Why this counter isn't going up? That's because the business of this counter is not directly correlated with oil price. UMWOG major business is providing drilling services. So whether the oil price go up or down does not matter, what matters is whether Oilfield Operators (i.e. Petronas, Total, etc.) contracts UMWOG for rig utilization.
Let's say, if oil price shoots to $140 tomorrow, this counter will still take time to go up. If this company secures long-term high-value contracts for all 7 jackup rigs tomorrow, then this counter will shoot up.
Please, always understand the business nature of a company before you invest. Don't be a blind fool.
No problem, we learn from others and share what we know. Currently UMWOG has all 7 rigs chartered but day rates are incredibly low. Do not be surprised if the upcoming quarterly financial results are in the negatives again.
I think most analysts are expecting UMWOG to be recording losses until next year. So can safely say this year will not be recording profits yet. Any significant profits may only emerge post 2018
If the price stays at this level, the rights issue will not be attractive enough for many investors. Ya they'll offer sweeteners like free attached warrants, but normally investors subscribe rights issue at a discounted market price
Uma, if company is still in loss position with 7 rigs chartered out, there will be another round of impairment end of this year. Looks like 30 sen is still not cheap enough to enter into this counter assuming this impairment has not been factored into the current price.
Offshore, Don't take my words for it, but that is a possibility. Judging by how most of the existing contracts do not actually favor the company financially, a lot of additional and hidden costs are incurred upon UMWOG. Business development and contracts team were not diligent and blindly accepted contracts for the sake of having one. Think about it, you have a rig, client requests for additional equipment apart from the original rig package, but rig owner is to bear all additional costing and charges. With the agreed dayrate, some rigs are still probably paying off for these additional equipment and not making profit yet. Rig equipment are not cheap.
But of course, it is still better than stacking the rigs.
Despite all the negativity, I doubt this company will go under with the support from PNB. If you can buy and hold for a year or two from now, go for it.
Unless PNB can arm twist Petronas to award contracts at a higher than market rate that can allow UMWOG to be profitable, it's really hard to see how this company can be back to the black within 2 years. Seriously, if this company really got potential, why not PNB does an MGO, take this company private and re-list it when the oil price recovers (which most people here think will happen soon) at a higher IPO price.
Client rig utilization is low due to oil price. So once oil price bounce to atleast above 70 then it depends on Oil company like Petronas,shell,murphy, etc whether they wanna boost production on the workover rig..agree with offshore that this upside might need to wait for another 2-3 years minimum. US shale oil is slowing down the oil price for now.
Just my personal view that even Malaysia Marine and Heavy Engineering which has a 66.5% controlling stake by MISC that's owned by PETRONAS also just recorded bigger losses, its 7th consecutive quarter of continued losses. If PETRONAS wanna save a company, it might wanna do with Malaysia Marine and Heavy Engineering first, not UMWOG
that day when the price surge to 0.37, reason is khazanah bought all the right issue? now the price back to original 0.285-0.30, no more support for this counter?
Currently mothershare priced at 0.295, what is the advantage to subscribe right issue at 0.30 with exercise price of 0.395? Anybody can explain this? I am really confused.
It really depends on your views naimfm. Think about it this way, if you think the charter rates gonna improve for whatever reason (perhaps gotta take a contrarian view here), then it may be worth it as the warrants may be able to be exercised in the money in the future?
Everyone who own UMWOG stocks should go to the EGM on Aug 25 to vote against the rights issue. The rights issue is not good for shareholders. The prospectus implied a 23% discount on Theoretic ex price. At current rate, it's more like negative discount.
Current NTA per share is about Rm1. After rights issue, it will be between 47-49 sen. So I am urging everyone to go to the EGM to vote "NO" to rights issue. Propose that PNB take the company private. Taking the company private is better for PNB and the shareholders. So remember to go to the EGM on Aug 25. If PNB agrees to take the company private, the stock price will skyrocket.
Before charter rates go up, oil price has to go up first. This is when oil companies restart their drilling campaign. It will take some time to mop up the rig oversupply. Only then, the charter rate will go up. Will the oil price ever go up? Opec will not continue to control production because many members are not following the quota.
That current NTA of RM1 is just a number. I am sure PNB knows this company doesn't worth that much because impairment has not fully dialed in. Those low charter rate contracts are probably secured just to buy some time from having full impairment effect.
if you guys vote "no" to the right issues and have PNB take this company private, PNB can then remove all the useless top management and the cronies. this is a good choice, brand new start for the company. out with the useless and old. in with the new. you look at this company ever since the president step in it has only went downhill. shit management no hope. talk a lot of cock only
Whatever you vote does not matter. PNB's vote alone is more than enough to carry the resolutions through. This Co went downhill since new president??? I m not too sure about that. Almost, if not all, O & G counters were in trouble since 2 to 3 years ago. As for UMWOG slide in share price, this was expected as they are financially distressed. Moreover with UMWH washing their hands clean from OG by distributing all their OG shares, it was expected to go further south.
The management should also be changed. They just got too comfortable with that "there is always PNB behind us" mentality. Both UMW and UMWOG management are like that. In the end, it is the unit holders that will bear the brunt by getting a lower amanah saham return.
Yes. With PNB's controlling stake, the rights issue resolution will carry the day. But PNB can't vote to exempt itself from undertaking MGO. So if minority shareholders like you vote NOT to give PNB the exemption, PNB may have to undertake the MGO. The share price will get a good bounce. It is tantamount to taking UMWOG private. The minority shareholders are in control in this regard.
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Posted by Andrew62 > 2017-07-29 09:35 | Report Abuse
Tan Sri is a corporate turn around genius.Only not happy with UMW. They should change the name of this counter.