UMW Oil makes impressive Bursa debut

UMW Oil and Gas Corporation Bhd (UMW-OG) made an impressive 20 sen premium debut on the main market of Bursa Malaysia today, and aims to increase its overseas contribution by the second quarter of next year.

President Rohaizad Darus said the leading oil and gas player, was looking at opportunities in the Asia Pacific region in the long term.

"With our drilling rig, Naga 3, catering to a contract scheduled to commence in Vietnam next year, we are looking at more forays into the overseas market," he added.

He was speaking at a press nonferrous in conjunction with UMW-OG's listing on Bursa Malaysia, which is the country's largest for 2013.

UMW-OG has four drilling rigs and is expected to take delivery of another next year.

According to Rohaizad, who is also UMW-OG's non-Independent executive director, about 30 per cent of the company's business at present comes from operations in Thailand, Vietnam, China and Turkmenistan.

In Malaysia, UMW-OG has eight to 12 existing contracts, which are due to expire by the end of next year.

Rohaizad said UMW-OG is also looking into buying more rigs and the listing is to secure additional funds for this purpose.

UMW-OG's Initial Public Offering (IPO) raised approximately RM2.7 billion.

Its market capitalisation based on the price of RM2.80 per share for the enlarged share capital of 2.162 billion shares post-listing, is about RM6.1 billion.

Of the IPO, the company has allocated a large portion of its total gross proceeds of approximately RM1.7 billion to acquire, upgrade and maintain drilling rigs and hydraulic workover units, as well as acquire and upgrade machineries for oilfield services as part of capital expenditure.

Rohaizad said UMW-OG's core business remains in the shallow water and due to the shortage of rigs, is unable to leverage on all the opportunities within the region.

"For the next five years, there are enough opportunities in the South-East Asian region," he added.

on UMW-OG's dividend policy, he said, there was no fixed policy but in the long term, the company aims to give out dividends on an increasing quantum.

He also described UMW-OG's share price performance on the Bursa Malaysia as commendable, with a comfortable premium based on the current market situation.

As at mid-day, the counter jumped 32 sen above its IPO price at RM3.12, with 175.46 million shares transacted