PETALING JAYA: Oil and gas services outfit Coastal Contracts Bhd
’s outlook is expected to improve with a pending contract extension of the company’s jack-up gas compression service unit (JUGCSU) as well as the planned expansion of the Papan gas processing plant in Mexico by Petróleos Mexicanos (Pemex).
TA Research, in a report following an analyst briefing with Coastal Contract’s management, said plans by Pemex to expand the plant is expected to be finalised by early 2025 while the Perdiz gas processing plant would also undergo modifications to include liquefied petroleum gas recovery capabilities.
“The gas processing volume at both Perdiz and Papan plants continue to ramp up as planned and have currently reached their maximum processing capacity,” the research house said in a recent report on Coastal.
The Papan plant has reached its maximum processing capacity of 345 million standard cubic feet per day (mmscfd) while the Perdiz plant’s daily average has risen to a maximum processing capacity of 185mmscfd.
The research house also revised lower the utilisation rate forecast for the TC7 liftboat to 80% from 83% after the company said a five-year special periodic survey took slightly longer than expected.
TA Research upgraded Coastal to a “buy” rating from “hold” with a slightly higher target price of RM1.89 a share from RM1.88 previously based on a sum-of-parts valuation.
The research house also raised the company’s earnings forecasts for the financial years ending Dec 31, 2024 (FY24), FY25 and FY26 by 0.1%, 5.6% and 7.3%, respectively.
