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DATE : 01 November 2017
Stock : UMWOG (0.335 cts)
Target Price : 0.45 cts (immediate) / 0.60cts (M-T)
"This share I am calling at 28c level. Today I called it again at 32c base on volumes and generated more interest buyer. If sustain this momentum at current level 0.30c, this counter should hve bright and shine upcoming weeks." - Kim Spartan
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THE PROFILES
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UMW Oil & Gas Corporation Bhd. is a Malaysia-based multinational provider of drilling and oilfield services for the upstream sector of the oil and gas industry. In drilling services business, they operate in both Malaysia and in other parts of South East Asia, providing drilling services for exploration, development and production wells with their fleet of offshore drilling rigs and providing workover services through HWUs. In drilling services business, they also act as an agent in Malaysia for International companies providing specialised drilling equipment and services. In oilfield services business, they offer threading, inspection and repair services for OCTG in Malaysia and overseas, with a focus on premium connections used in high-end and complex wells.
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THE KEYNOTE
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UMWOG - (JAN 2017) - Has secured a contract from Petronas Carigali to provide jack up drilling rig services. Had received the conditional letter of award and it would assign its UMW NAGA 7 for this contract.
UMWOG - (JAN 2017) - UMW is exiting the oil and gas (O&G) sector to refocus on its core businesses of automotive, equipment and manufacturing & engineering. The exit from oil & gas would begin with the proposal for the “distribution in specie” of all its shares in UMW Oil & Gas Corporation Bhd (UMW O-G) to all entitled UMW shareholders by the second quarter of 2017. UMW explained the decision to exit the O&G was to enable it to focus on the better long-term growth potential. Concurrently, UMW O-G is also proposing to lead the oil & gas industry consolidation.
UMWOG - (JAN 2017) - UMW Oil & Gas Bhd (UMWOG) has kick started the consolidation among local oil and gas (O&G) players with its planned demerger from UMW Holdings Bhd (UMWH). UMWOG will in turn acquire Ekuiti Nasional Bhd (Ekuinas)'s O&G assets. UMWOG's acquisitions are valued at RM721.61 million. UMWOG will subsequently embark on a recapitalisation exercise via a rights issue of approximately RM1.8 billion, inclusive of Ekuinas' application of excess rights shares worth RM322 million. UMWOG intends to procure similar support from Permodalan Nasional Bhd (PNB).
UMWOG - (MAR 2017) - UMW Oil & Gas Corp Bhd (UMW O&G)’s indirect wholly-owned subsidiary UMW Offshore Drilling Sdn Bhd has been awarded a contract for the provision of a jack-up drilling rig by Vestigo Petroleum Sdn Bhd. Vestigo, which is wholly owned by Petronas Carigali Sdn Bhd, is principally involved in the development and production of marginal fields in Malaysia.
UMWOG - (MAR 2017) - Has bagged a contract from British oilfield company Petrofac (Malaysia-PM304) Ltd for the provision of jack-up drilling rig, specifically UMW Naga 5, to drill two wells. There is an option for an additional one well plus one well commencing in the second quarter of 2017. The letter of award was secured via UMW Offshore Drilling Sdn Bhd (UOD), a wholly-owned subsidiary of UMW Malaysian Ventures Sdn Bhd, which is in turn a fully-owned unit of UMW O&G.
UMWOG - (APR 2017) - AmInvestment Bank Research has upgraded UMW Oil and Gas Corp (UMW-OG) to “buy” from “hold” with a higher fair value of 80 sen, based on book value at a 20% discount on the cost of the group’s rigs. The research house said its valuation had now excluded the 30% reduction to the acquisition costs of Icon Offshore and Orkim.
UMWOG - (APR 2017) - UMW Oil and Gas Corporation Bhd (UMW-OG) whose Ekuiti Nasional Bhd (Ekuinas) initiated consolidation with Icon Offshore Bhd and Orkim Sdn Bhd was cancelled now plans to make a cash call. Permodalan Nasional Bhd (PNB) had indicated its support for the recapitalisation exercise involving a proposed rights issue with warrants - to raise proceeds of up to RM1.8bil. The proposed rights issue entails the issuance of up to 6.053 billion rights shares at an issue price of 30 sen per rights share to raise RM1.81bil. The issuance of the rights shares will be together with up to 1.513 billion warrants.
UMWOG - (MAY 2017) - UMW Oil & Gas Corporation Bhd (UMW-OG) has received two contracts from Petronas Carigali Sdn Bhd worth US$34.81mil or RM151.07mil to provide services to its firm and optional wells. UMW-OG said the contracts are to provide jack-up drilling rig services. It said the first contract is to provide drilling rig services for Petronas Carigali’s drilling programme, whereby UMW-OG will assign its UMW Naga 3 for this contract. The contract is to drill five firm wells with the option of drilling additional five wells, starting in June 2017.
UMWOG - (MAY 2017) - UMW Oil & Gas Corp Bhd (UMW-OG) is bidding for 33 jobs worth a combined value of RM3.2bil. The oil and gas services provider said on Monday of the total jobs being tendered for its jack-up rigs, 20 were based overseas and 13 were local jobs.
UMWOG - (JUN 2017) - Proposed rights issue with free warrants to repay revolving credit (RC) debts is critical to prevent a liquidity crisis. UMWOG is expected to convene an extraordinary general meeting (EGM) next month to consider proposals and resolutions, which include a whitewash waiver for major shareholder Permodalan Nasional Bhd (PNB) from undertaking a mandatory general offer, and the issue of new redeemable convertible preference shares (RCPS) to PNB. The rights issue proposes to raise RM1.8 billion in cash, of which RM1.5 billion will be used to repay borrowings, principally RC debt. As the RC lenders are clamoring for repayment, a successful rights issue is critical to prevent a liquidity crisis, in our view.
UMWOG - (AUG 2017) - Reported a fall in second quarter losses, thanks to a higher rig utilisation rate coupled with lower losses from oilfield services. The group also announced that it has won a RM113 million contract for the provision of jack-up drilling rig services. The contract was awarded to its indirect wholly-owned subsidiary UMW Offshore Drilling Sdn Bhd by Repsol Oil & Gas Malaysia Ltd. UMW-OG said it has assigned its UMW NAGA 5 jack-up rig for the one-year contract, with an option to extend for another year.
UMWOG - (OCT 2017) - UMW Oil & Gas Corporation Bhd's (UMW-OG) 4.836 billion new shares issued under its renounceable rights issue will be listed and quoted. Its 1.51 billion new warrants issued pursuant to the rights issue would also be listed. The new shares followed the conversion the rights shares issued by the oil and gas company under its restructuring exercise to turn around the loss-making company. The rights shares were issued on the basis of 14 rights shares for every five shares held together with 1.209 billion free warrants. The warrants were issued on the basis of one warrant for every four rights shares subscribed.
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WHAT KIM'S VIEW?
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"This is just still beginning. Watch and save it as your favourite this November till December! - See you at RM0.60cts at least!". - Kim Spartan
Regards,
Kim Stockwatch
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