Kenanga Research said while the outlook is expected to improve from financial year 2020 (FY20) onwards, it has maintained its
SERI KEMBANGAN: Sapura Energy Bhd
is mulling to either sell part of its drilling business as the rigs are currently under-utilised while it is also looking for partners.
Its president and group CEO Tan Sri Shahril Shamsuddin said Sapura Energy was in talks with few parties to partner up for its drilling arm.
“But the price must be right and it would open up to to new market and increase our competitiveness,” he told reporters after the group’s EGM on Thursday.
Sapura Energy’s drilling arm is one of the group’s core business along with exploration and production (E&P) and engineering and construction (E&C).
Shahril said Sapura Energy owns 16 drilling assets comprises eight semi-tender rigs and eight tender assist rigs.
“They are relatively young assets with life span of between 15 and 20 years,” he said, adding the current utilisation rate was 35%.
Currently, Sapura Energy is in the midst of completing the sale of its 50% stake in its E&P business, Sapura Upstream Sdn Bhd, to Austria’s OMV Aktiengesellschaft.
Earlier in November, Sapura Energy inked a share subscription agreement and shareholders’ agreement with OMV AG to establish joint venture (JV) company, Sapura OMV Upstream.
Under the agreement, Sapura Energy shall receive a total of US$975mil in proceeds, comprising OMV’s subscription payment for newly issued shares in the JV company of US$540mil, an additional consideration of up to US$85mil, as well as the repayment from refinancing of intercompany debts of US$350mil.
At the EGM, shareholders of Sapura had agreed to the firm’s RM4bil cash call.
“The EGM was very smooth,” Shahril said, pointing out this was because of the solid backing from the institutional funds for the corporate exercises.
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