KUALA LUMPUR: The newly listed UMW Oil & Gas Corp Bhd (UMW OG) is expecting contributions from abroad to be higher, as its drilling rig Naga 3 has secured a charter contract to commence operation in Vietnam.
With that, UMW-OG president Rohaizad Darus said overseas operation would generate 40% of the company’s revenue in the coming year compared with 30% as at June this year.
“We hope to achieve this as early as the second quarter of next year,” Rohaizad told the media after the listing ceremony last Friday.
According to Rohaizad, drilling rig Naga 3 would be moved to Vietnam next April and this would contribute to revenue from its overseas drilling business.
Naga 3 has been operating in Malaysian waters since March 2011. This contract had been extended in 2012 for an additional two years. In August 2013, Naga 3 was issued with a letter of award of operations in Vietnam, which will commence in 2014.
“This is part of our long-term programme. First is to develop our international market and [second] to diversify our revenue base,” said the company’s president.
The oil and gas company, in which UMW Holdings Bhd holds a 55.15% stake, will be focusing on the Asean market for the next two to three years before going beyond the Asia-Pacific.
“We have our plans to venture further beyond that but there are enough opportunities in the next two to three years within Asean 10 and Asia-Pacific,” said Rohaizad.
Currently, UMW OG has operations in Malaysia, Thailand, Vietnam, China and Turkmenistan, providing drilling and oilfield services for the upstream sector of the oil and gas industry.
UMW OG has around eight to 12 existing contracts, for drilling and workover services, that are due to expire at the end of this year, according to Rohaizad. Nonetheless, some of the contracts have been renewed.
The company at present has four drilling rigs in its fleet that are deployed at several offshore locations; Naga 1 and 4 offshore Malaysia and Naga 3 joining Naga 2 offshore Vietnam in the first half of 2014.
The company also entered into an agreement to acquire another drilling rig, the Naga 5, which is expected for delivery in May 2014. However, it has yet to secure a charter contract for the fifth rig.
The RM1 billion proceeds from the IPO are designated for expansion of its assets. However, Rohaizad said the company has to be prudent in its spending, looking at its plans for the long term before adding more rigs into its fleet.
The company made a strong debut on Bursa Malaysia. The stock surged to a day’s high of RM3.18. It closed at RM3.10, a premium of 30 sen, or 10.7% to its IPO retail price of RM2.80 with 221.4 million shares changed hands.
The IPO was oversubscribed 55 times for its institutional investor portion and 10.7 times for the retail portion.
This article first appeared in The Edge Financial Daily, on November 4, 2013.