A 15+5 year charter worth USD3.3b (ex-cost escalation).
To contribute MYR110m-MYR170m p.a. profit from 2017
TP raised by 44% to MYR4.35 (SOP-based), offers 50% upside.
Eni Ghana has awarded Yinson a chartering, operation & maintenance (O&M) contract of a FPSO facility at the Offshore Cape Three Points Block (OCTP) located in the Tano basin, 60km offshore Ghana. OCTP is operated by Eni Ghana (47.2%) with Vitol Upstream Ghana Limited (37.8%) and Ghanaian state-owned Ghana National Petroleum Company (15%) as its partners. The contract is for a 15-year firm charter, valued at USD2,539m with 5 yearly extension options worth USD717m, exercisable by the client. The FPSO is scheduled for commercial operations by 2017.
This is a major positive, from both an operating and financial perspective. Foremost, this is a bankable contract with good counter-party risk. The OCTP field is commercially viable with reserves recoverable beyond 15 years. This is Yinson’s maiden FSO/ FPSO contract (i) secured outside Vietnam (its main domain) and (ii) post the purchase of Fred Olsen Production (FOP) in 2013, validating the USD170m M&A deal. This job win is also Yinson’s first FPSO contract valued at the USD1b capex level, enabling it to further consolidate its position in the Top-10 global league table. We gather that the revenue has 2 major elements: (i) bareboat (BB) charter, (ii) O&M rates. Based on an USD1b conversion capex, the daily BB rates should range around USD354k (firm charter) and USD315k (extension) respectively. The O&M rate is projected to be at USD85k per day. Yinson will convert its already purchased Samsung-built tanker Ulriken (bought for USD26m) for this job. We estimate this Ghana FPSO contract to contribute MYR110m- 170m p.a. net profit from FY1/18 to FY1/22. Valuations wise, this job adds MYR2.45b to NPV (MYR2.36/shr), based on a 12% project IRR.
As such, we raised our TP to MYR4.35, changing our valuation methodology to SOP-based (previously on 18x FY15 PER).
Source: Maybank Research
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matrix6050
Thanks Ctea for sharing
2015-01-29 10:13