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Thursday, July 11, 2013

Sumatec sets RM86m profit target (CIMB)

Sumatec Resources Bhd is already on the hunt for new oilfields in a bid to become a large independent oil and gas (O&G) firm by 2017, defined as having proved reserves of 200 million barrels of oil equivalent (boe). This means it has five years to scale up its current proved reserves of just 22 million boe by 10 times.

“We would need new assets on board by late-2015 to arrest the drop inour reserves. The fields could be in Kazakhstan or anywhere else that fits the portfolio, although it would make sense to acquire in Kazakhstan because we already have infrastructure here,” chief executive officer Chris Dalton

 The Shelly oilfields, which Sumatec has the rights to develop, do not have any existing gas processing facilities. Oil produced from its Rakushechnoye assets in Kazakhstan, a 354-sq-km concession area with some 332 million boe of 3P (proved, probable, possible) reserves, is currently transported by trucks and then shipped to Baku, Azerbajian.

 The PN17 firm, previously a downstream service provider, was given a new lease of life after tycoon Tan Sri Halim Saad injected his Kazakh O&G business into the ailing Sumatec. Sumatec had last year signed a joint investment agreement (JIA) with two companies owned by Halim to develop the Shelly oilfields under a concession with the state that lasts till 2015.

 With the passing of its regularisation plan by shareholders at an EGM a few weeks ago, Sumatec expects to be debt-free come the final quarter of this year, and profitable by end-2013. It is also hoping to exit its PN17 status by the second quarter of next year. It has to show two consecutive quarters of profit in the final quarter of 2013 and the first quarter of 2014 to make the application to the regulators. Halim will also emerge as one of Sumatec’s largest shareholders with a 25% stake following the restructuring. (StarBiz)

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