THE BUZZ
SapuraKencana Petroleum (SKPETRO) announced on Bursa Malaysia yesterday that it has secured a three month extension for the utilization of its self-erecting tender rig, the T-6, valued at approximately USD9.2m (RM28.1m) from Carigali Pttepi Operating Company and Carigali-Hess Operating Company.
OUR TAKE
More about the contract. The contract was initially awarded to SKPETRO for a duration of 28 months commencing 21 Dec 2010, with an option for two three-month extensions. The extension of the contract will be for 3 months commencing 21 April 2013 till 20 July 2013.
No change to our earnings forecast. Assuming a net margin of 10%-15%, the impact to our earnings forecast is minimal at <1%. We are therefore retaining our FY14 forecast.
Maintain BUY. We continue to like SKPETRO, one of our top oil and gas (O&G) picks, and value the stock at RM2.88, pegged to 20x FY14 EPS. We believe the company is poised to beef up its orderbook further in 2H12 as Petronas is expected to dish out more contracts very soon.
Source: OSK
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