KUALA LUMPUR (March 19): Uzma Bhd’s share price rose as much as 2.5 sen or 7.35% to 36 sen in morning trades today after the group said its majority-owned subsidiary Setegap Ventures Petroleum Sdn Bhd has bagged a contract from ExxonMobil Exploration and Production Malaysia Inc (EMEPMI).

At 10:13am, Uzma shares were unchanged at 34 sen for a market capitalisation of RM108.81 million. The stock, which saw 1.32 million shares traded, erased gains amid a drop in the broader market. 

At 10:24am, the FBM KLCI fell 20.76 points or 1.68% to 1,218.25.

Yesterday, Uzma told Bursa Malaysia the pumping equipment and services contract has a primary term of four years, with EMEPMI having the option to extend the contractual term for another year on the same terms and rates.

"The contract is enabling in nature and the value of the contract would depend on the number of work orders issued by EMEPMI for the duration of the contract,” oil and gas support services provider said.

Analysts are positive on the news. "We are positive on this development as it demonstrates the group’s (Uzma) ability in replenish its orderbook even amid the current sector crisis in which oil prices have recently collapsed over demand and supply imbalance concerns,” Public Investment Bank Bhd analyst Nurzulaikha Azali wrote in a note today.

"Slower global economic growth is also anticipated this year. This is the third contract it has secured for this year, all within this last three weeks. We keep our forecasts unchanged nonetheless, having accounted for this as replenishment of its order book.

"Earnings visibility is secured until FY24 at the very least, though we maintain our conservative stance on earnings given the current volatility in oil prices which could delay the implementation or even extend the duration of various projects. Our 'neutral' call and TP (target price) of 57 sen is maintained,” Nurzulaikha said.