Scomi Energy Services bags RM195m contract

by **Cals** Thu 13 Feb 2014, 08:38

Posted on 13 February 2014 - 05:36am

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PETALING JAYA (Feb 13, 2014): Scomi Energy Services Bhd has secured a contract worth RM195 million from PTTEP Siam Ltd and PTTEP International Ltd.

In a statement yesterday, it said the three-year contract is for the provision of drilling fluids services for an onshore drilling campaign in Thailand.

Its CEO Shah Hakim Zain said the job represents the company's largest oilfield services contract held in Thailand currently.

With this award, he said Scomi Energy Services' current order book in Thailand stands at RM260 million. With a healthy pipeline of tenders being pursued, he said the company's growth prospects remain bright.

"Scomi Energy Services' growth progress is on the right track as we strengthen our presence in the Asian oil and gas sector. We are glad to have received PTTEP's vote of confidence in our products and services especially for the Thai market. Besides Thailand, we are also currently providing similar services to the PTTEP group of companies in Australia and Myanmar," he said.

Scomi Energy Services recently announced contract wins in Myanmar for Petronas and in Indonesia for Virginia Indonesia Company with a combined value of RM165 million. Hence, the total value of Scomi Energy Services contract wins announced in 2014 has breached the RM360 million mark.

In a research note, Hong Leong Investment Bank, which maintained a "buy" call on Scomi Energy Services with a target price of RM1.02, said it is positive on the award as this is the third contract wins in two months, bringing total contracts won to more than RM360 million year-to-date.

"The company is also involved in the bidding for the 3rd round of risk sharing contract (RSC). We gather from management that the prospects look promising. We conservatively do not include the potential award in our forecasts," the bank said.

The bank expects the upcoming 3Q FY14 results to be in line with its forecast albeit some margin pressure due to ramp up in initial cost for new projects. It said margin should rebound from 4Q FY14 onwards.

It said drilling fluid and waste management should continue to register strong result, but partly offset by sluggish coal business.