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PETALING JAYA: Following the recovery in crude oil prices, Sapura Energy Bhd
is said to be mulling the listing of its exploration and production (E&P) arm, sources say.
According to the sources, the idea is on the table and if it does happen, would be an avenue for the company to monetise part of its assets.
Sapura Energy is an integrated oil and gas company with exposure to engineering & construction (E&C) and drilling divisions, besides E&P.
Of these divisions, the E&P is the better performing segment of its business that has been hard hit by the downturn in the oil and gas industry that started from mid-2014 until the third quarter of last year.
The E&P unit is the only segment that made an operating profit for the third quarter ended Oct 31 (Q3’FY18).
For that quarter, Sapura Energy reported a net loss of RM274.4mil - a steep decline from the net profit of RM158.1mil made for the same quarter last year and the RM29.4mil in the preceding quarter.
Revenue in the third quarter fell 42% year-on-year to RM1.28bil following declines in revenue from E&C and drilling divisions.
It also saw lower contribution from its share of profit from joint ventures.
According to TA Research the company’s E&P production was higher at 900,000 barrels of oil equivalent (boe) versus 800,000 in the second quarter.
Sapura Energy capitalised on higher crude lifting price of US$58 per barrel (bbl) as opposed to the US$45/bbl level oil prices had trended in the corresponding period last year.
Brent crude oil price recently breached the key psychological mark of US$60/bbl and at the time of writing was trading at US$68/bbl.
Analysts’ oil price forecast for 2018 stood at US$60-65/bbl.
According to TA Research, based on its conference call with management, development for SK310 B15 field off east Malaysia was completed in October last year and production would be progressively ramped up until it reaches optimum level this January.
While Sapura Energy is expected to be loss making in FY18 ending January 31, some analysts believe that earnings prospect from FY19 should improve on the potential of better-than-expected job flows given the improved oil prices.
At the time of writing, shares of Sapura Energy traded at 77 sen - still lower by more than half the value of what it traded at the start of 2017.
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