Sumatec wants to broaden horizon

KUALA LUMPUR: Sumatec Resources Bhd, which includes the likes of businessman Tan Sri Halim Saad as a major shareholder with 24.9% stake, is looking at new oil field acquisitions to expand its overseas footprint this year.
Its CEO Christopher Layton Dalton said Sumatec is screening for potential acquisitions in Kazakhstan, Russia, UK, Europe, Indonesia and Papua New Guinea.
"We want to broaden our horizon. Besides our current presence in Kazakhstan, we are also looking at all the different options that meet our criteria, taking into consideration their political, economic and financial stability," he told reporters after the group's EGM here yesterday.
Dalton said Sumatec will start acquiring companies this year. "We want to get the concessions of oil and gas development & production," he added.
Sumatec is eyeing matured and proven assets that are undervalued, onshore or near shore. Dalton, however, ruled out assets in deepwater and on the continental shelf.
Dalton said the group will tap into the debt market to fund the merger and acquisition activities.
Sumatec has sold off and closed down all its downstream assets to turn into an upstream player following a series of restructuring exercises.
Earlier in the meeting, shareholders gave Sumatec the go-ahead to develop gas resources at the Rakushechnoye oil and gas field in the Karakiyan district of the Mangistau Oblast, Kazakhstan, through a partnership with Markmore Energy (Labuan) Ltd (MELL).
Halim Saad did not attend the meeting yesterday.
On another note, Dalton said Sumatec expects to achieve profit of RM69 million in the financial year ending Dec 31, 2014 (FY14), and exit the Practice Note 17 (PN17) category after second quarter this year.
"We will make the submission at August this year, should the group record a profit for two consecutive quarters. Hopefully, we will be uplifted from the PN17 list, the earliest in this September," he said.
The estimated profit for FY14 excludes the profit contribution from its agreement on the gas development in Kazakhstan, he added.
Dalton said Sumatec has allocated US$30 million as capital expenditure in 2014 to develop oil resources at the Rakushechnoye field. In the long run, the group plans to invest US$250 million in the next five years.
Sumatec's cash balance stood at RM5 million as at end of 2013.