P
Sdn Bhd had entered into a MoU with Halliburton Energy Services (M) Sdn Bhd to
jointly cooperate to pursue projects and opportunities in the redevelopment of
mature oil fields in Malaysia.
Comments This
is a positive development as the strategic alliance with Halliburton will
develop its upstream oil & gas capabilities.
There is no issue
here as its previous strategic alliance with Roc Oil was for marginal oil
fields while this tie-up is for mature oil fields.
With this
announcement, we believe that the alliance is close to securing a mature oil
field project.
Meanwhile, according
to Roc Oil, Balai Margin Fields is expected to see its first oil flow in as early
as Oct this year. In 2Q 2013, the JV partners will decide on whether to pursue
a full field development, with added gas production plans.
Outlook It is
too early to gauge the potential earnings impact from this alliance.
Nonetheless, the
group’s profit is expected to reach new record levels from 2HFY12 onwards as new
sources of income kick-in, such as those from LT2 and EPCC jobs from LT3,
Pengerang CTF and Balai Marginal Fields contracts.
Forecast No
changes to our estimates.
Rating MAINTAIN OUTPERFORM
Valuation We
are maintaining our price target of RM3.09/SOP share.
Risks Risk
to our call is any potential delays in its inhouse EPCC jobs, which will
negatively impact its future recurring incomes.
Source: Kenanga
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