KUALA LUMPUR: Petra Energy Bhd is in talks to sell its accommodation work barge, the Petra Endeavour, to Perdana Petroleum Bhd (PPB), for some US$25 million (RM83.25 million) industry sources said.
It is learnt that both parties have been in talks since the middle of last year with details still being ironed out before signing on the dotted line.
While both parties involved in the transaction declined to comment, industry players said PPB was eyeing the work barge to lease to its major shareholder Dayang Enterprise Holdings Bhd, in which PPB has a 24.88%.
To recap, Dayang secured a RM2 billion hook-up, commissioning and topside maintenance contract from Sarawak Shell Bhd and Sabah Shell Petroleum Co Ltd in May 2013 under the Pan Malaysia cluster of jobs in the middle of last year. It seems it is a requirement of Shell that a work barge be utilised, as opposed to a work boat.
Dayang was the largest beneficiary of the Pan Malaysia awards, walking away with some RM4 billion worth of jobs.
“Perdana is looking to buy the ship to cater for Dayang. Shell requires Dayang to utilise a work barge and not a work boat, so the fastest way to get one is through an acquisition … hence the negotiations,” a source said.
If the sale is concluded, the cash proceeds will come in handy for Petra Energy’s expansion plan.
In terms of financials, Petra Energy doesn’t have much to shout about compared with its peers in the oil and gas industry.
For the nine months ended Sept 30, 2013 its net profit dipped 40% to RM12.81 million from RM21.35 million in the previous corresponding period. Revenue was lower at RM333.39 million, compared with RM463.6 million a year ago. Earnings per share fell to 3.98 sen from 9.96 sen a year ago.
For the nine months under review, the company’s finance cost was RM8.73 million or more than 68% of its net profit. Also, Petra Energy had a negative operating cash flow of RM18.56 million for the nine-month period. As at Sept 30, 2013 the company had a cash balance of RM112.1 million and short-term loans of RM121 million.
In fact, Petra Energy incurred a net loss of RM4.08 million for the third quarter ended Sept 30, 2013 compared to a net profit of RM5.09 million in the corresponding quarter last year.
It explained that the quarterly loss before taxation was largely due to lesser baseline scheduled for Sabah and Sarawak Shell’s topside maintenance and hook-up construction and commissioning (HUCC) contract, in line with the client’s activities planned, as well as lower activities executed under Petronas Carigali Sdn Bhd’s umbrella HUCC contract in the integrated brown field maintenance and Engineering Services segment.
“Moreover, works for Petronas Carigali’s Pan Malaysia HUCC awarded in May 2013 are at the early stage of development, thus low contribution was recorded for the current quarter,” Petra Energy added.
Other than the Petra Endeavour, Petra Energy has four another vessels; another two accommodation work barges — namely Petra Discovery and Petra Challenger; and two work boats — Petra Galaxy and Petra Orbit.
As for PPB, the company has an existing fleet 18 vessels. For its nine months ended Sept 30 last year, the company posted a net profit of RM39.77 million on the back of RM196.61 million in revenue.
As at end September last year PPB had fixed deposits with banks and financial institutions amounting to RM44.26 million and cash and bank balances of RM17.49 million. The company has short-term debt of RM99.13 million and long-term borrowings of RM26.55 million.
Until a few years ago, Perdana used to control as much as 60% of Petra Energy but has since sold out of the company, subsequent to a shareholder feud.
Shares in Petra Energy and PPB closed at RM2.38 and RM1.70 respectively last Friday.
This article first appeared in The Edge Financial Daily, on February 10, 2014.