Uzma bags a two-year contract in Indonesia

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KUALA LUMPUR (March 14): Uzma Bhd has secured a two-year contract for the provision of directional drilling services from Indonesia’s Pertamina Hulu Energi Onshore North West Java (PHE-ONJW).

According to its filing with Bursa Malaysia today, the contract secured by Uzma’s 95%-owned indirect subsidiary PT Cougar Drilling Solutions Indonesia (PT CDS), is for two years effective from Feb 25, 2019 till Feb 25, 2021. It comes with an extension option that is subject to SKK MIGAS’ approval.

SKK MIGAS is an institution established by the Indonesian Government, tasked with managing upstream oil and gas business activities, said Uzma.

Noting that the contract does not constitute a commitment for any specific work, Uzma said the execution of the contract depends on work orders to be issued to PT CDSI from time to time at the discretion of PHE-ONWJ.

This also means that any delay in issuing work orders will lead to delay in revenue recognition, said Uzma.

“As such, there is no firm value for the contract,” said Uzma, adding that the company will make the required announcement and when a material sum of work order is received under the contract.

Uzma said the contract is expected to contribute positively to the group’s earnings and enhance its net assets per share for the financial year ending June 30, 2019 and onwards until the expiry of the contract if work orders are issued to PT CDSI.

Uzma’s shares closed unchanged at RM1.05 today, valuing the company at RM336.03 million. Year-to-date, the counter has leapt by as much as 82.6% from 57.5 sen at end-December, 2018.