KUALA LUMPUR (Nov 21): SapuraKencana Petroleum Bhd rose as much as 3.5% after the company announced it was buying Petroliam Nasional Bhd's (Petronas) oil and gas (O&G) assets in Vietnam for US$400 million (RM1.34b billion).

SapuraKencana also secured two production sharing contracts (PSC) in Sabah under a collaboration with Petronas.

SapuraKencana's share price climbed as much as 11 sen to RM3.21 before  settling at RM3.14 at 12.30pm. The stock saw some 10 million shares done.

The FBM KLCI fell 9.76 points or 0.54%.

In a note today,, Kenanga Investment Bank Bhd said SapuraKencana’s energy division now contained a slew of O&G exploration, development and production assets

But the high risk nature of the O&G sector due to lower crude oil prices has prompted Kenanga to reduce its target price of RM4.24 for SapuraKencana shares.
This compares to RM5.31 previously.

Kenanaga, however, maintained its “outperform” recommendation for the stock.

Meanwhile, Kenanga noted that the onshore-Sabah PSCs were apparently near some prolific fields. Kenanga said the deal was a symbol of Petronas’ confidence in SapuraKencana.

“We understand any earnings will likely be in 3-years’ time,” Kenanga said.