Sapura Energy’s Australian E&P farm-in augurs well for listing
KUCHING: Sapura Energy Bhd’s (Sapura Energy) Australian exploration and production (E&P) farm-in augurs well for the group’s proposed listing, AmInvestment Bank Bhd (AmInvestment Bank) opines.
In a press release, Sapura Energy revealed that whollyowned subsidiary Sapura Upstream Sdn Bhd ( Sapura Upstream) has made its maiden foray into Australia through farm- in agreements to three offshore exploration permits held by Finder Exploration Pty Ltd (Finder), a private oil and gas company based in West Perth, Australia.
“All three exploration permits are located within the highly prolific North West Shelf oil and gas province off Western Australia.
“The EP 483 and TP/25 permit is located close to infrastructure, in shallow water at the southern margins of the Carnarvon Basin while the WA- 412- P permit is located in the northern Carnarvon Basin, adjacent to several large oil and gas fields.
“Both Carnarvon Basin permits contain high quality, drill ready prospects offering significant upside potential.
“The AC/P 61 permit is located in the Vulcan Sub-basin, where it is surrounded by oil and gas discoveries and contains numerous prospects and leads,” the group said.
The group noted that with the farm-in, the joint venture plans to drill two exploration wells in the Carnarvon Basin permits during 2019- 2020 and acquire seismic data in AC/P 61 permit during 2019 in order to mature these potential drilling locations.
“While we expect minimal capex outlays around US$ 10 million for the two exploration wells in the early stages of exploration, this development, which expands its portfolio of probable reserves, is positive for the group’s proposed E&P listing, likely to be announced soon,” Am-Investment Bank opined.
According to the research firm, together with the recent proposed rights issue of up to RM4 billion, the upcoming E& P listing exercise is aimed at cutting Sapura Energy’s financial year 2019 forecast (FY19F) net gearing from 1.6-fold to the group’s targeted 0.6- fold to 0.7- fold.
It highlighted that this enables the group to re-leverage upwards for working capital required for the fresh engineering, procurement, construction, installation and commissioning ( EPCIC) jobs which are increasingly much larger in scope and value.
To note, in the first quarter of FY19 (1QFY19), Sapura Energy has secured RM4.5 billion new orders, already 41 per cent of the RM11.1 billion contracts achieved over three years in FY16-FY18 and accounting for 78 per cent of Am-Investment Bank’s unchanged FY19F revenue.