SapKen unit makes another major discovery

Jun 01, 2016 12:00 AM

SapuraKencana Petroleum Bhd’s wholly-owned subsidiary, SapuraKencana Energy Sarawak Inc (SKE) has made another significant gas discovery from its three-well 2015 drilling campaign within the Block SK408 production sharing contract area, offshore Malaysia.

The wells were targeted non-associated gas within the primary target Late Miocene Carbonate reservoirs, according to SapuraKencana in a filing with the stock exchange.

“The first well, Jerun-1 is a significant discovery located 5km north of the 2014 Bakong gas discovery. Based on analysis of electric log, pressure and sample data Jerun-1 has an interpreted gross gas column of approximately 800m in the primary target reservoir and is a multi-TCF gas discovery,”

“Jeremin-1, located approximately 15km west of the F9 gas field encountered a 104m gross gas column. Putat-1, located approximately 20km north of the Cili Padi gas field is confirmed as a dry hole. All wells have been safely plugged and abandoned,” said SapuraKencana.

The two wells, Jerun-1 and Jeremin-1, are close to the existing infrastructure supplying gas to one of the world’s largest liquefied natural gas facilities at Bintulu, Sarawak.

SKE is the exploration operator with a 40% working interest with partners Petronas Carigali Sdn Bhd and Sarawak Shell Bhd each holding a 30% stake.

SapuraKencana closed unchanged at RM1.60 on volume of 32.79 million shares.

Year-to-date, the counter lost about 20.79% at yesterday’s closing price.

Of the 21 analysts polled by Bloomberg, nine have a “buy” recommendation, while seven have a “hold” call and five have called a “sell” on the company’s stock.

The company’s 12-month median target price is RM1.94, which represents about 21.25% upside from the last traded price.

SapuraKencana’s total order book as at end-FY2016 stood at RM21.3bil, of which some RM6.5bil is expected to be realised in FY2017.

For the fourth quarter to Jan 31, 2016, SapKen recorded a net loss of RM1.28bil compared with a net profit of RM129.1mil a year ago mainly due to provisions on impairment of its assets in a weak oil-price environment.

The revenue for the quarter under review stood at RM2.23bil as compared with RM2.39bil in the corresponding quarter last year.

The company recognised provision for impairment on property, plant and equipment and oil and gas properties amounting to RM1.14bil for the quarter.

For the full year, SapuraKencana’s net loss was at RM791.56mil from a previous net profit of RM1.43bil.

Revenue increased to RM10.18mil from RM9.94bil previously.

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