UMW-OG Made An Impressive Debut With 20 Sen Premium Above IPO Price

UMW Oil and Gas Corporation Bhd (UMW-OG) made an impressive 20 sen premium debut on the main market of Bursa Malaysia yesterday, and aims to increase its overseas contribution by the second quarter of next year.

 

UMW-OG, under the stock short name UMWOG and stock code 5243, initial public offering (IPO) had raised approximately RM2.7 billion including over-allotment and claims the title of Malaysia’s largest listing thus far in 2013. The market capitalisation of UMW-OG, based on the price of RM2.80 per share for the enlarged share capital of 2,162,000,000 shares post-listing, is approximately RM6.1 billion.

 

In a press statement, the company said it had secured overwhelming demand from a mix of local and international institutional investors for its shares. A total of 21 cornerstone investors anchored the transaction, subscribing to an aggregate of 399 million shares, representing approximately 18.5 per cent of the enlarged and paid-up share capital of the company.

 

Its institutional book was oversubscribed by 55 times with its shares priced at the top of the indicative range while its retail offering to the Malaysian public tranche witnessed an over subscription rate of 10.7 times.

 

President Rohaizad Darus was quoted by a local media as saying that the leading oil and gas player, was looking at opportunities in the Asia Pacific region in the long term.

 

“With our drilling rig, Naga 3, catering to a contract scheduled to commence in Vietnam next year, we are looking at more forays into the overseas market,” he added.

 

He was speaking at a press nonferrous in conjunction with UMW-OG’s listing on Bursa Malaysia, which is the country’s largest for 2013.

 

UMW-OG has four drilling rigs and is expected to take delivery of another next year. According to Rohaizad, who is also UMW-OG’s non-independent executive director, about 30 per cent of the company’s business at present comes from operations in Thailand, Vietnam, China and Turkmenistan.

 

Rohaizad said in a statement, “To further fuel our growth, we have spread our wings across Southeast Asia, with contracts in Indonesia, Vietnam and Thailand.

 

“We are also active in Asia Pacific region with facilities in China in the east and Turkmenistan in the west. Existing presence in these countries provide us with a solid platform to expand further into Asia Pacific and the global arena.”

 

Rohaizad said UMW-OG’s core business remains in the shallow water and due to the shortage of rigs, is unable to leverage on all the opportunities within the region.

 

“For the next five years, there are enough opportunities in the Southeast Asian region,” he added.

In Malaysia, UMW-OG has eight to 12 existing contracts, which are due to expire by the end of next year.

 

Rohaizad said UMW-OG is also looking into buying more rigs and the listing is to secure additional funds for this purpose. The company has allocated a large portion of the total gross proceeds of approximately RM1.7 billion to acquire, upgrade and maintain drilling rigs and hydraulic workover units as well as to acquire and upgrade its machineries for oilfield services as part of its capital expenditure.

 

On UMW-OG’s dividend policy, he said, there was no fixed policy but in the long term, the company aims to give out dividends on an increasing quantum. He also described UMW-OG’s share price performance on the Bursa Malaysia as commendable, with a comfortable premium based on the current market situation.

 

As at midday, the counter jumped 32 sen above its IPO price at RM3.12 and ended at RM3.10 per share with 221.3 million shares traded.

 

Meanwhile, Reuters reported UMW-OG market cap of RM6.5 billion ringgit dwarfed local rivals Perisai Petroleum Teknologi Bhd and Coastal Contracts Bhd which are each valued at around RM1.6 billion.

 

The robust debut comes after its IPO priced the top of a tight indicative range of RM2.70 to RM2.80 in mid-October on strong demand from institutional investors.

 

Twelve-month target prices set by six brokerages ranged from RM3 to RM3.36, according to a Reuters survey.

Source: Borneo Post

UMW Oil & Gas to Tap Into Regional Energy Demand

UMW Oil & Gas Corporation Bhd (UMW O&G) hopes to continue tapping into the region’s growing energy demand.

 

Currently, Asia accounts for 39 per cent of global energy consumption, which Douglas Westwood expects to rise incrementally over the next twenty years from 2011 to 2030, says non-independent executive director and president Rohaizad Darus.

 

“This clearly places us in a favourable environment,” he told The Borneo Post via email.

 

“We are proud to potentially be the biggest initial public offering (IPO) in Malaysia this year and we hope this reflects the great trust and commitment that is placed in us by not only the investment community, but the business community and industry as a whole.”

 

UMW O&G is due to be admitted to the Official List of the Main Market of Bursa Malaysia Securities Bhd on November 1, 2013 and will have a market capitalisation of approximately RM6.1 billion upon listing.

 

“As a listed company, we are looking forward to taking all opportunities presented to us to increase our value to our shareholders, customers and partners,” he added.

 

With regards to Sarawak in particular, Rohaizad said currently the group does not have any operations, but added that, “We are always interested in new regions and opportunities subject to close evaluation and will of course monitor the region as part of our post-IPO expansion plans.”

 

The group currently hold a seven per cent and 11 per cent market share in Southeast Asia in offshore drilling and workover services respectively.

 

“In Malaysia we have 21 per cent and 36 per cent of the market share in offshore drilling and workover services respectively.

 

“We have a strong backlog which, as of June 30, 2013, totalled approximately RM1,471.3 million.”

 

The firm also has plans to establish the UMW Drilling Academy, which is expected to be in operation by early next year to train more people to ensure a continuous supply of skilled personnel to feed into the group’s expansion plans.

On October 18, UMW O&G IPO to the Malaysian public comprising 43.24 million issue shares has been oversubscribed and the balloting of successful applications was conducted.

 

Subsequent to the close of the institutional offering to Malaysian and foreign institutional and selected investors (institutional investors), including Bumiputera investors approved by the Ministry of International Trade and Industry, the institutional price has been fixed at RM2.80 per share on October 18, 2013.

 

Accordingly, the final retail price for the IPO shares under the retail offering was also fixed at RM2.80 per share.

 

As the Final Retail Price equals the retail price as set out in the Prospectus dated October 3, 2013 issued by UMW Oil & Gas Corporation Bhd, there will be no refund to be made to the successful retail applicants.

 

Based on RM2.80 per share, UMW O&G’s IPO will be the largest IPO in Malaysia thus far this year, with its RM2.36 billion offering attracting substantial interest from international and Malaysian investors alike, evidenced by its institutional book being oversubscribed by approximately 55 times.

 

Commenting on the progress of the IPO process thus far,  Rohaizad  said, “We are extremely pleased and honoured that the investment community has been so supportive of our IPO plans and I truly feel that this represents the great confidence investors have in UMW O&G.

 

“Upon achieving our plans to list, we will strive to live up to investors’ expectations and continue to provide value and growth to our stakeholders and new shareholders as a listed entity.”

 

UMW O&G’s proposed listing has attracted a strong network of cornerstone investors, 21 of which who have agreed to purchase an aggregate of 399,000,000 shares, representing 18.5 per cent of the enlarged issued and paid-up share capital of UMW O&G.

Source: Borneo Post