‘Still resilient despite falling oil prices’

Dateline 2014-10-23, Borneo Post:

Offshore support velles (sic) (OSV) providers such as Dayang Enterprise Holdings Bhd (Dayang) are still seen as resilient despite weakening crude oil prices.

Analyst Arhnue Tan of AllianceDBS Research Sdn Bhd said she saw no reason to downgrade earnings for Dayang even if the firm lower crude oil assumptions to US$95 per barrel from a previous US$106 per barrel.

“Dayang’s earnings are driven by the resilient shallow water market in Malaysia, where production costs are low at US$30 to US$50 per barrel,” Tan said in a note to investors on Tuesday.

“Dayang’s earnings are backed by their RM4.5 billion orderbook which offers 3.5 times revenue cover. About 80 per cent of their orderbook consist of five-year hook up and commissioning (HUC) contracts which commenced in 2014. The rest is for topside maintenance activities.”

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