UMW-OG’s main strength is the ownership of a young fleet of jack-ups, which are enjoying high demand due to the shortage of jack-ups that are owned and operated by Malaysians.
Currently, there is no domestic competition for the supply of jack-ups. Petronas's huge capex programme and regional requirements for such assets augur well for UMW-OG's prospects. The national company's collaboration with UMW-OG to establish the drilling academy is indeed a major stamp of approval.
Some Southeast Asian markets, like Indonesia, Vietnam and the Philippines, present exciting opportunities, but Malaysia still holds the major appeal.
Having said that, UMW-OG’s operations require a sizeable capital outlay that may exert pressure on the balance sheet. Late deliveries of new assets and a major reversal of the oil price could be a dampener on the company’s expansionary moves.
UMW-OG's investments in key assets, notably the rigs, are shored up by the expectations of E&P activities, and the subsequent rise in charter and utilisation rates.
In addition to the jack-up that is slated for delivery in May 2014 (Naga 6), we are assuming the delivery of two more jack-ups, one each in early-2014 (Naga 5) and late-2014 (Naga 7).
New capacity and first full-year contributions from Naga 5, Naga 6 and Naga 7 are projected to support our 33% EPS growth forecast in FY15 (Figure 53).
Should the crude oil price drop substantially in the near term, E&P activities may slow down, dampening the demand for the assets and,
therefore, adversely affecting the charter rates. However, we understand that as long as the oil price is north of US$60/barrel, most projects in Malaysia are viable.
Sector-beating 3-year EPS CAGR of 80% From a net profit of RM72m in FY12, we forecast UMW-OG scaling net profit highs of RM189m (+162% yoy) in FY13, RM333m (+76% yoy) in FY14 and RM444m (+33% yoy) in FY15, fuelled by an order book of RM1.4bn and a bigger fleet. The drilling business is the major earnings driver, contributing an average of 82% of revenue and 91% of pre-tax in FY13-15 (Figures 51 and 52).
5-year RM3.2bn capex effective FY14 Of the RM2.36bn in proceeds from the listing, RM1.7bn went to UMW-OG's coffers, while the remaining went to UMW-H.
We expect UMW-OG to utilise RM600m or 35% of its share of the proceeds to pare down borrowings taken from the banks and UMW-H, thus reducing its net gearing from 0.7x pre-listing to 0.1x post-listing.
The balance of RM1.1bn will be used to partly fund the requirements for committed capex (Figure 56) and the upgrade of equipment to keep up with the growing order book. Management has allocated RM3.2bn in capex over five years starting FY14 to add more jack-ups.
Beneficiary of Petronas's spending High capital spending levels this year are contingent on continued high oil prices, but national oil companies are especially bullish about boosting their spending with more of it to be ploughed into E&P.
Petronas plans to spend a total of RM300bn over a 5-year period starting 2012 (Figure 15). With 64-72% of revenue generated in Malaysia in FY10-12 (Figure 46),
UMW-OG has been fast to capitalise on Petronas's capex and the growth offered by the sector in Malaysia.
We begin coverage with an Outperform call and a target price of RM4.57. The target price is based on a 40% premium over our CY15 target market P/E of 15.9x to reflect the company’s big-cap status.
UMW-OG has secured a 4-month contract extension for its Naga 2 jack-up drilling rig from PetroVietnam as its builds up its presence in Southeast Asia.
Watch out for the newsflow as the company scouts for contracts for its three new jack-ups to be delivered in FY14.
PetroVietnam has awarded UMW-OG an extension worth US$19m (RM62m) for Naga 2's existing contract, extending it for another four months until Jun 2014.
The extension works out to a day rate of US$155,000, close to our assumption of US$150,000. We have confirmed with management that the day rate of the extension matches that of the existing contract.
What You Should Do Accumulate the stock as UMW-OG embarks on an aggressive fleet expansion to take advantage of the shortage of Malaysian-flagged jack-ups as well as high demand for the asset class in Southeast Asia. FY14 is set to be a hot year given the expected delivery of three more jack-ups, namely Naga 5, Naga 6 and Naga 7.
Published: Wednesday December 18, 2013 MYT 10:51:00 AM Updated: Wednesday December 18, 2013 MYT 10:53:00 AM
UMW Oil & Gas bags US$7mil job from Nido Petroleum Philippines
KUALA LUMPUR: UMW Oil & Gas Corp Bhd (UMWOG) has bagged a US$7mil (RM22.7mil) drilling contract from Phillippine’s Nido Petroleum Philippines Pty Ltd.
The contract, secured by UMWOG's unit UMW Standard Drilling Sdn Bhd is expected to commence in June 2014 for a duration of about six weeks.
UMW Oil and Gas said the job is for the provision of a jack-up drilling rig to drill the Baragatan prospect on behalf of the SC 63 joint venture, where the company will use its latest premium jack-up drilling rig called UMW NAGA 5.
“This first assignment for UMWOG’s newly built jack-up rig confirms our strong belief in an increasing demand for modern, high capability jack-up drilling rigs in this region,” said UMWOG president Rohaizad Darus.
He said the UMW NAGA 5 is a newly built premium jack-up drilling rig that is currently being constructed by KeppelFELS Singapore.
“The premium drilling rig is capable of operating in water depths of up to 400 feet and drilling to a total depth of thirty thousand 30,000 feet sub-sea,” the company said.
In Google , I typed Biz Business, then click Malaysia Business & Finance News , Stocks update / The Star online Inside, look at right hand side, got wrote title as: Latest Business News. its contained sub title regarding latest news.
bro saufi74, dah jual umwog ke? Harga dah RM4.08 Dulu masa first day listing kalau cecah RM4.00 jual, skrg ?? Boleh naik lagi? Saya masih pegang IPO share
Okdoke...saye dah jual half last week..price 3.95-97...masih ade lagi half..Akan tggu 4.30 above..saye dah kate mase first day listing lagi yg umwog akan naik 4.00..so kire bonus lah nie..umwog-ca juga bagus..saye collect dari first day listing lagi..level 0.145-0.17..tapi dah jual abis mase 0.26-27..
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....
Lasallian
392 posts
Posted by Lasallian > 2013-12-17 09:43 | Report Abuse
UMWOG-CA mula naik! Duit dlm poket suda! Memang bagus saham anak UMWOG ni sbb emak drp bakat yg baik punya!