KUALA LUMPUR (Feb 17): Uzma Engineering Sdn Bhd (Uzma Engineering), a wholly-owned subsidiary of Uzma Bhd (Uzma), has bagged a RM59 million contract from Petronas Carigali Sdn Bhd to provide cased hole electric-line logging perforation and other services for two years.

In a filing with Bursa Malaysia, Uzma (fundamental:1.7; valuation: 0.7) stated the contract was effective from Jan 28, 2015, with the option to extend for an addition of one year period, until Jan 27, 2018.

“The key determinant factor for viability of well maintenance and reactivation is oil price. The project could become sub-economic (uneconomical), if crude oil dipped below US$25 to US$30 per barrel,” said Uzma.

Uzma also noted the execution of the contract depends on work orders to be issued by Petronas Carigali from time to time.

“It is the prerogative of Petronas Carigali to decide the timing on the requirement of the equipment and services. Hence, any delay in issuing work order, will lead to delay in revenue recognition,” the filing read.

Uzma had earlier last month, revealed it has secured a contract for the provision of through tubing downside tools and services from Petroliam Nasional Bhd (Petronas), and the contract period will last for two years effective from Jan 1, 2015 to Dec 31, 2016, with an extension option of one year.

Uzma closed 16 sen or 7.62% higher at RM2.26 today, bringing its market capitalisation to RM608.73 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)