Nam Cheong Sells 1 AHTS, 1 PSV for $43.1M
Nam Cheong Limited (Nam Cheong, or together with its subsidiaries, the Group), an offshore marine player listed on the Main Board of the Singapore Exchange Securities Trading Limited (the SGX) and Malaysia’s largest Offshore Support Vessel (OSV) builder, reported Monday that it has sold another 2 vessels worth approximately $43.1 million (approximately SGD 54.4 million), making it a record sale of 7 vessels within the first 3 months of this year. With these 2 latest sales contracts, Nam Cheong’s order book has hit $429.2 million, or MYR1.4 billion (approximately SGD 539.8 million).
One Anchor Handling Towing Supply Vessel (AHTS) was sold to an emerging player in the oil and gas sector, a subsidiary of a new customer, Kayfour Development Corporation Sdn Bhd, which will be operating the vessel via its subsidiary, Multi Marine Venture Sdn Bhd. Sale of 1 Platform Supply Vessel (PSV) was made to a repeat customer in West Africa, E.A. Temile and Sons Development Company of Nigeria Limited, an established engineering and construction company.
Leong Seng Keat, Nam Cheong’s CEO said, “We are very pleased with this strong sales momentum, with 7 vessels sold in the first 3 months of the year. Notably, since our first entry into West Africa in August 2012, we have made good progress, with our first repeat business from a customer operating in this region, known for its strong prospects in oil discoveries.”
Analysts had estimated that total oil reserves in West Africa are between 10 to 15 billion barrels.
In October 2012, Nam Cheong sold a similar PSV measuring at 5,000 deadweight ton (dwt) to the same customer in West Africa.
Analysts are expecting E&P spending to reach a new record of $723 billion this year, with an increasing number of active rigs coming to market. As a result, it is expected that more OSVs will be required to serve the industry. In addition, 30 percent of the global AHTS fleet is over 25 years-old.
On the industry outlook, Leong added, “As operators seek to grow their efficiencies and capacities, and given the strong sectoral prospects, we expect to see an increase in replacement activities.
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