O&G STOCKS IN BULLISH MOMENTUM
More jobs to be awarded by Petronas expected to push industry forward
OIL and gas (O&G) counters on Bursa Malaysia, such Icon Offshore Bhd, Hibiscus Petroleum Bhd and Sapura Energy Bhd, have been showing an upward trend over the past week, revealing a bullish momentum.
With more O&G contracts expected to be dished out by national oil company Petroliam Nasional
Bhd (Petronas), the local O&G industry is set for an upward trajectory.
Maybank Investment Bank (Maybank IB) said in a note more jobs were expected to be awarded by Petronas to local service providers.
Icon Offshore’s share price rose as much as 8.7 per cent in active trade yesterday morning, after the company announced last Friday it had secured five contracts and a work order for the provision of vessels.
The jobs are offshore support vessels for the production operations of three petroleum arrangement contractors and a work order for the provision of a straight support vessel to Petronas Carigali Sdn Bhd.
On the corporate side, Icon Offshore’s new management also gave confidence to the market and eliminated negative perception about its corporate governance and cost management.
Icon Offshore is under the Corporate Debt Restructuring Committee scheme to address its balance sheet. It will announce its restructuring results in the third quarter of this year.
Hibiscus Petroleum’s share price rose 7.08 per cent to RM1.21 yesterday after it announced that its jointly-controlled operating company, Anasuria Operating Co Ltd, is on track to execute the Guillemot A GUAP1 sidetrack well in the United Kingdom North Sea. Sapura Energy saw its share price exceeding 37 sen yesterday as it continued to improve earnings on the back of a cleaner financial slate.
Maybank IB said Sapura Energy’s backlog orders stood at RM17.2 billion and were still growing. It has a target price of 50 sen on the company.
Other positive O&G counters were Uzma Bhd, which rose 1.01 per cent to 99.5 sen, Barakah Offshore Petroleum Bhd, which went up five per cent to 10 sen, and Bumi Armada Bhd, which increased 2.56 per cent to 20 sen, at the close of Bursa Malaysia yesterday.
Oil prices have been on the rise in the first quarter this year, with both West Texas Intermediate and Brent posting their best quarterly performances in a decade.
Brent crude oil opened above US$70 (RM286) per barrel on Monday, sustaining its fivemonth highs as global oil supply tightened with cuts by Organisation of the Petroleum Exporting Countries and sanctions on Iran and Venezuela.