By Sharen Kaur
sharen@mediaprima.com.my
Published in NST on June 22, 2013
sharen@mediaprima.com.my
Published in NST on June 22, 2013
ON TRACK TO PROFIT: Company banking on oil and gas field in Kazakhstan
Sumatec Resources Bhd should be debt-free by August and achieve its RM1 billion revenue target within three years, says its major shareholder Tan Sri Halim Saad.
The company is banking on its Rakushechnoye oil and gas field in Mangystau, Kazakhstan, to put it on a solid profit path.
It has a Joint Investment Agreement with Markmore Energy (Labuan) Ltd and CaspiOilGas LLP for the commercial development and production of the Rakushechnoye field.
Markmore Energy and CaspiOilGas, the company that holds the concession for the field up to 2025, are controlled by Halim.
Sumatec will be investing US$95 million (RM304 million) initially to develop the field, starting on October 1.
It expects to recoup the investment after production hits two million barrels of oil by the third quarter of 2015, Halim said after the company’s extraordinary general meeting (EGM) here yesterday.
The company is projecting a net profit of RM86 million this year and RM69 million in fiscal year 2014. Net profit will be lower next year as it makes more investments.
Halim, who owns 25 per cent of Sumatec, said the next step for the company, following the completion of its restructuring exercise, is to grow its assets and income base.
With the restructuring, Sumatec will transform from an exploration service provider and shipping company into an exploration and production operator.
It is also raising RM452 milion in cash and through a new share and rights issue to pay of debt and for use as working capital.
The company’s shareholders yesterday approved all the resolutions tabled at the EGM.
Sumatec, which expects to exit Practice Note 17 status by mid-2014, will focus on acquiring mature oil and gas assets in Kazakhstan, Halim said.
“Malaysia is all offshore when it comes to oil and gas. In Kazakhstan, there is much lower capital and operating expenditure while earnings are higher.
“The net profit margin for a barrel of oil in Kazakhstan is around US$40 while in Malaysia, it’s about three to four times less,” he added.
Halim, who does not want to be dubbed a white knight, said he bought into Sumatec because of its potential upside.
“This is a good vehicle to expand in the sector.
The company has been involved in O&G (oil and gas) and shipping. They have also done constructionin O&G,” he said.
Sumatec Resources Bhd should be debt-free by August and achieve its RM1 billion revenue target within three years, says its major shareholder Tan Sri Halim Saad.
The company is banking on its Rakushechnoye oil and gas field in Mangystau, Kazakhstan, to put it on a solid profit path.
It has a Joint Investment Agreement with Markmore Energy (Labuan) Ltd and CaspiOilGas LLP for the commercial development and production of the Rakushechnoye field.
Markmore Energy and CaspiOilGas, the company that holds the concession for the field up to 2025, are controlled by Halim.
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It expects to recoup the investment after production hits two million barrels of oil by the third quarter of 2015, Halim said after the company’s extraordinary general meeting (EGM) here yesterday.
The company is projecting a net profit of RM86 million this year and RM69 million in fiscal year 2014. Net profit will be lower next year as it makes more investments.
Halim, who owns 25 per cent of Sumatec, said the next step for the company, following the completion of its restructuring exercise, is to grow its assets and income base.
With the restructuring, Sumatec will transform from an exploration service provider and shipping company into an exploration and production operator.
It is also raising RM452 milion in cash and through a new share and rights issue to pay of debt and for use as working capital.
The company’s shareholders yesterday approved all the resolutions tabled at the EGM.
Sumatec, which expects to exit Practice Note 17 status by mid-2014, will focus on acquiring mature oil and gas assets in Kazakhstan, Halim said.
“Malaysia is all offshore when it comes to oil and gas. In Kazakhstan, there is much lower capital and operating expenditure while earnings are higher.
“The net profit margin for a barrel of oil in Kazakhstan is around US$40 while in Malaysia, it’s about three to four times less,” he added.
Halim, who does not want to be dubbed a white knight, said he bought into Sumatec because of its potential upside.
“This is a good vehicle to expand in the sector.
The company has been involved in O&G (oil and gas) and shipping. They have also done constructionin O&G,” he said.
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