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Monday, July 15, 2013

Perisai - Contract extension for Enterprise 3 (HwangDBS)

Perisai Petroleum; Buy; RM1.57
Price Target: RM1.80; PPT MK

Contract extension for Enterprise 3
Perisai announced that its derrick lay barge, Enterprise 3 has been awarded a contract extension with a
daily charter rate of US$60k by SapuraKencana Petroleum. The duration of the charter includes a fixed
term from 1 Jul 2013 to 15 Aug 2013 and thereafter on a daily charter basis subject to a notice period of
21 days to precede the end of the charter.

To recap, Enterprise 3 has been chartered out to SapuraKencana on a bareboat basis since 2008. It has
come to an expiry in Jun13 but SapuraKencana continues to engage the services of Enterprise 3. The daily
charter rate latest (DCR) of this contract extension is comparable to its earlier long-term contract’s US$63k.
We are optimistic that Enterprise 3 will remain utilised for the rest of the year which has been incorporated
into our earnings forecast.

We reiterate our Buy rating and RM1.80 TP based on 15x FY14 EPS. We continue to like Perisai for its
strong earnings visibility which is supported by long-term charters for its key assets. A key re-rating catalyst
would be Perisai securing a huge drilling contract to enhance earnings visibility. The appointment of KCA
DEUTAG as the rig contractor in Nov12 suggests that it may be on track to secure a drilling contract.

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