Bloomberg Updated: New York, Jan 03 10:58 London, Jan 03 15:58 Tokyo, Jan 04 00:58
COMMODITY FUTURES Oil VALUE 79.36 CHANGE% 0.08 CHANGE 0.10
tradersgx ( Date: 07-Dec-2009 01:11) Posted:
Oil and Gas Sector: To continue to outperform in 2010, Ezra FV $2.40, SembCorp Marine [BUY, FV: S$4.16], Keppel Corporation [BUY, S$9.70].
OCBC - By Low Pei Han Friday, 04.12.2009
The oil and gas sector was the best performing sector in 2009, appreciating by 141% compared to the STI’s 53% rise. Stepping into 2010, we see companies with expertise in deepwater production faring better
than those limited to shallow waters. Keppel Corporation and SembCorp Marine are likely to see greater demand for semi-submersibles and drillships from customers, though there will still be demand for jack-ups.
Ezra Holdings is likely to remain a favourite with its growing subsea production segment, barring unforeseen circumstances. The outlook for the supply vessel segment is dimmer than the construction vessel
segment, given a possible oversupply situation for the former with many deliveries of newbuilds this year and next year. However we do note some deliveries may slip. We continue to be OVERWEIGHT on the oil
and gas sector though we point out that different stages of the value chain and their sub-segments experience different demand and supply dynamics. As such, we have picked Ezra Holdings [BUY, FV: S$2.40],
SembCorp Marine [BUY, FV: S$4.16], and Keppel Corporation [BUY, FV:S$9.70] as likely beneficiaries based on underlying trends.
Best-performing sector in 2009. The oil and gas sector was the best performing sector in 2009, appreciating by 141% compared to the STI’s 53% rise. Though there were concerns about the sustainability of exploration and production activities
because of low oil prices in the earlier part of the year, confidence came back to the market with higher oil prices that were spurred by a myriad of factors. Government stimulus packages arrested the downward
spiral of economic activity and market sentiment improved. With the belief that the global economy is likely recovering (albeit still fraught with uncertainties), the greenback weakened as funds flowed out to higher
yielding assets, supporting the rise in oil prices. The solid long-term fundamentals of the oil and gas industry also endeared themselves to investors.
Push for deeper waters. Stepping into 2010, we see companies with expertise in deepwater production faring better than those limited to shallow waters. Keppel Corporation and SembCorp Marine are likely to see greater demand for
semi-submersibles and drillships from customers, though there will still be demand for jack-ups. The push for even more technical vessels is likely to continue, benefiting companies that do not scrimp on research
and development. Ezra Holdings is likely to remain a favourite with its growing subsea production segment, barring unforeseen circumstances.
Ah, was it called something like : Far East "Levingston" (not sure the spelling)?
gregorsamsa ( Date: 29-Dec-2009 22:40) Posted:
interestingly for those who are in the market long ago.. Keppel FELs which is the unit producing all these oil rigs and stuff was once listed.. there you go.. just shows that the profitable stuff tends to get eaten up while those not so good gets floated.. SPC so good they also ended up selling it to Petro China
grandmaster89 ( Date: 29-Dec-2009 21:54) Posted:
They get payment and the revenue is recognized in the income statement.
Keppel's earnings comes from the sale of completed vessels.
I think it recognises such revenue by stages, e.g. 20%, 30%, 15%, 25% , etc .... On hindsight, its delivery could mean the risk of failing to complete on schedule is over (i.e. any possible provision or compensation amounts is 'more or less' certain).
grandmaster89 ( Date: 29-Dec-2009 21:54) Posted:
They get payment and the revenue is recognized in the income statement.
Keppel's earnings comes from the sale of completed vessels.
Calculation ( Date: 14-Dec-2009 14:53) Posted:
What impact would this have on its share price? Apart from "job done" and "please settle the balance of payment"?
interestingly for those who are in the market long ago.. Keppel FELs which is the unit producing all these oil rigs and stuff was once listed.. there you go.. just shows that the profitable stuff tends to get eaten up while those not so good gets floated.. SPC so good they also ended up selling it to Petro China
grandmaster89 ( Date: 29-Dec-2009 21:54) Posted:
They get payment and the revenue is recognized in the income statement.
Keppel's earnings comes from the sale of completed vessels.
Calculation ( Date: 14-Dec-2009 14:53) Posted:
What impact would this have on its share price? Apart from "job done" and "please settle the balance of payment"?
Clinches three more contracts worth S$160m Maintain Outperform and target price of S$10.80, still based on sum-of-the-parts valuation. Keppel O&M has secured contracts worth S$160m for a FPSO conversion, a derrick lay barge completion and life extension for a semisubmersible rig. YTD, Keppel has secured S$1.5bn worth of contracts, reaching our order-win forecast. Our earnings estimates are unchanged, so is our target price. We remain positive on Keppel Corp on the back of improving order opportunities and expect stock catalysts from the announcement of more contract wins. - CIMB
Oil and Gas Sector: To continue to outperform in 2010, Ezra FV $2.40, SembCorp Marine [BUY, FV: S$4.16], Keppel Corporation [BUY, S$9.70].
OCBC - By Low Pei Han Friday, 04.12.2009
The oil and gas sector was the best performing sector in 2009, appreciating by 141% compared to the STI’s 53% rise. Stepping into 2010, we see companies with expertise in deepwater production faring better
than those limited to shallow waters. Keppel Corporation and SembCorp Marine are likely to see greater demand for semi-submersibles and drillships from customers, though there will still be demand for jack-ups.
Ezra Holdings is likely to remain a favourite with its growing subsea production segment, barring unforeseen circumstances. The outlook for the supply vessel segment is dimmer than the construction vessel
segment, given a possible oversupply situation for the former with many deliveries of newbuilds this year and next year. However we do note some deliveries may slip. We continue to be OVERWEIGHT on the oil
and gas sector though we point out that different stages of the value chain and their sub-segments experience different demand and supply dynamics. As such, we have picked Ezra Holdings [BUY, FV: S$2.40],
SembCorp Marine [BUY, FV: S$4.16], and Keppel Corporation [BUY, FV:S$9.70] as likely beneficiaries based on underlying trends.
Best-performing sector in 2009. The oil and gas sector was the best performing sector in 2009, appreciating by 141% compared to the STI’s 53% rise. Though there were concerns about the sustainability of exploration and production activities
because of low oil prices in the earlier part of the year, confidence came back to the market with higher oil prices that were spurred by a myriad of factors. Government stimulus packages arrested the downward
spiral of economic activity and market sentiment improved. With the belief that the global economy is likely recovering (albeit still fraught with uncertainties), the greenback weakened as funds flowed out to higher
yielding assets, supporting the rise in oil prices. The solid long-term fundamentals of the oil and gas industry also endeared themselves to investors.
Push for deeper waters. Stepping into 2010, we see companies with expertise in deepwater production faring better than those limited to shallow waters. Keppel Corporation and SembCorp Marine are likely to see greater demand for
semi-submersibles and drillships from customers, though there will still be demand for jack-ups. The push for even more technical vessels is likely to continue, benefiting companies that do not scrimp on research
and development. Ezra Holdings is likely to remain a favourite with its growing subsea production segment, barring unforeseen circumstances.
Keppel Corporation: Brighter outlook. Upgrade to BUY. Reflecting the higher pace of new orders and bright sector outlook, we anticipate new order wins of S$3.8b and S$4.0b for its core offshore marine segment in FY10 and FY11 respectively. We have raised our earnings estimates as well. Our recent upgrade of Keppel Land has also bumped up our fair value estimate to S$9.70 (based on SOTP valuation). Finally, Keppel has also mentioned that it may unlock the value of some of its infrastructure assets through a listed business trust, given suitable market conditions. With all the above reasons, we upgrade the stock to a BUY.
Just over a span of three days in end-Nov saw Keppel announcing a total of S$884m of orders from four different customers such as Saipem and Noble Corporation. Order flows are gaining momentum and we think 1Q10 will see additional new orders that will benefit the entire sector with renewed capex rollouts. We are optimistic of Keppel’s chances of obtaining work from Petrobras, given 1) its impressive rig building track record, 2) the existence of a wholly-owned Keppel FELS Brasil’s yard in Rio de Janeiro and 3) Keppel’s close relationship with Brazil as seen from previous orders. Our property analyst has also identified several catalysts for Keppel Land in 2010, which leads us to be positive over the group’s outlook for the year ahead. Finally, Keppel has also mentioned that it may unlock the value of some of its infrastructure assets through a listed business trust, given suitable market conditions. Given all the above reasons, we raise our fair value estimate to S$9.70 and upgrade our call to BUY.
Chain effect?....quite unlikely for the richest region in the world...the United Arab Emirates...maybe the chain effect is only probable when their oil wells are empty.
Incidentally, I am also thinking may be shareholders of Keppel and Sembawang shouldn't be celebrating their luck at this stage. Imagine if months later, both companies' major debtors in Middle East announced cash flow problems due to default payments by Dubai World (i.e. Dubai World failed to pay them and hence they are unable to pay Keppel and Sembawang) ....
(SINGAPORE) Singapore's two major conglomerates with interests in the Middle East yesterday allayed fears of any fallout from Dubai World's credit woes.
'Keppel Corp does not have any exposure to Dubai World from its projects in the Middle East,' said a Keppel spokesman.
Keppel, through its infrastructure arm Keppel Integrated Engineering, is involved in Qatar's $1.5 billion Doha North Sewage Treatment Works - the largest greenfield wastewater treatment, water reuse and sludge treatment plant in the Middle East.
Keppel also has a $1.7 billion domestic solid waste management centre in Qatar, which is due to come on stream soon.
Major utilities and infrastructure player Sembcorp is also seen as unlikely to suffer any problems as a result of Dubai World's troubles.
Sembcorp's contracts are not with Dubai World, and its plants in the Middle East are for power generation and water treatment - both essential utilities.
Sembcorp has a 40 per cent stake in the US$1.7 billion 887 megawatt Fujairah 1 independent water and power project (IWPP) in Fujairah, another of the UAE's seven emirates, which are all separately run entities.
Sembcorp also recently secured finance from a consortium of international banks - none of them Dubai-linked - for the US$1 billion Salalah IWPP in Oman. This is scheduled to start operating in the first half of 2012.
Township development, building and infrastructure consultancy Surbana also said yesterday it will see little effect on its Middle Eastern operations.
'We do not really have projects in Dubai,' said a spokesman. 'Most of our Middle East projects are in Abu Dhabi.
'Because of the economic situation, some of our Middle East projects are facing some slight delays but they are still on-going.'
Surbana is lead consultant for the US$109 million Abu Dhabi Tourism Authority Headquarters, the US$110 million Abu Dhabi Corniche Waterfront Hotel and the US$230 million Emirates Morocco Hotel, among other projects.
The consultancy is also involved in the US$435 million redevelopment of Abu Dhabi's Al Bateen district.
Keppel shares closed 28 cents lower at $8.10, while Sembcorp shares ended the day 10 cents lower at $3.70.
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