Ezion Holdings

Ezion Holdings

Postby millionairemind » Mon Jun 08, 2009 8:40 am

This must be a joke. A rights issue for 1.97M????

Published June 8, 2009

Ezion plans share placement to raise $43.4m
Separately, Dayen proposes rights issue to tap $1.97m for working capital


By NISHA RAMCHANDANI

EZION Holdings is raising gross proceeds of about $43.4 million through a proposed share placement of 70 million new ordinary shares at 62 cents each.

On June 5, Ezion entered into an agreement with placement agent CLSA Singapore and scrip lender, Ezra Holdings.

To expedite the delivery of the placement shares, Ezra will make available 50 million existing ordinary shares as well as an additional 20 million shares as part of a share placement option which is being exercised by CLSA.

The placement price of 62 cents represents a discount of 8.01 per cent to the weighted average price of $0.674 traded on the Catalist of the Singapore Exchange on June 4.

The gross proceeds (after deducting expenses) will be used for the acquisition of offshore and marine assets and for general working capital. Ezion said 80-90 per cent will be used for acquisition of offshore and marine assets while the remaining 10-20 per cent will be channelled towards general working capital.

When completed, the subscription will increase the issued and paid-up share capital of the company from about 643.4 million shares to around 713.4 million shares. Upon completion, Ezion will issue to Ezra new ordinary shares equivalent to the number of placement shares purchased, at 62 cents per share.

The shares currently represent approximately 10.88 per cent of the issued and paid up share capital and about 9.81 per cent of the enlarged issued and paid up share capital.

Based on the audited accounts of the company and its subsidiaries as at Dec 31, 2008, the placement will increase the net tangible asset per share of the group from 18.79 cents to approximately 22.88 cents.

The company will make the necessary announcements once the approval-in-principle for the listing and quotation of the subscription shares has been obtained from the SGX-ST, Ezion said.

Separately, Dayen Environmental announced on Saturday a proposed non-underwritten rights issue to raise net proceeds of up to $1.97 million for working capital purposes.

It is looking to issue up to 102.67 million new ordinary shares - at the rate of one rights share for two ordinary shares held - at two cents each.

The issue price of $0.02 represents a discount of 75 per cent to the last transacted price of $0.08 per share on the SGX-ST on June 5.

'As the company will be executing a few water and wastewater projects in the next 6 months, it is envisaged that the working capital requirements would be increased,' Dayen said in the announcement.
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Re: Ezion Holdings

Postby Musicwhiz » Mon Jun 08, 2009 9:32 am

I guess that's what happens when you place out shares at $0.02 ! Massive dilution and not much cash raised..... :shock:
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Re: Ezion Holdings

Postby Aspellian » Thu Jun 11, 2009 5:21 pm

http://info.sgx.com/webcoranncatth.nsf/ ... penelement

12th May 09

Ezion Group entered into an agreement with a Multi-National Oil Major for the supply of marine vessels in Australia with a contract value of approximately AUD 350 million

The Board of Directors of Ezion Holdings Limited (the “Company”) (毅之安控股有限公司)is pleased to announce that a consortium led by the Ezion Group has entered into an agreement with a Multi-National Oil Major for the supply of marine vessels in Australia with a contract value of approximately AUD 350 million.

The Company would form a joint venture company (“JV”) with two of its consortium partners in the oil & gas industry. The ownership of the JV would be shared equally amongst the Company and its consortium partners with each partner owning one third of the JV.

The above mentioned contract is for the first phase of the development of a gas field containing resources of about 40 trillion cubic feet of gas that is located on the north-west coast of Western Australia.

Further details with respect to the JV would be provided in subsequent announcements upon execution of the definitive JV agreement.

The project is expected to commence in the last quarter of 2009 and is not expected to have a positive material impact on the Group’s earnings per share for the financial year ending 31st December 2009 but is expected to have a positive material impact on the Group’s earnings per share for the financial year ending 31st December 2010.

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Re: Ezion Holdings

Postby Aspellian » Thu Jun 11, 2009 5:31 pm

Skilled Group subsidiary in $350m supplier contract to Chevron

Skilled Group Ltd's oil and gas manning business Offshore Marine Services Australia (OMS) has entered a three-way joint venture, which has in turn secured an agreement with Chevron Australia Pty Ltd to supply marine vessels and labor to the Chevron's Gorgon project in Western Australia.

Valued at around $350 million, the joint venture contract is for a minimum three year period and will begin in the third quarter of the 2009 calendar year.
The joint venture company, Offshore Marine Services Alliance Pty Ltd, is an equal split arrangement between OMS, Singapore-listed Ezion Holdings Ltd and Hong-Kong listed Pacific Basin Shipping subsidiary PBSea-Tow company.

The Gorgon project is a joint venture between the Australian subsidiaries of Chevron (operator), ExxonMobil and Shell.

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Re: Ezion Holdings

Postby Aspellian » Thu Jun 11, 2009 5:33 pm

Ezion Holdings Ltd - A$350m contract win is just the beginning

Main catalysts - 1Q09 results in line with expectations – Ezion reported revenue growth of 211.1% to S$14.6m in 1Q09, mainly due to increase in revenue from offshore logistics support services. In line with increased business activities, the Group’s operating expenses increased 177.9% to S$1.7m, resulting in 181.5% net profit growth to S$3.3m in 1Q09

Gorgon project A$350m contract wins – Just the beginning – The contract win of A$350m excites us in three ways -
(1) Ezion, being the lead manager of the Consortium, reinforces Ezion’s capabilities in the offshore support industry.
(2) The contract win of A$350m is just a fraction of the estimated capital expenditure for Gorgon gas field, projected to be around A$50 billion.
(3) Given that the Consortium is involved in the early stages of the Gorgon Project, we believe the Consortium is well positioned to capture a substantial portion of the total capital expenditure going forward.

The in-depth knowledge expected to be acquired by the Consortium from the early stage involvement is likely to create a high barrier of entry for the Consortium’s competitors for subsequent contract biddings.

Earnings forecast revised
– We lower our earnings estimates for FY09F by 15% to S$18.7m, after including contribution from share of profits from Gorgon project as well as pushing back delivery of the first two units of multi-purpose self-propelled jack-up rigs to 4Q09 and 1Q10 (previously assumed 3Q09 delivery).

Valuation & Recommendation -
Maintain BUY with target price revised to S$0.94 – We change our valuation metric from discounted cash flow to price-to-earning based as we expect the group's activities and growth prospects to be earnings driven. We raise our 12-month target price to S$0.94, based on 10x FY10F EPS, justified by its strong earnings outlook, further underpinned by robust industry dynamics. With an upside potential of 62%, we maintain our BUY recommendation on Ezion.

Gorgon Project - A$350m contract wins

Ezion Holdings Limited recently announced that a consortium led by the Ezion Group entered into an agreement with a Multi-National Oil Major for the supply of marine vessels in Australia with a contract value of approximately A$350m. Skilled Group Limited (“SGL”), consortium’s Australian partner listed on the Australian Stock Exchange, separately announced the contract the. SGL announced that a joint venture company, Offshore Marine Services Alliance Pty Ltd (“OMSA”), will be formed between SGL’s oil and gas manning business, Ezion and PBSea-Tow, a wholly owned subsidiary of Pacific Basin Shipping, a Hong Kong listed company with each company owning one third of the joint venture project. The contract, expected to commence in 3Q09, is valued at around A$350m for a minimum three year period.

Overview of Gorgon Project
Australia’s largest known gas resource – 40 trillion cubic feet of gas The Gorgon Project plans to develop the Australia’s largest known gas resource Greater Gorgon gas fields, containing resources of about 40 trillion cubic feet of gas, located about 130 km off the north-west coast of Western Australia. This development will secure Australia’s position as a leading gas producer and generate a new source of wealth for Western Australia and Australia.

Gorgon’s Project operator – Chevron partnering ExxonMobil and Shell

The Gorgon Project is being pursued by the Australian subsidiaries of three leading international energy companies, namely Chevron, ExxonMobil and Shell. Chevron is operator of the Project with a 50% interest, with ExxonMobil and Shell each holding 25%.

Total capital expenditure could cost as much as A$50 billion
In 2003, the Gorgon’s project cost was initially estimated to be A$11 billion. However, Gorgon’s partners Chevron, ExxonMobil and Royal Dutch Shell, have since expanded its scope and also had to deal with inflationary pressures such as construction and labour cost blowouts. Various news agencies reported that the Gorgon Project could cost as much as US$32 billion (or A$50 billion) to develop the 40 trillion cubic feet of reserves, which Gorgon’s operator Chevron refused to confirm the cost estimate. The above-mentioned contract win, A$350m, is less than 1% of the estimated total capital expenditure.

Why should investors be excited?
In our view, the contract win of A$350m excites us in three ways:
1. Ezion, being the lead manager of the Consortium, reinforces Ezion’s capabilities in the offshore support industry.
2. The contract win of A$350m is just a fraction of the estimated capital expenditure for Gorgon gas field, projected to be around A$50 billion.
3. Given that the Consortium is involved in the early stages of the Gorgon Project, we believe the Consortium is well positioned to capture a substantial portion of the total capital expenditure going forward. The in-depth knowledge expected to be acquired by the Consortium from the early stage involvement is likely to create a high barrier of entry for the Consortium’s competitors for subsequent contract biddings.

Revision of Earnings Estimates
We lower our earnings estimates for FY09F by 15% to S$18.7m, after including contribution from share of profits from Gorgon project as well as pushing back delivery of the first two units of multi-purpose self-propelled jack-up rigs to 4Q09 and 1Q10 (previously assumed 3Q09 delivery).

Valuation & Recommendation
We change our valuation metric from discounted cash flow to price-to-earning based as we expect the group's activities and growth prospects to be earnings driven. We raise our 12-month target price to S$0.94, based on 10x FY10F EPS, justified by its strong earnings outlook, further underpinned by robust industry dynamics. With an upside potential of 62%, we maintain our BUY recommendation on Ezion.

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Re: Ezion Holdings

Postby Aspellian » Thu Jun 11, 2009 5:36 pm

Agility lands Gorgon services deal By Upstream staff

Kuwait's Agility has signed a deal with Chevron worth about A$250 million (US$195.8 million) to provide services at the Gorgon gas development off Australia.

Agility, the Gulf's biggest logistics provider by market value, said in a statement that it will provide supply and transportation services to Chevron at Gorgon.

Gorgon a joint venture between the Australian subsidiaries of Chevron, ExxonMobil and Shell, the statement said.

"This project will require significant investment and recruitment and will have an important impact on the West Australian economy," Agility Australia's managing director Mick Turnbull said in the statement.

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Re: Ezion Holdings

Postby Aspellian » Thu Jun 11, 2009 5:40 pm

Partners ready to decide on Gorgon by end of the year

Shell and its partners at the Chevron-operated Gorgon discovery aim to decide later this year whether to go ahead with the $30 billion project.

If approved, Shell is set use part of its share of the Gorgon LNG for a 20-year supply contract signed with Petrochina last year.

Shell head of liquefied natural gas Kathleen Eisbrenner said she is "cautiously optimistic" that the Gorgon partners, Chevron, Shell and ExxonMobil, will make an investment decision this year and that it will be a positive one.

Last year Shell also signed a 25-year contract to supply PetroChina with gas from Qatar, making the Chinese company Shell's largest LNG customer.

Long-term contracts will continue to be the name of the game in Asia, where customers are willing to pay a premium for the security of supply.

"Long-term contracts will continue to underpin the LNGmarket. Demand is particularly robust in China," said Eisbrenner.

South Korea, Japan and Taiwan also continue to renew long-term supply contracts.

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Re: Ezion Holdings

Postby Aspellian » Thu Jun 11, 2009 5:42 pm

Gorgon investment set to cost up to $32 billion to bring project to fruition

CHEVRON'S massive Gorgon liquefied natural gas venture is expected to cost as much as A$50 billion ($32.03 billion), it has been reported.

Chevron, with joint venture partners ExxonMobil and Shell, is also expected to reach a final investment decision on the project by around the middle of this year, the WA Business newspaper said, citing the Western Australia State Premier Colin Barnett.

A spokeswoman from the Premier's office could not immediately confirm the information. Chevron plans to build the Gorgon LNG processing plant on Barrow Island, located off Western Australia state.

Chevron could not be reached for comment.

Chevron, which owns a 50% stake in the Gorgon project, last year expanded the size of the Gorgon LNG processing plant to 15 million tonnes per annum from a previously planned capacity of 10 MMtpa.

The Gorgon gas fields - first discovered in 1981 - have certified gas reserves of more than 40 trillion cubic feet with a nominal development life of about 60 years.

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Re: Ezion Holdings

Postby Aspellian » Thu Jun 11, 2009 5:50 pm

Simplistic "Envelope calculation" - AUD350/3 parties = $117 / 3 yrs = $40million a year

Revenue of $40 million a year is 100% increase vs FY08's revenue S$31million with profit of S$8million.
historical EPS of 1.25cents - fully diluted EPS (new 70mm shares) = 713mm shares = 1.12cents
Historical PE (fully diluted) of ~54 at $0.60 share price.
Forward PE of 27 (assuming net profit margin stayed the same).

Revenue increased from 13mm (Fy07) to 31mm (fy08) to 71mm (fy09)... quite impressive numbers.
If they are able to be a preferred supplier to this project - it will be cashcow for many years.... 60 years???? hahaha!!!

probably another swiber in the making? any views? esp. musicwhiz who is the undisputed O&G expert! (his knowledge of swiber and ezra could be more than many of the finance or middle-management and probably on par with their CFOs!!)

MM - do you think ezion can be another possible candidate for canslim stock (spore-version of "whack" on follow-through)?

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Re: Ezion Holdings

Postby millionairemind » Thu Jun 11, 2009 6:55 pm

Aiyo... don't ask me.. paiseh, I no follow Ezion. :P

If earnings are growing and the market trend is right, sure can one lah.. :P....
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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