The making of Sapura Kencana Petroleum

The creation of an oil and gas giant hasbegun. SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd will be going through an RM11.85bil merger exercise to create the largest oil service provider by assets in the country - soon to be known as Sapura Kencana Petroleum Bhd.

For now, under a cash and share swap deal, a special purpose vehicle called Integral Key Sdn Bhd would be buying all the assets and liabilities of SapuraCrest for RM5.87bil and Kencana for RM5.98bil.

This shall be satisfied by some five billion Integral Key shares priced at RM2, and RM1.84bil in cash.

Integral Key has offered to acquire the SapuraCrest business for RM5.87bil equivalent to RM4.60 per share. It will acquire Kencana's business for RM5.98bil equivalent to RM3 per share.

At RM2, Integral Key's implied price earnings (PE) is approximately 20 times. The historical PE multiple of Kencana and SapuraCrest are 28.04 times and 25.41 times respectively.

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SapuraCrest Kencana eyes lucrative overseas deals

The upcoming merged entity is bidding for multi-billion ringgit worth of oil and gas jobs stretching from Malaysia to Brazil.

SapuraCrest Kencana Petroleum Bhd, the upcoming merged entity between Malaysia’s two largest oil and gas (O&G) players, is eyeing more international projects, especially in Australia and Brazil, to boost its already fat order book of RM13 billion.

SapuraCrest Petroleum Bhd executive vicechairman and president, Datuk Seri Shahril Shamsuddin, said the company and Kencana Petroleum Bhd were bidding for multi-billion ringgit worth of O&G jobs stretching from Malaysia to Brazil.

“There is a lot of work coming out of Australia and Brazil is also another country that you can’t ignore. India is also heating up with new investments in oilfields.

“In the longer term, we will look at the Gulf of Mexico. As a merged entity, we can take on more jobs and bid for larger projects,” Shahril said in an interview with Business Times yesterday.

Also present was Kencana Petroleum Bhd’schief executive officer Datuk Mokhzani Mahathir.

SapuraCrest last month won a US$1.4 billion (RM4.4 billion) contract from Petroleo Brasileiro SA (Petrobras), Latin America’s largest company, to charter and operate three units of pipe-laying support vessels.

Kencana, on the other hand, announced yesterday that it won a RM1 billion contract to help build a liquefied natural gas processing facility in Australia, awarded by United States-based Bechtel International Inc.

Shahril said SapuraCrest Kencana, which will be the world’s fourth largest O&G service provider by market capitalisation upon merging, aimed to grow its revenue by 15 to 20 per cent per annum.

“Currently, our combined revenue is between RM5 billion and RM5.5 billion a year and we are confident to increase that year-onyear,” Shahril said.

On whether the new merged entity will embark on an acquisition trail, Shahril said if there were companies that could help mitigate risk or enable SapuraCrest Kencana to do projects at low cost, it would consider the options available.

The acquisitions may include buying engineering firms or those involved in specialised areas.

SapuraCrest and Kencana are merging in a deal worth RM11.85 billion to create the largest O&G service provider by asset in the country.

Under their cash and share swap deal, special purpose vehicle Integral Key Sdn Bhd will buy all the assets and liabilities of SapuraCrest for RM5.87 billion and Kencana for RM5.98 billion.

The companies are obtaining shareholders' approval at their respective extraordinary meetings on December 14 and December 15.

The exercise is scheduled to be completed by first quarter 2012.

Read more: SapuraCrest Kencana eyes lucrative overseas deals

SapuraCrest wins RM4.37 billion Petrobras job

PETALING JAYA (Nov 1, 2011): SapuraCrest Petroleum Bhd has won a US$1.4 billion (RM4.37 billion) contract from Petróleo Brasileiro S.A. (Petrobras) to build, charter and operate three deepwater flexible pipe-lay support vessels (PLSV) for the Brazilian national oil company.
"This contract is a significant milestone as it marks our entry into the vast, dynamic yet technologically challenging oil and gas market in Brazil,'' executive vice-chairman and president Datuk Seri Shahril Shamsuddin said in a press statement today.
Under the award, SapuraCrest's wholly-owned unit TL Offshore Sdn Bhd (TLO) is to construct and charter the three PLSVs to Petrobras.
"Revenue from the award is expected to be generated by the fourth quarter of 2014,'' SapuraCrest said in a separate statement to Bursa Malaysia.

"The award will have no effect on the issued and paid-up share capital of the company and is expected to contribute positively to the group's net assets and earnings for the financial year ending Jan 31, 2015 and beyond,'' it added.

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O&G counters advance ahead of Friday announcement of downstream project

PETALING JAYA: Oil and gas (O&G) stocks rose yesterday on the local bourse as several O&G service providers are expected to benefit from a multi-billion ringgit downstream project to be announced on Friday by the Government, and the gains in these stocks were also in line with the rise seen on the broader market.
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Dialog Group Bhd, which was up 14 sen to RM2.70 with a turnover of 13.4 million shares yesterday, stands to gain from the RAPID project as it gives better visibility to its proposed RM5bil independent deepwater petroleum terminal in Pengerang.

“Besides the tank terminal project, Dialog has the edge in providing engineering, procurement and construction (EPC) operations as well as specialist services and plant maintenance activities for this new complex given the proximity of its existing tank terminal project.

Read it in The Star

Dialog climbs to fresh highs, investors upbeat on prospects

KUALA LUMPUR: Shares of DIALOG GROUP BHD [] climbed to fresh highs of RM2.73 in late afternoon trade on Thursday, May 12 as investors were upbeat about its prospects.

At 4pm, Dialog was up three sen to Rm2.73 with 12.71 million shares done.

The FBM KLCI fell 1.88 points to 1,534.15. Turnover was 696.86 million shares valued at RM956.51 million. There were 250 gainers versus 447 losers and 279 stocks unchanged.

Petroliam Nasional Bhd is reported to be investing up to RM50 billion in new integrated downstream project to expand its business and further spur the growth of Malaysia’s oil and gas downstream sector.

The signing ceremony is expected to be done on Friday.

Then project would likely be the independent deepwater petroleum terminal project at Pengerang, Johor which is jointly undertaken by Dialog and Vopak.

Dialog and Vopak’s combined investment in the terminal would be RM5 billion and over a seven year period. Dialog’s investment would be RM2.5b of which 30% would be from equity and 70% from project financing.

Dialog and Vopak are the core facilitators for the project, which is viewed as an entry point project (EPP) under the government’s Economic Transformation Policy (ETP).

There are tremendous spinoffs opportunities from the Pengarang project and attract combined investments of another RM95 billion.

Read it in The Edge

SapuraCrest 4Q net profit surges 79% to RM72.67m, proposes 5.5c final dividend

Revenue rose 26% to RM609.95 million from RM484.48 million in 2010. Earnings per share was 5.69 sen, while net assets per share was 87 sen.

SapuraCrest proposed a single tier final dividend of 5.5 sen per share for the financial year ended Jan 31, 2011.

Read The Edge

SapCrest, Kencana and Petrofac in JV to develop Berantai

PETALING JAYA: Sapura Crest Petroleum (SapCrest), Kencana Petroleum and Petrofac Energy Developments, a unit of London-listed Petrofac, has entered into a joint venture (JV) to develop and operate the Berantai field located 150km offshore Terengganu.

A risk service contract was signed by Petronas and the operating parties to carry out the development and production of petroleum resources from the Berantai field while a joint operating agreement was also signed between the operating parties.

The contract would be for nine years commencing Jan 31, 2011 with first gas from the project expected by the end of Dec 2011.

Separate filings by SapCrest and Kencana to the stock exchange showed that both would have a 25% stake in the joint operating agreement with Petrofac owning the remainder stake.

Under the agreement, the operating parties would provide one well-head platform with 18 wells (expected to be completed by end-2012) together with related pipeline linking it to another existing platform and the provision of a floating production, storage and off-loading vessel (FPSO).

Additionally, the operating parties would also have the right to deploy works and services to the project while a second well-head platform would be installed in a subsequent phase.

The total development cost including for the subsequent phase, to be incurred collectively by the operating parties, was estimated at this juncture at approximately US$800 million excluding the provision of the FPSO.

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Marginal move, massive impact

Petronas will start developing 25 per cent of its marginal oil fields from this year

Petroliam Nasional Bhd (Petronas) plans to start rolling out contracts to develop marginal oil fields from this year, a move that will not just replenish oil reserves but also help local companies servicing the industry to grow further.

Malaysia has 106 marginal oil fields with some 580 million barrels of oil, Petronas chief executive officer Datuk Shamsul Azhar Abbas told reporters at a briefing in Kuala Lumpur yesterday.

Marginal fields are small oil fields with less than 30 million barrels of oil and are usually considered uneconomical to develop. But the current high oil price, at about US$87 (RM265) a barrel now in the US markets, makes it attractive for foreign firms with the technology and knowledge to explore such fields.

The marginal fields plans also come under the government's Economic Transformation Programme where incentives were announced to help Malaysia earn some RM50 billion from oil and gas over 20 years.

"We have created a lot of excitement. We are in talks with interested parties and some fields are going through the bidding process," Shamsul said.

This will include fields like Sepat and Berantai, both in offshore Terengganu.

Petronas will start by developing 25 per cent of its marginal fields and it will group five fields into a cluster to make it more attractive for bidders.

It is now finalising bids for its first two marginal field clusters and hopes to award contracts by April this year.

Petronas also expects to start producing oil and gas from marginal fields this year.

The main difference in how Petronas will develop the smaller fields is the risk service contract (RSC). Unlike the production sharing contract (PSC) introduced in 1976, Petronas will own all of the oil under an RSC.

Contractors who build the oil rigs and other facilities will be paid a fee based on their performance.

Under a PSC, oil giants like Shell would partner Petronas and they will also own a percentage of the oil.

But Petronas will not focus on major oil firms for marginal fields but rather woo development and production specialists like UK-based Petrofac, Houston-based Schlumberger and Sweden's Lundin Petroleum.

They will also have to partner local firms that must have at least 30 per cent equity stake. The foreign firms are free to choose their local partners but Petronas will not tolerate sleeping partners.

The knowledge on marginal fields will also be useful for Petronas to develop its own smaller fields overseas.

The new incentives for the oil and gas sector may spur the production of 1.7 billion barrels of oil over some 20 years. This is the oil that will come from marginal fields and existing fields that have matured. Petronas and its foreign partners will use enhanced oil recovery methods where they will extract more oil from old fields.

Read more: Marginal move, massive impact

SapuraCrest Petroleum: Buy, target price RM4.40

AMRESEARCH kept its "buy" call on SapuraCrest Petroleum Bhd (8575)after the firm won a fresh US$32 million (RM97.92 million) contract from Petroliam Nasional Bhd (Petronas) in Myanmar.

The stock is its top pick for the oil and gas sector for its attractive valuations, strong order book, re-acceleration of order book accretion and improving earnings delivery.

AmResearch estimated that SapuraCrest's latest contract will boost its earnings in the 2012 fiscal year by 2 per cent.

While this project will only add a slight 1 per cent to the group's outstanding gross order book of RM9 billion, AmResearch believes that this is just a foretaste of the pipeline of massive new orders given SapuraCrest's established capability in securing new jobs domestically and overseas.

"We maintain our view that SapuraCrest is a favourite to secure offshore installation jobs from Petronas' prolific capital expenditure rollout, potentially up to RM40 billion this year," it said in a report yesterday.

The stock closed at RM3.58 yesterday, which implies a potential upside of 23 per cent to AmResearch's target price.

Read more: SapuraCrest Petroleum: Buy, target price RM4.40

Petronas’ multi-billion ringgit job award likely by end of the month

PETALING JAYA: Petroliam Nasional Bhd (Petronas) is expected to award multi-billion ringgit contracts for the development of marginal oil fields by the end of this month to several consortia comprising local and foreign companies.

It is also believed that Petronas will unveil a new business model on the development of the marginal oil fields and possibly, more incentives for the industry.

“The local players will tie up with foreign oil and gas majors in a consortium where the former would have a minor role as it is something new to them. The locals need to learn,” said an industry source.

“Moreover, substantial financial resources are required. (But) This is an opportunity never presented to local companies. They have always been contractors; now they stand to become concession holders.”

The likely victors of the jobs to develop marginal oilfields will come from across the industry as it would involve “different segments of the industry's full value chain”.

“All legitimate players will have a strong role to play,” said the industry source.

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It is believed that Kencana Petroleum Bhd and SapuraCrest Petroleum Bhd may form an alliance together with a foreign oil and gas major.

SapuraCrest and Kencana have been busy raising capital to fund their expansion plans and are widely speculated to be one of the front runners.

“We are excited ... this would likely involve participation of several local service providers (with strong balance sheet, proven track record and execution abilities and overseas exposure).

“It could also involve strategic tie-ups with independent oil majors and prospecting of strategic assets (floating structures) to develop the marginal fields. If realised, we foresee a re-rating in valuations on the stocks involved in this area,” said Maybank IB Research.

Other potential beneficiaries, according to industry analysts, include Tanjung Offshore Bhd, Petra Energy Bhd, Malaysia Marine and Heavy Engineering Bhd and Perisai Petroleum Teknologi Bhd.

“This will provide more sustainable and predictable cashflow for companies rather than lumpy contracts which most of them are involved in right now,” said an analyst.

The announcement by Petronas is highly anticipated, not least because it marks a major shift in the industry for the first time, Petronas will open up the country's marginal fields to unconventional operators and that too, not just to foreign companies.

“Petronas is looking at different ways of doing business. The concern before has always been deliverability of projects by domestic companies.

“So, local companies have been urged to tie up with foreigners. This would be the second paradigm for the country's oil and gas sector,” said the source.

Enhanced oil recovery and marginal field development are part of the key thrusts under the Government's Economic Transformation Programme.

There are about 25 marginal fields that have been identified, of which 10 including Sepat, Cendor Phase 2 and Berantai are ready for development this year. The total production for these marginal fields are expected to reach 1.7 billion barrels of oil equivalent to a total investment of RM70bil to RM75bil.

“From this, we expect RM5bil to RM8bil worth of contracts to be rolled out in 2011,” said TA Research.

“The whole plan to develop harder-to-reach or marginal oil fields also has some major risks that need to be mitigated as it involves the country's assets. Malaysia can't afford to wrongly execute the plan,” said an observer.

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Petronas to announce specific incentives for O&G sector, says Idris Jala

Written by Daniel Kooo Tuesday, 16 November 2010 15:25

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) will be announcing more incentives for the oil & gas industries soon as the government sets the stage for the country to be a regional hub for oilfield service, says Minister in the Prime Minister’s Department Senator Datuk Seri Idris Jala.

“There are a lot of opportunities for local players to participate in this – be it in the form of CONSTRUCTION [] work, or providing related oil and gas services. All of this will come into play,” he said on Tuesday, Nov 16.

While Jala did not provide a timeframe, he said the incentives companies could expect were the renegotiation of certain contracts for renewal like for those production sharing contractors such as Shell and Exxonmobil.

He was speaking at the opening of Schlumberger Ltd’s financial hub in Kuala Lumpur which will provide employment for about 400 people by next year.

Jala, who is also the Performance Management & Delivery Unit chief executive officer, said that the nine Entry Point Projects under the ETP also targeted multinational companies to locate their global or regional headquarters in Greater Kuala Lumpur or Klang Valley.

Two rounds of Steering Committee meetings have already taken place and many initiatives are in various stages of progress towards attracting more MNCs to relocate their headquarters to Kuala Lumpur.

As for the Schlumberger Financial Hub, it is part of the government’s Entry Point Project to attract 100 multinational companies to set up their global or regional headquarters in Greater Kuala Lumpur or Klang Valley under the Economic Transformation Programme (ETP) recently announced by Prime Minister Datuk Seri Najib Razak.

Their financial hub will provide financial and accounting services to Schlumberger’s businesses in Asia Pacific, Middle East, European and African regions and 75% of its employees hired here will be Malaysians.

“Malaysia was the obvious choice for this new facility. The country offers highly qualified professionals with excellent customer service attitudes,” said Schlumberger’s chief financial officer Simon Ayat.

“Malaysia is open to attracting knowledge based activities, offers an excellent business environment with the government committed to the development of education as well as the country’s infrastructure,” Ayat added.

Schlumberger Limited, is a United States’ based oil and gas services company which had been present in Malaysia since 1935 and has offices for its other business chapters in Kemaman, Miri and Labuan.

Taken from here...

SapuraCrest: Buy, target price RM3.12

AMRESEARCH Sdn Bhd reiterated its "Buy" call on SapuraCrest Petroleum Bhd (8575)with an unchanged fair value of RM3.12 per share based on a 2010 forecast price earnings of 22 times.

The research house said the company remains the top pick in the oil and gas sector given its dominant position in Malaysia's pipe-laying/off shore installation services and tender rig market.

"SapuraCrest also has a huge order book of RM10 billion, the largest among locally listed stocks," it said.

However, including the full five-year Pan Malaysian pipe-laying contract, its gross order book is even larger at RM13 billion, with a sizeable oil and gas asset ownership.
At present, it has a substantial seadrill equity participation of 24 per cent and strong earnings forecasts from financial year 2009 to 2013 with a compound annual growth rate of 24 per cent.

"Hence, we maintain financial year 2011 forecast to financial year 2013 forecast earnings for now, which project annual earnings growth of up to 19 per cent, underpinned by the group's RM10 billion order book," it added.

AmResearch said the stock currently trades at an attractive 2010 forecast price earnings of 13 times, compared to over 25 times registered by SapuraCrest and Wah Seong back in 2007.

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CIMB Equities keeps Outperform on SapuraCrest

KUALA LUMPUR: CIMB Equities Research retains its Outperform on SapuraCrest and its top oil & gas pick after it announced its earnings.

It said on Thursday, March 25 SapuraCrest's 4QFY1/10 net profit of RM39 million took full-year bottomline to an all-time high of RM170 million (+47% Year-on-Year), 2% above its forecast and consensus estimate.

However, the company surprised with a final DPS of 4 sen, which took FY10 DPS to 7 sen, above our forecast of 6 sen.

“We maintain our earnings forecasts and target price of RM3.02 as we continue to value the stock at our target market P/E of 15x.

“The potential share price triggers are 1) strong 4Q10 results, 2) active order book replenishment, 3) success in new markets, and 4) a growing fleet of strategic assets,” it said.

SapuraCrest Petroleum (8575.KU) likely to post record net profit of MYR166 million

SapuraCrest Petroleum (8575.KU) likely to post record net profit of MYR166 million in FY10, +43% on-year, says CIMB Research analyst Norziana Mohd Inon; cites higher drilling charter rates, turnaround of SapuraAcergy JV as reasons for improved earnings. "The company's 4Q results are expected to meet expectations, with a net profit of at around MYR34 million (+29% on-year and down 36% on-quarter)," says Norziana. adds 1Q, 4Q typically weaker quarters for SapuraCrest due to the monsoon season. Company expected to announce 4Q results after 0900 GMT March 25. Stock last down 0.8% at MYR2.43. Keeps Outperform call with unchanged MYR3.02 target

SapuraCrest Petroleum Indian project secured!

SapuraCrest announced last week that their 40% owned associate company
Offshore International FZC (OIFZC) received an award from Larsen & Toubro
Limited to provide works and services for the transportation and installation of four platform jackets in Mumbai High North Field. Work is to commence in November 2010 lasting till January 201I with contract worth c.USD75m (c.RM225m @ RM3.4:USD1).

-LTS3000 likely candidate to perform works , given that the barge is co -
owned by both parties via OIFZ. Scheduled for delivery by Q1FY10,
expectations are for the barge to be utilised for the RM3b Petronas
Umbrella project, but bearing in mind the Malaysian monsoon season, the
barge will be free to work other waters in Q4 and Q1, in line with the period they have announced (November 2010- January 2011).

-Project value small, but underlying potential remains immense .
Assuming net margins of 5%, the project will contribute about RM5m to
associate earnings (40% of RM12.8m). Although nothing to shout about, it
does signify Sapuracrest’s increasing exposure to the Indian market and its
continual aspirations of 40%-50% of foreign revenue contribution in the
next 3 years. They await another pipe-lay barge, also co-owned with another
Indian party (Quippo Prakash MDL) which will avail Sapuracrest to more
prospects in Indian market. We leave our esti mates unchanged as the contract value is minimal.

-Maintain forecast and BUY at unchanged target price of RM3.06
based on FY11EPS of 17sen and PER of 18x. We continue to like the
group’s “cream of the crop” order book (estimated to be worth more than
RM7b (excluding SapuraAcergy’s 50% share of the order book)), their vast
international presence (India, Australia, Japan) and strategic assets. While sustained drilling charter rates will provide a base for higher earnings going forward, the heightened oil and gas sector prospects and improve contract flows in 2010 will provide additional rerating catalyst.

More here...

SapuraCrest unit bags US$75b India job

SapuraCrest Petroleum Bhd's 40 per cent-owned unit, Offshore International FZC (OIF) has been awarded a sub-contract worth US$75 million (US$1.00 = RM3.39) by Larsen & Toubro Ltd (L&T).

In a statement today, the company said the sub-contract was for the transportation and installation of four platform jackets for Oil and Natural Gas Corporation Ltd (ONGC) in MHN Field, offshore Mumbai.

"It is part of the main engineering, procurement, installation and commissioning (EPIC) contract which L&T had won from ONGC," SapuraCrest said.

The statement was released after the sub-contract signing ceremony witnessed by Prime Minister Datuk Seri Najib Tun Razak, who is on a four-day working visit to India.



SapuraCrest Executive Vice-Chairman Datuk Shahril Shamsuddin said OIF expected to start the offshore work around mid-November this year using a 160-metre derrick lay vessel called LTS3000.

Its oil and gas ventures in Southeast Asia, Australia, Japan and Russia as well as in India have so far netted contracts worth over US$500 million.

"The latest job will swell our orders in India alone to US$250 million over the past 10 years," he said, adding that it had spent about US$110 million in the country.

Shahril said the venture in India particularly was primed for high growth as it was embarking on joint ventures with local parties there, as part of the company's regionalisation strategy.

"We are upbeat on India. Its oil and gas industry is poised to grow further as regional demand for energy soars, with crude oil and gas output expected to increase.

"The deepwater exploration activities in India and neighbouring countries are also expected to heighten driven by higher oil prices," he said.

Shahril said the company would leverage on the alliance with L&T particularly to leapfrog its presence into the lucrative Middle East market.

He said the catalysts moving forward would be the further deployment of LTS 3000, Sapura 3000 and Quippo Prakash, the 2,000-tonne barge co-owned with Quippo Prakash Marine.

The latter vessel is due for delivery next month.
SapuraCrest started its foray in India in 2001 by providing soil investigation and hydrographic survey services off the country's shores. -- BERNAMA

SapuraCrest expands investment in India

SapuraCrest Petroleum Bhd (8575) is poised to seal a multi-million dollar contract in Chennai with an Indian partner today.

It is learnt that the deal is related to the use of SapuraCrest's new derrick lay vessel for an oil and gas major.

The latest job will swell SapuraCrest's orders in India, which amount to US$200 million (RM674 million) over the past few years.

The signing ceremony of the contract is due to be witnessed by Prime Minister Datuk Seri Najib Tun Razak, who is on his final leg of a five-day working visit to India.

Meanwhile, SapuraCrest said in a statement that it had for the past 10 years invested US$110 million (RM370 million) in the Indian oil and gas sector.
The investment comes in the form of building two derrick lay barges, the LTS3000 and QP2000. The vessels are expected to start operating in the first quarter of 2010.

SapuraCrest now has joint ventures with two local firms there, Larsen & Toubro Ltd (L&T) and Quippo Prakash Pte Ltd.

"Our venture in India is important to us because we consider India as a major international market for our future," SapuraCrest executive vice chairman Datuk Shahril Shamsuddin said in the statement released in Kuala Lumpur yesterday.

He said India has recently embarked on major oil and gas exploration and development projects to reduce dependence on foreign oil. This creates a major opportunity for companies in the oil and gas services sector.

"Tapping onto this opportunity is in line with SapuraCrest's main objective of expanding its operations beyond Malaysian shores and becoming a global oil and gas services provider," he added.

To date, SapuraCrest provides services such as offshore facilities maintenance and upgrading, and soil investigation and survey works in India.

Its major clients there include Oil and Natural Gas Corp, Reliance, Shipping Corp of India and Cairns Energy.

Shahril said the Indian operation will ensure higher utilisation of SapuraCrest's marine assets, which otherwise would be idle during the monsoon season in Southeast Asia.

The monsoon season in India is opposite to that of Southeast Asia.

He also said India will lead SapuraCrest to more lucrative markets, especially the Middle East.

ECM Libra Upbeat On Sapuracrest Petroleum's Prospects

ECM Libra Upbeat On Sapuracrest Petroleum's Prospects

KUALA LUMPUR, Jan 14 (Bernama) -- SapuraCrest Petroleum Bhd is on an improving trend, especially with the Sapura 3,000 now turning in profit and better earning visibility for the installation of pipelines and facilities (IPF) segment, according to ECM Libra Investment Research.

The Sapura 3000 is essentially a pipe-laying vessel with the capability to go into deep and shallow water.

The orderbook for the IPF segment, which bolstered with the production sharing contractors (PSC) umbrella job, stood at RM10.8 billion, ECM Libra said in a statement on Thursday.

"The PSC job could essentially be worth up to RM7 billion and RM8 billion if the contract is fully extended for five years, hence earnings visibility for the IPF segment," it said.

The only negative with SapuraCrest's will be the marine segment which during third quarter for financial year 2010 reported a loss of RM21 million due to severe vessel under-utilisation, ECM Libra said.

SapuraCrest's management indicated that the segment would continue to see trying times for at least another two to three quarters, the research house said.

"We are projecting more losses into financial year 2011 and only recovery of earnings in financial year 2012," ECM Libra said.

At 3.10pm today, the SapuraCrest shares traded at RM2.47 each.

-- BERNAMA