- We maintain our HOLD recommendation on SapuraKencana
Petroleum (SapuraKencana) with an unchanged fair value of RM2.60/share, pegged
to an FY14F PE of 18x– 20% above the oil & gas sector’s 15x currently.
- SapuraKencana has announced that the charter of its T-6
self-erecting tender rig to Carigali PTTEPI Operating Company Sdn Bhd (CPOC)
has been extended by 3 months from 21 April 2013 to 20 July 2013 for US$9mil or
RM102k/day, slightly higher than the existing charter rate of RM100k/day.
Hence, we retain SapuraKencana’s FY13F-FY15F net profit.
- Recall that the original T-6 contract was for an initial
duration of 28 months commencing from 21 December 2010 and expiring on 21 April
2013. Apart from the primary period, there was an option for two extensions of
three months each, which means that CPOC can further extend the charter to 21
October 2013.
- The group currently has 6 tender-rigs operating offshore
Malaysia and Thailand. The group wholly owns KM-1 and retains a 51% stake in
the other five rigs with Seadrill having the remaining stake.
- For the rest of the year, we expect a higher magnitude of
newsflow for hook-up, construction and commissioning (HUCC) works vs. pure
fabrication jobs.
- The tenders which the group is bidding for include the RM8bil-RM10bil Pan-Malaysian umbrella
HUCC contract and RM600mil subsea maintenance job, which is scheduled to be announced
by the end of this year.
- But the large central processing platform and multiple
wellhead platforms for the North Malay gas basin Phase 2 development, and
Bokor, Dulang and Semarang fields may only materialise next year.
- SapuraKencana’s valuations are currently fair at an FY14F
PE of 16x, which is at a 5% premium to the sector. We also do not discount the
possibility of Seadrill disposing of its remaining 6% in SapuraKencana to fund
its asset expansion in Brazil.
Source: AmeSecurities
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