RESERVOIR Link Energy Bhd recorded a net profit for the first quarter ended March 31, 2020, according to the oil and gas well services provider’s first quarterly filing with Bursa Malaysia.
Reservoir Link, bound for listing on the ACE Market on July 15, reported revenue of RM22.87 mil for the period under review, of which 90.6% was derived from well perforation services, wash and cement services and well leak repair services segments.
The group said that economic uncertainties arising from the Covid-19 pandemic and low oil prices have forced many global oil majors to cut back on their capital expenditure and operating expenses.
The movement control order, Reservoir Link said, caused operational issues due to the 14-day quarantine requirement for works at certain locations in addition to the reduced flight frequency between East and West Malaysia due to travel restriction.
Petronas announced in May 2020 that it planned to reduce its capital expenditure by 21% compared to what it had previously budgeted for 2020.
This would also affect Reservoir Link where lower spending could reduce demand for its services and consequently may have an adverse effect on its financial performance.
But there are some tailwinds. The group has, up until May, secured four new call-out contracts, which include two call-out contracts for well perforation from Vestigo Petroleum Sdn Bhd and Repsol Oil and Gas Malaysia Ltd, one call-out contract for wireline services from Vestigo, and one for well leak repair with Japan Vietnam Petroleum Company Ltd.
Reservoir Link also secured extensions for three call-out contracts. Further, the well leak repair contracts from ExxonMobil Exploration & Production Malaysia Inc and Repsol were extended for two years and one year to expire in April 2022 and May 2021 respectively.
Its well perforation contract with Roc Oil (Sarawak) Sdn Bhd was extended for another year until August 2021.
Reservoir Link’s earnings per share stood at 1.19 sen. The group on June 25 issued its prospectus in relation to the public issue of 57.13 million new ordinary shares at an issue price of 41 sen per share in conjunction with its listing on the ACE Market. – July 13, 2020
