KUALA LUMPUR: Despite desire of change in oil costs in 2017, Hong Leong Investment Bank (HLIB) Research does not envision a solid recuperation in apparatus tallies.
"We opine that a couple overhangs should be cleared Organization of the Petroleum Exporting Countries (OPEC's) choice underway stop, rising oil creation in Russia, and shorter than normal speculation cycle of US shale oil penetrating," HLIB said in a report.
The exploration house said its study had demonstrated that oil value unpredictability was in reality a superior gage for anticipating rig number levels.
It noticed that the pattern was clear in 2009-2011 periods whereby oil costs were rising however with instability yet fix checks were all the while slowing down. Rig include just enhanced 2011-2014 day and age where oil costs balanced out above US$100 per barrel levels.
"Rig tally in Malaysia dropped to as low as four in 2016 contrasted with 6-10 rigs range seen in 2015, a dreary domain to be worked in for nearby apparatus players.
"The apparatus check appears to slack the oil value pattern in view of our perceptions potentially because of apparatus retirement slack and basic leadership slack by the oil makers," HLIB said.
It noticed that day by day sanction rate (DCR)for high-spec lift rigs had dove to US$70,000-90,000/day from US$130,000-150,000/day in the midst of serious industry downturn.
"We don't envision the rates to recuperate to their past highs in any event for 2017 supported by two noteworthy contentions oil costs are not anticipated that would recoup to US$70 per barrel level and past soon, making oil makers to keep their costs low regardless of recuperation in industry action, and supply shade of 177 apparatuses still under different development stages in the yards which should be ingested," HLIB said.
Aside from industry major issues, the neighborhood rig showcase likewise confronts basic financing issue.
"Two noteworthy apparatus players, in particular Perisai and UMW Oil and Gas, have an aggregate fleeting financing hole of near around RM1bil in light of our figurings.
"Obligation renegotiating is dependably the principal decision however we opine that it is hard to acquire in this environment because of low bank longing to give credit to O&G organizations," HLIB said, including that the organizations may turn to value gathering pledges if all else fails to connect their financing crevice.
"This would be dilutive for their shareholders with Perisai to confront bigger dilutive effect as 3.9 billion new shares should be issued in light of last exchanged value contrasted with 461.2 million shares for UMWOG. This could send a negative sign to the business sector yet the likelihood of this answer for be utilized is still there as we would see it," it said.
HLIB has looked after "unbiased" position on the segment. It looks after its "offer" on UMWOG (TP: 69 sen) and stop scope on Perisai (because of its high liquidity hazard in the midst of troublesome working environment).
For More Updates :- Klse Investment Picks | KLSE Trading Signals | Klse Stock Signals | Klse Stock Tips | Klse Stock Picks | Klse InvestmentTips | KLSE Stock Recommendation | Fkli Trading Strategy
No comments:
Post a Comment