Malaysia: Sapura Energy earns 'outperform' call following contracts worth RM879m

Sapura Energy was given an "outperform" call with a target price of RM2.08.

Picture for representation
Picture for representation Reuters

Following Sapura Energy Bhd announcement of procuring RM 879 million worth of contracts, PublicInvest Research has given the energy company an "outperform" call with a target price of RM2.08.

New Straits Times reported that the update, published by the research house today, listed four contract awards won by the group, as a result, the earnings estimates was in line with the research house's replenishment assumptions.

On Thursday, Sapura Energy announced the award by PT. Gunanusa Utama Fabricators (PTG) awarded its unit, Sapura Offshore Sdn Bhd, to undertake subcontract works in the Gulf of Moattama in the southern part of Yangon, Myanmar for the PTTEP International Limited project. PTG is the main contractor for the project.

The job scope consisted of various segments including engineering, procurement, construction and installation of associated pipelines, transportation and installation of new offshore wellhead platforms, brownfield modification of existing platforms, installation of telecommunications and control system integrated to the existing facilities with an expected completion by March next year.

Other contracts bagged were from Brunei Shell Petroleum Co Sdn Bhd award to Sapura Offshore (SO), Oil and Natural Gas Corporation Limited Award to SO as well as the PTTEP Australasia (Ashmore Cartier) Pty Ltd award to Normand Sapura Pte Ltd.

Meanwhile, on Thursday, Asia Bioenergy Technologies Bhd secured a 30-month subcontract work from Tenisha Construction Sdn Bhd for subcontract works in Pengerang.

The award is worth RM220 million, and in its filing with Bursa Malaysia, the group said its wholly-owned subsidiary Asiabio Petroleum Sdn Bhd received the letter of award from Tenisha with an expected execution of the Subcontract Agreement a month from the date of the letter. The company also said among the works that it would carry out were designing, erecting, inspecting, maintaining and dismantling scaffolding and formwork systems on site in Pengerang, Johor.

The group said both companies will explore into entering various agreements to outline the roles and responsibility of each party, while a possibility of setting up a joint venture to expand its supply of ancillary services such as blasting, painting works, and minor fabrication works via an integrated yard.

Tenisha began its operation in the oil and gas industry in May last year, where Asiabio said it has been able to secure various works order from PRPC Utilities and Facilities Sdn Bhd since.

PRPC is the owner of the contract in relation to the Petroliam Nasional Bhd proposed Refinery and Petrochemical Integrated Development (RAPID) complex in Pengerang, Johor.