KUCHING: Oil ans gas technology provider Perisai Petroleum Teknologi Bhd (Perisai) was seen to have come a long way by ECM Libra Capital Sdn Bhd (ECM Libra), having gone a long way since its initial coverage on the group.

“Since our initial non-rated note on Perisai back in November 2010, the company has staged an evolution,” highlighted ECM Libra’s head analyst, Bernard Ching. “They have gone from being a single asset owner (of the Enterprise 3) to a full fledged vessel play through its acquisition of 51 per cent in Intan Offshore, a company with eight offshore support vessels.

“In addition, the group announced the acquisition of 100 per cent interest in Garuda Energy (L) Ltd from Nagendran Nadarajah, a former major shareholder, for US$70 million (about RM211.4 million) on Tuesday.”

According to the head analyst, Garuda Energy currently owned a jack-up rig called the Rubicone that was currently being converted into a Mobile Offshore Production Unit (MOPU) and would be ready in May 2011.

“The purchase consideration will be settled by US$50 million (about RM150 million) cash and US$20 million (RM60 million) by issuance of new Perisai shares at RM0.65 per share,” he stated.

“As such, Nagendran would re-emerge as a major shareholder with 10.9 per cent stake in the enlarged share capital of Perisai upon completion of this acquisition which is subject to, among others, formalisation of a share sale agreement within 90 days as well as shareholders’ approval.”

Upon the completion of the MOPU, Ching said Garuda Energy would enter into a bareboat charter with Gryphon Energy (M) which had secured a contract with an oil major.

The bareboat charter would generate a revenue of US$25 million (about RM75 million) per annum.

“There are a lot of details which have not been announced yet including how much debt Perisai will assume to fund the MOPU conversion,” Ching underscored. “However, based on certain assumptions, our back-of-envelope calculations suggest that the deal could potentially add 42 per cent and 79 per cent to earnings per share for the financial year 2011 (FY11) and FY12 respectively.”

“We estimate that Perisai’s price-to-earnings ratio will drop to about 13.6 times based on FY11 EPS and down to 9.2 times in FY12,” he concluded.