1. Brent is projected to remain in the USD 50-60 price range......Petronas crude trades at a premium of USD 5 above Brent - this price range will not help this company
2. Petronas requires 10-12 rigs.............UMWOG has 7 so possible full utilization - No comment, let see if all will be given to locals, at what rate and number of wells
3. Mgt says above USD 50 price..........they can make money - They used to say they can profit with a certain level of utilization. Anyway, do your own analysis, don't trust management or analyst or periodicals. Not to say they are lying but they are very good in telling half truths.
4. UMWOG is still on cost cutting phase...........savings here can offset maintenance of rigs - Really nothing else to cut, their crew pay has just been cut recently.
5. Borrowrings have halved...........interest savings RM 15m per qtr - Needless to say
6. Long term loans have been refinanced...........possible some interest savings - Needless to say
7. Cash tied to borrowings have been freed up. - That cash should have been freed up long time ago. This cash are IPO proceeds used as collateral to borrow USD. Without this cash tied to loan, there should not be any investment income in Q4.
8. Charter rates at USD 70-80k better then before - Maybe can ngam ngam breakeven (just try to be positive)
9. Rigs at full utilization currently..........some new contracts sourced.....possible minimum impairments (not a cashflow item) - Not interested to know, even if full utilization, profit won't be fantastic. The charter has to go up. Unfortunately, contract value no longer disclosed.
10 Mgt says they will be cashflow positive after rights issue - What drive a share price up? Being profitable or cash flow positive?
11 No need to buy new rigs - Yeah, the price of new rig won't go up so soon, no hurry to buy a new one.
12 Mkt price is around 30 sen........low downside risk - When it was 90 sen ... then 80 sen ... 70 sen ... 60 sen, it was also viewed as low downside risk during those prices. Check back the postings. Anyway, my point is, your amount of loss is the same when the price drop from RM3 to RM1.50 or from 60 sen to 30 sen, your investment value will be halved.
13. PNB is the largest shareholder..............Petronas may give full support - PNB has always been the largest shareholder indirectly, Petronas is giving support now because of the current low oil price. Petronas also has its KPI to meet and employees to feed. If the rig is down, Petronas will not pay them but may even sue for damages. So what it is owned by PNB.
Can u please e-mail the mgt to sell umwog to the highest bidder Perhaps u can do all the minority shareholders a good deed & help them to get a better price than the current market price instead of running down the company here in this forum. I will than buy some Thank you
I know I am doing a good deed here by warning everyone since beginning of this year, when price was probably around 90 sen? I know another person who is good in posting here but will delete his postings later on.
I think good time to enter at demonstrated side way ~30cents . QoQ eps and net profit continue to improve. understand your support/exit for capital protection then just wait for next QR. happy investing...
My posts were actually quite rude and served no purpose after warning others. Those posts are also offensive as sarcastic. Talk like that is against my religion
pity those bought before..never buy downtrend counter - catching a falling knife... We know this counter 6 months in the sideways with .275 is strong support. We also know QoQ, EPS for last4 qtrs improving w/ last qtr 3M net-profit with new bags biz of RM27m drilling job. i think collecting between .275-315 w/ stop lost at 250 is calculated risk. Oil prices should stabile above 50 with Saudi & Russian ties cuts till eof 2018.. also give a ring to your UMW friend on the current biz substation. my bet still good for short-mid term investor. keep the investment simple and stupid@aka fool. let details rigs# and charter rates analysis done by the expert like i3lurker.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Andrew62
308 posts
Posted by Andrew62 > 2017-12-05 08:51 | Report Abuse
Very profound research of this counter and advise much appreciated.Thank you.