KUALA LUMPUR: AmInvestment Research remains positive on Sapura Energy Bhd
's potential listing of its exploration and production division on news that it would develop Sarawak's SK408 gas fields.
It was announced yesterday that Sapura Energy has reached the final investment decision with its partners 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.
The research firm said it expects Sapura's fabrication yard utilisation to improve significantly towards the end of the year 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.
"Upon commencement of production by 4QFY20F, 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 2.5x to 25,000 barrels of oil equivalent," it said.
AmInvestment Research noted that Sapura E&P is the development and production operator of the Larak and Bakong fields while Sarawak Shell Bhd is the development and production operator of the Gorek field.
Sapura E&P has 40% working interest in the SK408 development, it added.
The research firm maintained its buy recommendation on Sapura Energy with unchanged forecasts and a fair value of RM1 a share based on a 50% discount to FY19F book value.
"More EPCIC jobs are expected, possibly from a central processing platform for the KG-DWN-98/2 deep-water project off India's east coast. Hence, we believe that the 66% discount to book value currently is unjustified vs. 10% for Bumi Armada and 52% for MMHE," it said.
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