UMW's semi-submersible drilling rig, Naga 1 (for CR coffeetable book)
KUALA LUMPUR: UMW Oil & Gas Corp Bhd (UMW-OG) posted earnings of RM3.37mil in the third quarter ended Sept 30, 2017, its first quarterly profit in two years.
In a filing with Bursa Malaysia on Friday, the drilling and oilfield services provider said its revenue surged 263.5% to RM180.51mil following stronger demand for drilling services.
The better demand was due to higher levels of oil and gas activities in view of greater certainty and stability in oil prices.
As a result, the group reported a profit again in the quarter under review against a loss of RM135.43mil a year earlier.
For the first nine months of this year, UMW-OG still incurred a loss of RM151.74mil, albeit a smaller loss compared to RM267.75mil in the corresponding period of last year.
Revenue for the January-September period, however, grew 47.6% to RM394.70mil.
UMW-OG, which ceased to be a subsidiary of UMW Holdings Bhd
in July, said the revenue improvement was spurred by the reduction in idling time of the group’s seven jack-up rigs as a result of increased demand for drilling services.
On its prospects, UMW-OG said with the benchmark Brent oil price stabilising above US$50 per barrel for almost a year and breaching US$60 per barrel in late October, more confidence was seen in the upstream sector, resulting in more activities especially in drilling.
It noted that all of its seven jack-up drilling rigs were currently under contract serving multiple oil and gas operators.
“The group is continuously bidding for new contracts to replace expiring ones and also negotiating for extension of existing contracts. While there is no guarantee for continuous full utilisation of the group’s drilling rigs, utilisation rate is expected to stay at relatively healthy levels in the near future. However, time charter rates remain challenging due to global oversupply of rigs,” said the company. - Bernama
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