Oil - Service, Equipment, Pipelines etc

[winston]

As oil slides, Singapore oilfield service firms struggle to refinance debt

SINGAPORE: Two Singapore oilfield service firms are finding it tough to refinance debt maturing later this year as the slump in crude prices has made investors and lenders hesitant, banking sources said.

Ezra Holdings Ltd has a S$200 million ($149 million) bond due September and Swiber Holdings Ltd has a S$85 million bond due in June .

Even though the bonds are just five to eight months away from maturity, they are trading as much as 2-2.5 points below par, indicating the concerns around refinancing.

Eugene Cheng, group chief financial officer at Ezra, told Reuters the company has started looking at refinancing. Ezra hopes to use a mix of internally generated cash flow, asset sales and funds raised through the financial markets to address maturity coming towards the end of the year, he said. “Every single oilfield service company will probably say the same thing to investors - just sit tight through this current cycle,” said Cheng, adding that his company has no exposure to exploration activities that are most vulnerable to oil companies’ spending cuts.

But the market is wary. Two lenders have refused to increase their commitment after Ezra had asked to increase an existing five-year loan and extend its maturity, IFR, a Thomson Reuters publication reported, citing bankers.

Cheng declined to give the loan’s details, adding it was not part of the refinancing plan and was for building a vessel.

Singapore’s oilfield services sector saw its fixed assets more than triple in five years, according to Thomson Reuters data, but is being threatened by cost-cutting at oil companies that will likely reduce demand for oilfield services. “In the current market, anything other than investment-grade bonds will have difficulty getting priced,” said Clifford Lee, head of fixed income at DBS, which has been involved in a number of bond issuances from both companies.

“When it comes to companies directly linked to oil and gas, they are facing more stress. Many bond and share prices have been hit, rightfully or wrongly, as they are getting the brunt of investors’ concerns in a market that is already currently not as functional.”

The turmoil in markets may force these companies to resort to private placement, said a Singapore-based banker at a global investment bank who declined to be named because the bank was considering participating in such deals.

Swiber recently placed a S$45 million rights issue with a deep discount, but that hardly placated investors. Its bond yields continued to climb to new highs and its shares are down 8 percent so far this year, after sliding 57 percent in 2014.

Source: Reuters

[behappyalways]

Shell to cut spending by $15bn over three years
http://www.bbc.com/news/business-31034870

[winston]

Leveraging on shipping route

http://www.thestar.com.my/Business/Busi ... ?style=biz

[behappyalways]

Singapore’s troubled rig builders sitting in the eye of the storm
http://sbr.com.sg/energy-offshore/in-fo ... -eye-storm

[behappyalways]

Giant rig builders embroiled in massive Brazilian bribery charge
http://sbr.com.sg/energy-offshore/in-fo ... ery-charge

[winston]

<Research Report>Morgan Stanley cuts 2015-16 oil price forecast; SINOPEC as Top Pick

In a research report, Morgan Stanley reduced the oil price forecasts for 2015 and 2016 to US$60/barrel and US$70/barrel respectively, accordingly, it cut the earnings forecasts for SINOPEC CORP (00386.HK) by 54%, PETROCHINA (00857.HK) by 78%, and CNOOC (00883.HK) by 63%.

The broker continued to choose Sinopec as the top pick, then CNOOC, and PETROCHINA at last.

Rating for PETROCHINA was lowered to Equalweight. CNOOC and CHINA OILFIELD (02883.HK) were rated Overweight.

Given the current sluggish oil price, the broker believed downstream oil companies would outperform the broad market.

SHANGHAI PECHEM (00338.HK), SINOFERT (00297.HK), CHINA BLUECHEM (03983.HK) were considered to be the major beneficiaries of the weak oil price.

Source: AAStocks Financial News

[winston]

Malaysia: Maybank Research sees re-rating in second half for oil and gas firms

KUALA LUMPUR: Maybank Investment Bank Research says as risk appetite improves, it continues to expect a re-rating in the second half of 2015 for the oil and gas sector.

The research house said on Monday investors should thus position for key picks ahead of the recovery.

“Share prices of all O&G service providers (except for MMHE; -17.4%) have rebounded off their lows in December 2014. KNM has emerged as the top performer; share price has risen 47.3% year to-date when compared against its O&G peers (+2.2%-46.9%),” it said.

Maybank Research said despite the recovery in market values, majority of the stocks are still trading at single digit price-to-earnings ratio (PER) multiples.

“Of the 13 O&G groups under our research coverage, six (Alam, Icon, KNM, MMHE, Perdana and Perisai) are trading at below one time price-to-book value,” it said.

Due to the rising risk appetite, the research house continued to advocate a focus on service providers in the production phase, which are less sensitive to oil price movements and capex cuts, given their steady, long-term contract exposure.

It pointed out producing fields will continue to operate for they need to incur just opex and not capex to sustain brownfield activities.

“We maintain our earnings forecasts, target price calls for all O&G stocks under our coverage. Dialog Group (tank terminal and re-gas ops), Yinson (FPSO), BArmada (FPSO) and Perdana (brownfield OSVs) are our key tactical BUYs.

“Of these, Dialog is the only Shariah compliant stock (a scarcity premium) while Perdana is an acquisition target. We expect consolidation to set in with several opportunistic M&A potentials, notably in the OSV and FPSO space. These key picks offer a compelling 14%-71% upside to their TPs,” it added.

Downside risks to 2015 earnings include
(i) persistent high volatility in oil price,
(ii) sustained low oil price level at sub US$60 a barrel,
(iii) contract replenishment due to delays, suspension of new projects and
(iv) cost overruns and higher opex, just to name a few.

Source: The Star

[behappyalways]

Oil rigs across south east Asia are being mothballed
http://www.bbc.com/news/business-31596810

[behappyalways]

Rig builders still stuck in the doldrums despite oil price bounce
http://sbr.com.sg/energy-offshore/in-fo ... ice-bounce

[winston]

Best Stocks For 2015 — IEZ Still Has Plenty of Upside

Despite the disappointing start, the bet on IEZ remains unchanged

By David and Michael Fabian

Source: FMD Capital Management

http://investorplace.com/2015/04/best-s ... Rx_VvyUd1Y