Sapura’s FID in SK408 gas fields a positive devt for E&P division
KUALA LUMPUR: Analysts are positive on Sapura Energy Bhd’s (Sapura) latest job in the development of SK408 gas fields as it drives up the potential listing and valuation of its exploration and production (E&P) division.
On Wednesday, Sapura announced that its wholly-owned subsidiary, Sapura Exploration and Production (Sarawak) Inc (Sapura E&P), and its partners Petronas Carigali Sdn Bhd and Sarawak Shell Bhd have taken the Final Investment Decision (FID) to develop the Gorek, Larak, and Bakong fields as phase 1 in the SK408 Production Sharing Contract.
The fields would be developed as three separate wellhead platforms tied back to the exisiting processing facility and to the Malaysia LNG Sdn Bhd (MLNG) complex in Bintulu.
According to Sapura, the SK408 gas fields will be Sapura E&P’s second major upstream gas development project in East Malaysia, following the development and commencement of production from the SK310 B15 gas field.
“We remain positive on Sapura’s potential listing of its E&P division as the group together with its partners Petronas Carigali and Sarawak Shell have reached the FID to develop the Gorek, Larak and Bakong fields as phase 1 in the SK408 production sharing contract following the signing of the key terms to the gas sales agreement.
“As the fields will be developed as three separate wellhead platforms tied back to the existing processing facility and to the MLNG complex in Bintulu, we expect Sapura’s fabrication yard utilisation to improve significantly towards the end of the year,” the research arm of AmInvestment Bank Bhd (AmInvestment) opined.
Upon commencement of production by the fourth quarter of the financial year 2020 forecast (4QFY20F), the research team believed that the three fields could bump up Sapura’s E&P’s current gas production of 100mmscfd to 400mmscfd in 1QFY22.
“All-in, Sapura’s daily production could surge 2.5-folds to 25,000 barrels of oil equivalent,” it pointed out.
It noted that the fields under the SK408 gas field development project, which have an estimated reserve of 2.8 trillion cubic feet of gas, are part of the discoveries made by Sapura E&P in its 2014 drilling campaign.