SapKen sees gas output in 2017

  • Business
  • Thursday, 26 Jun 2014

From left: Shahril, SapuraKencana chairman Datuk Hamzah Bakar and executive director Ramlan A. Malek at the briefing.

SERI KEMBANGAN: SapuraKencana Petroleum Bhd expects to see the first production of gas from the assets it acquired from Newfield Malaysia in the first quarter of 2017, said president and group chief executive officer Tan Sri Shahril Shamsuddin.

Last October, SapuraKencana paid RM2.85bil for the Malaysian oil and gas fields that Newfield sold via a bidding process. These assets are now called SapuraKencana Energy Malaysia Inc (SKEM).

Shahril told reporters after the company’s AGM and EGM that SKEM, together with its partners, would embark on a gross capital expenditure of some US$370mil (RM1.18bil) to develop one of its gas assets.

In April 2013, Newfield announced a gas discovery on the SK310 block in Sarawak following the successful drilling of the B14-1 and B15-1 wells.

Shahril said SKEM and its partners would spend some US$80mil (RM256mil) to complete the remaining six wells exploration commitment for SK408 over the next two years.

On its debts of RM15.24bil, which translates into a gearing level of some 1.2 times, Shahril said the group had restructured its capital, which would result in debt levels halving in four years.

As at April 30, SapuraKencana had debts amounting to RM15.24bil, of which RM1.24bil are short-term debts while RM13.99bil are long term.

On March 18, SapuraKencana had entered into a facilities agreement with 13 domestic and international financial institutions for multi-currencies credit facilities of up to US$5.5bil comprising term and revolving credit facilities.

The company has also declared a dividend of 2.35 sen for its first quarter to April 30.

For the period, net profit increased 443.86% to RM509.42mil on the back of a 50.6% rise in revenue to RM2.44bil

Shahril added that while a dividend policy was not yet in place, the company would start to pay dividends.

“We will have to balance between reinvestment for our capital expenditure and paying dividends to our shareholders. However, we will not jeorpardise growth in favour of dividends,” he said.

SapuraKencana currently has an orderbook of RM31bil and is bidding for some RM30bil worth of jobs.

It expects to secure about RM10bil of the jobs it is bidding.

On the prospects of bidding for more marginal oil fields under the risk-service contracts (RSC), Shahril said SapuraKencana had put in its bid and was hopeful of hearing something by early next year.

SapuraKencana is currently the operator and contractor for Berantai RSC, one of the five RSCs awarded by Petroliam Nasional Bhd to date.

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Business , SapKen , Newfield , dividend


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