KUCHING: Petra Energy Bhd’s (Petra Energy) quarterly financial results could see further improvements ahead.
Affin Hwang Investment Bank Bhd (Affin Hwang) in a report yesterday said it expects the oil and gas (O&G) company to register stronger earnings in the coming quarters supported by higher level of work activity under Petroliam Nasional Bhd’s (Petronas) hook-up commissioning and topside major maintenance contract and the Gumusut-Kakap topside maintenance contract.
On another note, the research firm observed that Petra Energy’s development of the Kapal, Banang and Meranti (KBM) cluster fields was a success with the fields producing around 15,000 barrels of oil per day.
Petra Energy had in 2012 subscribed for a 30 per cent equity interest in Coastal Energy KBM Sdn Bhd (Coastal Energy) which was then awarded the KBM risk service contract to develop the KBM cluster fields with a budget of US$320 million.
Affin Hwang said Petra Energy will be able to recognise earnings from the KBM risk service contract in 2016 while the company is progressively recouping the development capital expenditure.
In view of the steady progress of the KBM cluster fields development and potential better earnings ahead, Affin Hwang raised Petra Energy’s share price fair value to RM1.50 per share.
Nonetheless, the research firm said the weak overall O&G operating environment as a result of lower capital expenditure and possible near-term weakness in global oil prices will likely limit the upside movement of Petra Energy’s share price.
Meanwhile, Petra Energy posted higher revenue and earnings in the first quarter of 2015 (1Q15).
The company in a filing to Bursa Malaysia last month said net profit jumped by 87 per cent year-on-year (y-o-y) to RM2.08 million.
At the same time, Petra Energy revealed that revenue in 1Q15 improved by 2.1 per cent to RM119.07 million.