KUALA LUMPUR: Shares in Uzma Bhd climbed in early trade Wednesday after securing a RM29mil work order from Petronas Carigali Sdn Bhd.

       The oil and gas company added 1.75%, or one sen to 58 sen at 9.18am. Year-to-date, it has risen 2.65%.

       Uzma’s wholly-owned subsidiary, Uzma Engineering Sdn Bhd has won a RM29mil contract from Petronas Carigali.

       The contract is to deploy idle well reactivation and production enhancement services in offshore Sabah.

       It said the risk transfer incentive contract (RTIC) duration will be for three years beginning July 13, 2021 and will end on July 12, 2024.

       PublicInvest Research views this contract positively as it could lead to more opportunities in idle well reactivation in Malaysia.

       “With this contract, we expect its outstanding orderbook to remain healthy at above RM2bil (including umbrella contract), translating to 3.6x of FY20 revenue,” it said, adding that Uzma’s financial year end is June hence this contract was assumed as its first win for FY22.

       “The award of this contract comes as no surprise as Uzma offers a truly integrated approach to idle well reactivation from sub-surface assessment and recommendation to well intervention services.

       “Nevertheless, we are positive, as the start of this contract will lead to more opportunities in idle well reactivation. According to the Petronas Activity Outlook 2021 - 2023, there are more than 3,000 wells of which 45% are idle in Malaysia at present,” the research house said.

       “We maintain our earnings forecast, having factored this as part of our replenishment assumption.

       “Our target price is maintained at RM0.95, based on 10x PER over CY22 EPS of 9.5sen. Our ‘outperform’ stance for Uzma is affirmed,” PublicInvest said.