UMW MW OIL IL & GAS S CORPORATI RPORATION ON BERHAD HAD 4Q 2016 Financia ial l Resul ults ts An Analys ysts ts Br Briefin fing 28 February uary 2017 1
OUR BUSINESS WORKOVER OFFSHORE DRILLING OILFIELD SERVICES 2 2
OUR ASSETS OFFSHORE OILFIELD WORKOVER DRILLING SERVICES Repair, Hydraulic Offshore Rigs Threading, Workover Inspection Plants Units Semi-submersible Malaysia Jack-ups Thailand China Turkmenistan 3
OUR MANPOWER Global 574 574 Malaysia 513 513 4
FINANCIAL HIGHLIGHTS
2016 FINANCIAL HIGHLIGHTS Revenue (RM mm) 320.8 48% -62% 8% 130.0 87.7 49.7 53.5 1Q 16 2Q 16 3Q 16 4Q 16 FY2016 unaudited 6
2016 FINANCIAL HIGHLIGHTS LAT (RM mm) 1Q 16 2Q 16 3Q 16 4Q 16 FY2016 unaudited -65.1 -68.5 -135.6 5% > -100% -919.8 -1,189 > -100% Huge loss in 4Q mainly due to asset impairment loss of RM780.2m (2016) 7
2016 FINANCIAL HIGHLIGHTS EBITDA (RM mm) 1.3% 26 26.2 3Q 16 4Q 16 FY2016 unaudited 1Q 16 2Q 16 -0.9 -22.3 -30.8 > -100% 28% 8
2016 FINANCIAL HIGHLIGHTS Net Asset Per Share (RM) 1.39 1.38 1.36 1.04 1Q 16 2Q 16 3Q 16 4Q 16 Share Price Market Capitalisation RM 0.65 RM 1.41 billion As at 28/2/2017 *As at 28/2/2017 9
REVENUE BREAKDOWN Drilling Workover Oilfield By Business Segment 2014 2013 2015 2016 RM1,015 m RM738 m RM840 m RM321 m By Geographical Area Foreign Domestic 2016 2015 2013 2014 RM321 m RM840 m RM738 m RM1,015 m 10
Offshore Drilling Rigs OPERATIONAL HIGHLIGHTS
DRILLING RIGS UTILISATION 2016 33% 25% 25% 21% 20% 7% 1Q 16 2Q 16 3Q 16 4Q 16 FY 2016 YTD2017 12
CURRENT CONTRACTS Rig Clients Duration Commencement Naga 1 - - - • • UMW Naga 2 75 days + 1 month May 2017 - UMW Naga 3 - - UMW Naga 4 - - - UMW Naga 5 - - - • • UMW Naga 6 2 + 1 year September 2016 • • UMW Naga 7 18 months April 2017 • • UMW Naga 8 18 + 12 months November 2016 13
ORDER BOOK NAGA 2 Total Remaining Contract NAGA 6 Order Book Value As at 31/12/2016 RM 833 m RM 689 m NAGA 7 NAGA 8 14
DAY RATE Average USD’00 Average Day Rate 160 151 142 128 120 87 80 40 0 2013 2014 2015 2016 15
TENDERING ACTIVITIES TENDERING ACTIVITIES MOVING FORWARD 16
GLOBAL OIL DEMAND & SUPPLY World Oil Demand Non OPEC Supply & OPEC NLG Global Supply Global Demand Million barrels per day 98 OPEC & Non-OPEC Supply Reduction 97.5 97 97.2 96.7 96.5 96 96.0 95.9 95.8 95.6 95.4 95 94.4 94 93 92 91 90 2Q15 3Q15 4Q15 1Q16 2Q16 17
BUSINESS OUTLOOK Reduction in OPEC and non-OPEC production stabilises oil price above USD50/bbls Above USD50 for the past four months Lowest since Sept 12, 2003 18 18
DRILLING RIGS SUPPLY Cold Stacked 83 542 Total Global Jack-up Rigs Jack-up Rigs Available for Contract 459 Potential lesser rigs available in the future Potential Rigs Coming Out From The Yard Total 175 188 271 2016 (Dec onwards) 6 2017 76 idling JUs JUs 2018 14 284 <30 2019 3 2020 6 yrs yrs contracted Grand Total 105 Source: IHS Petrodata 3 Feb 2017 potential to be retired 19
DRILLING RIGS DEMAND WORLDWIDE JACK-UP DEMAND REG EGION ION 2016 2016 2017 2017 Worldwide Jackup Demand North America 6 7 350 Central America 27 27 300 South America 4 4 NW Europe 26 29 250 Mediterranean / Black Sea 12 10 200 West Africa 6 9 Middle East 109 116 150 Southeast Asia (excl. Malaysia) 21 23 100 Malaysia 5 5 Others 75 72 50 TOTAL 291 302 0 TOTAL JU DEMAND 302 2016 2017 291 2016 2017 Increasing demand Source: IHS Petrodata 3 Feb 2017 20
BUSINESS OUTLOOK Current Participation in Tendering Activities *As at 16 February 2017 10 Long Term Short Term 28 Total Bid Value + = USD 758 million 18 17 11 International Malaysia 21
OUR STRENGTHS Young Fleet of High International Specification Assets Experience 8 Countries avg 3 years Continuous International Oil Support Companies 22
SUMMARY 1. Reduction in OPEC and non-OPEC production stabilises oil price above USD 50 / bbls 1. Result in increase in E&P activities; more tenders and contract awards. 2. Signal start of recovery in oil & gas sector. 3. Increasing number of jack-up retired, potentially more coming up with significant number of jack-up around 30 years old. 4. Number of jack up entering the market lesser than jack-up due for retirement. 5. Demand for jack-up expected to increase; improved utilisation. 6. Day rate still a challenge due to slow decrease in oversupply. 7. Cost optimisation to be continued. 8. Best time to position ourselves to maximise benefits in industry recovery. 9. Strengthen domestic market, return to regional market, and develop global market. 23
STATUS OF THE CORPORATE PROPOSAL Page 24
MERGER OF UMW-OG, ICON AND ORKIM Where We Are Currently Transaction Recap UMW- OG is leading the sector’s call for consolidation via the merger with Icon 1 Offshore and Orkim to create one of the largest integrated and diversified offshore O&G services player in Malaysia The Group is Raising Approximately RM1.8bn via a Rights Issue to Strengthen the 2 Group’s Balance Sheet Emergence of Two Strategic Shareholders; PNB and Ekuinas 3 Where We Are Currently 13 Feb Mid-March 19 Jan 27 Feb Signing of Agreement signed Release of Targeted agreements with minority results for completion of with Ekuinas shareholders of Orkim UMW-OG due diligence Upon completion, exercise 100% of Orkim will be part of the enlarged UMW-OG Group Ongoing Process Engagement with lenders, creditor Due diligence process, including vessel inspection Page 25
RECAP OF THE MERGER RATIONALE Preparing Ourselves for the Eventual Sector Recovery Unique Competitive Presence Across Strengthened Heeding the Call for Position Value Chain Financial Position Consolidation Leading player in jack-up Improves earnings Recapitalisation to Spearheading Petronas ’ rigs, offshore vessels and resilience reduce group call for industry tanker operations ‒ OSV business less borrowings consolidation to achieve Able to provide bundled Significant uplift of affected by decrease in operational efficiency services exploration activities revenue and earnings and economies of scale Strengthening Consolidation across ‒ Differentiated from ‒ Exposure to the other competitors downstream industry shareholder profile value chain creates CPP tanker business Synergy potential ‒ Reduces supply chain greater business complexity is non-cyclical ‒ Ship management opportunities Growth visibility for Orkim ‒ Increased ‒ Common function accountability ‒ Steady growth in consolidation ‒ Lower costs through demand ‒ Procurement savings increase in efficiency ‒ RAPID project, a ‒ Diverse technical and economies of scale further catalyst for skills Regional experience in growth different key markets presents cross selling opportunities Page 26
CREATING THE PREMIER INTEGRATED OFFSHORE SERVICE PROVIDER WITH LEADING POSITION ACROSS ASSET CLASSES… An established leader in the provision Largest pure play owner and operator Owner and operator of clean of offshore drilling services to the of offshore support vessel (“OSVs”) in petroleum product (“CPP”) and upstream oil and gas sector in the Malaysia liquefied petroleum gas (“LPG”) Operates 34 vessels consisting of 25 region tankers A fleet of 7 premium jack-ups and 1 With its fleet of 14 CPP and 2 LPG AHT, AHTS and Utility, 6 SSV and PSV semi submersible, it owns and and 3 AWB, with an additional 3 Malaysian flagged tankers, Orkim is operates one of the largest fleet of vessels under construction the largest CPP tanker operator in jack-ups in the region Malaysia with an estimated c.26% Owns and operate a fleet of modular market share and versatile hydraulic workover units for well intervention operations No. of Jack-Up Rigs (1) No. of OSV (2) No. of CPP tankers operating in Malaysia (3) 7 Bumi Armada Orkim 57 14 UMW-OG Alam Maritim 40 Hong Lam 10 7 Swissco Ocean Tankers ICON 34 9 4 KS Drilling Sealink Int'l BTS Tankers 8 26 3 Petro Vietnam Borcos Shipping 25 E.A. Technique 4 Jasa Merin Jasa Merin 21 3 3 Mermaid Maritime SapuraKencana 18 Columbia Ship 2 3 PT Apexindo Energy Platform Scomi Marine 11 2 1 Perisai Petroleum Perisai Petroleum Southern Pac 1 9 We will be the Leading Drilling Company, Tanker Operator as well as One of the Largest OSV Players in Malaysia with a total asset based of RM8.5bn with the Ability to Provide Services Throughout the Oil & Gas Value Chain Notes: (1) Fleet list refers only to jack- up drilling fleet. Teras Offshore’s fleet are primarily liftboats (not included in the graph) (2) OSV list excludes tugs and barges, sourced from broker reports / company websites (3) Position as at November 2016 in Malaysia market Page 27
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