The Star reported that SapuraKencana Petroleum, Hibiscus
Petroleum, Sona Petroleum, CLIQ Energy and Coastal Energy are interested
to bid for US-based Murphy Oil Corp’s proposed sale of a 30% stake in
its Malaysian oil & gas assets,
which could be worth US$2bil-US$3bil (RM6.6bil-RM9.9bil). The
indicative market value translates to up to 3.3x the US$898mil (RM3bil)
acquisition value of Newfield’s Malaysian assets by SapuraKencana, which
was completed recently.
Murphy currently has majority interests in five separate production
sharing contracts – Block K, Block H, Block SK309, Block SK311 and SK
314, as well as three gas holding agreements in Block PM311. In 2012.
Murphy’s Malaysian assets generated
revenue of US$2.4bil and operating profit of US$894mil. As at 31 Dec
2012, its assets were worth US$4.8bil, with oil reserves of 95.7mil
barrels of oil and natural gas reserves of 357.6bil cubic feet.
Murphy holds an 80% stake in the Kikeh field, Block K offshore
Sabah, which is Malaysia’s first deepwater production field, and is one
of Murphy’s key assets. Other significant assets are the shallow oil
fields in Block SK, Sarawak, and
the yet-untapped Block H, where Petronas is planning to deploy its
second floating liquefied natural gas vessel (FLNG) in the Rotan field
by 2018. The engineering, procurement, construction, installation and
commissioning job for the Rotan FLNG has been awarded
to a consortium of JGC Corp and Samsung Heavy Industries Co Ltd.
One of the interested bidders are Houston-based Coastal Energy Co, a
firm linked to Malaysian investor Taek Jho Low. Coastal Energy has
interests in upstream blocks in Thailand and Malaysia, including a 70%
stake in the Kapal, Banang and
Meranti (KBM) cluster of marginal fields. Petra Energy Bhd owns the
remaining 30% stake in the KBM field.
Amongst the Malaysian operators, only SapuraKencana appears to be
sufficiently capitalised to take on Murphy’s assets. But this would not
be an easy contest as we expect other international players such as
Shell and Exxon Mobil to enter
the fray.
My comments:
a) the size of the assets
are significant, its almost as if another Petronas has decided to hive
off marginal oil fields - its as significant
b) these are Murphy Oil's assets which may be deemed as "pre-qualified" thus elevating their attractiveness
c) I do not think Murphy is exiting but rather concentrating on "bigger things" with the big boys
d) I do not think the assets will end up with foreign parties as I see a deeper agenda
e) A new light has shone
on SPACs looking for decent assets, no need to scrounge off Indonesian
waters, to that end the fortunes for Sona, CLIQ and upcoming oil and gas
SPACs have brightened
f) The last year and a
half saw numerous listed counters benefiting from Petronas marginal oil
fields strategy - this is as significant if not more so
g) However, I do not see
these assets going to the same parties who have benefited last year, I
think its a strategy from the top to farm out these assets to a more
diversified base thus boosting the breadth and depth of the local oil
and gas players
h) I don't think SapKen
will get it as it does not make much sense, especially since they can
already go regional and even global, its pretty obvious the strategy is
to broaden the number of players
g) SONA, CLIQ and some of the upcoming players such as TH Heavy, Scomi group of companies, Yinson may a better chance
h) the "rush" for some of
the local smaller oil and gas operators to go via RTO may be a strong
indication of the need to tap capital markets to bid for such assets
)e.g. Barakah and the recent on=off PDZ deal)
i) overall its a very significant multiplier effect on the overall markets, read it however you think I meant it be
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