KUCHING: SapuraKencana Petroleum Bhd’s (SapuraKencana) substantial gas discoveries recently at block SK408 approximately 120 kilometres offshore Sarawak has raised analysts expectations about the company’s prospects.
Analysts are generally optimistic about the oil and gas company’s latest development.
AllianceDBS Research Sdn Bhd (AllianceDBS Research) in a report said the discovery would provide long term earnings visibility from SapuraKencana’s oil and gas upstream assets.
Although the research firm noted that any earnings accretion from the gas discovery will be recognised in the future, the development is positive to the oil and gas company.
At the same time, AllianceDBS Research expects SapuraKencana to secure more jobs for its transport and installation (T&I) division. The research firm noted that SapuraKencana’s T&I division has clinched several contracts worth a total of US$124 million or approximately RM398 million earlier this year.
Additionally, AllianceDBS Research also believed that the company will be able to raise its outstanding orderbook, which currently stood at RM25 billion.
Apart from that, RHB Research Institute Sdn Bhd (RHB Research) in a report said the latest gas discovery could boost the company’s total gas initial-in-place (GIIP) close to two to three trillion cublic feet of gas. The research firm noted that the new gas discovery at Block SK408 could amount to 1 to 1.5 trillion cubic feet of gas.
RHB Research observed that together with the company’s other gas exploratory wells from four SK408 exploratory wells made in June, the company could achieve a target of a total of more than two trillion cubic feet of GIIP.
Furthermore, AmResearch Sdn Bhd (AmResearch) in a report said the increasing visibility of the company’s pipeline of potential new contracts in offshore construction and SapuraKencana’s fresh tenders of RM30 billion has supported the group’s strong earnings outlook.
Therefore, analysts are upbeat about the company’s future earnings underpinned by the company’s ongoing contracts jobs and potential future contract win to boost its financial performance.