Hot Stock Sumatec rises 5% ahead of Rakuschechnoe O&G field update

Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com
Tuesday, 10 December 2013 12:53
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KUALA LUMPUR (Dec 10): Sumatec Resources Bhd rose as much as 5%, in
anticipation of positive development arising from an update at 2.30 pm by the
downstream oil & gas (O&G) player on the Rakuschechnoe O&G field.
At midday break, the firm linked to former prominent corporate figure Tan Sri
Halim Saad rose 1.5 sen or 5% to trade at 30 sen. The most active counter saw
heavy trades of some 88 million shares.
Rising in tandem was its warrant, which rose 1 sen or 4% to 23.5 sen. The
fourth most active counter saw heavy trades of some 23 million units.
According to senior remisier Goh Kay Chong, the active trades of Sumatec’s
shares is in response to an announcement for a special press briefing -- an
update on progress in the Rakuschechnoe O&G field.
“The market is responding to the announcement,” he said over the telephone.
Meanwhile, Goh’s sentiment is also echoed by another remisier, who noted that Sumatec is retailers’ speculative stock.
"The heavy trades seen in the counter could also be due to the firm’s recent completion of the proposed rights issue with warrants and its
regularisation plan to exit PN17," said the remisier.
Last week, Sumatec announced it is expected to start work on the Rakuschechnoe O&G field by mid-January next year to commence
workover operations on 11 wells. It said the Rakuschechnoe O&G field operation agreement with CaspiOilGas LLP (COG) has become
effective.
The joint investment agreement (JIA) on the oilfield was signed with Markmore Energy (Labuan) Ltd in April last year, which fully owns
COG.
Under the JIA, it stipulated Sumatec should carry out all operations related to the production of hydrocarbon from the oil field and complete
all operations from the date of JIA until Aug 25, 2025.
Sumatec also intends to uplift itself from PN17 status via a regularisation plan that includes a par value reduction of the existing issued
and paid-up shares, assets disposal and diversification of operations.
Last month, Sumatec reported that its net losses narrowed to RM6.1 million in the third quarter ended Sept 30, 2013, compared to RM11.3
million a year ago.