ASSET INJECTION: Firm targeting more than RM1b profit by 2018, say sources
FORMER Renong Bhd executive chairman Tan Sri Halim Saad is scaling up Sumatec Resources Bhd, which is set to make more than RM1 billion in net profit by 2018.
Halim controls 24.9 per cent of Sumatec and has been maintaining his shares since last November as he believes that the company can grow fast.
“He is not selling his shares anytime soon. He plans to build up the company by injecting more assets into it. He is eyeing some oil and gas (O&G) assets in Central Asia,” said a source.
Sumatec expects to produce 30,000 barrels of oil a day in Kazakhstan by 2018. Sources say the company is targeting an average net profit of US$30 (RM95.30) per barrel.
“This means it will make around US$900,000 a day from 30,000 barrels, or more than US$328.5 million a year, compared with less than US$20 million currently from existing operations,” said the source.
For the financial year ending December 31 2014, Sumatec is projecting RM69 million in profits.
The firm is producing oil at the Rakuschechnoye field with Markmore Energy (Labuan) Ltd, which is 99 per cent-owned by Halim.
Sumatec expects to produce 5,000 barrels of oil and gas a day from this field in the next three years.
It is also acquiring Borneo Energy Oil and Gas Ltd, which owns 100 per cent of Buzachi Neft LLP, for US$250 million in cash and shares.
Buzachi has two 25-year contracts to explore and produce oil and gas in the Karaturun Vostochnyi and Karaturun Morskoi fields, also known as Buzachi Fields.
At a recent media briefing, Sumatec chief executive officer Chris Dalton said he expects the acquisition to be completed by October.
He said the two assets will contribute US$1.62 million to Sumatec’s profits in the fourth quarter.
Sumatec is targeting to produce 25,000 barrels of oil and gas a day from the Buzachi Fields.
Meanwhile, Sumatec is expected to move out of its PN17 status by next month and will submit its application to the Securities Commission soon.