FSPO

PP16832/01/2013 (031128)
Malaysia
Sector Update
21 June 2012
Overweight
Wong Chew Hann wchewh@maybank-ib.com (603) 2297 8688 Chong Ooi Ming ming.c@maybank-ib.com (603) 2297 8676
(unchanged)
Oil & Gas

FPSO Market Lively and Vibrant
Pulsating with opportunities. We foresee a strong push for new and rewarding FPSO contracts over the next five years, at a rate of 15-20 new orders p.a.. We see a greater preference for small- to mid-sized leased converted FPSOs, with demand from the Asia-Pacific and Latin American regions. Bumi Armada, Perisai, Yinson and SapuraKencana are our picks to play the burgeoning demand for FPSOs. Positive outlook on the FPSO space. FPSO utilisation is high, and idle units are scant. Orders are on the rise as the number of projects requiring FPSO solutions pick up. These positive indicators reflect stronger global E&P spending as the search for hydrocarbon resources continues, sustained by robust oil prices and energy security needs. Good push for new and rewarding contracts. Out of 200-250 projects earmarked for FPSO solutions over the next five years (average: 40-50 units p.a.), 100-140 firm projects will likely come onstream (average: 20-28 units p.a.). We project 15 new FPSO orders annually over 2012-14. Demand will likely come from Asia Pacific and Latin America. Small - to mid-sized leased FPSOs (below 150,000bpd capacity) which were converted will be the preferred asset class as development moves into: (i) shallow water, (ii) marginal and (iii) matured fields requiring rejuvenation works and (iv) fast-track projects. Strategic partnerships, track record and balance sheet to fuel growth. Leased operators with: (i) proven execution capabilities and engineering skill sets, (ii) balance sheet strength and (iii) boosted by the backing of a strategic partnership at the shipyard or oilfield operator level, will benefit most from the growing demand for new FPSOs. The returns from these FPSO charters are commendable, with project IRRs averaging 10-12%, anchored by long term contracts. FPSO stock picks. We see numerous opportunities for Bumi Armada to capitalise on the potential FPSO projects worldwide as it aims to be a top 4 player by 2013-14. It is currently tendering for 5-6 projects (i.e. Kraken, Madura, C7, Kamelia, Belud) and has the capacity to take up 2-3 new projects p.a.. We do not rule the prospect of Perisai entering the Malaysia-based FPSO market with Emas Offshore as its potential strategic partner. Yinson and SapuraKencana are the most recent entrants into the FPSO market. The former, in partnership with PTSC, secured a 7+3-year USD737m contract for the Lam Son project in Vietnam. The latter owns a 50% stake in FPSO Berantai for the field project, which will be deployed for production by 2H12.
Summary of companies (calendarised)

Company Rec Bumi Armada Buy Perisai Buy SapuraKencana Buy Yinson Buy Sources: Maybank-IB, Bloomberg Price (RM) 4.09 0.895 2.25 2.15 TP (RM) 4.88 1.20 2.68 2.54 EPS (sen) 12F 13F 18.2 21.4 10.7 10.8 12.0 13.3 17.3 23.5 EPS Grth (%) 12F 13F 37.5 17.8 278.2 1.4 44.2 10.8 (50.1) 36.0 PE (x) 12F 13F 22.4 19.0 8.4 8.3 18.6 16.8 12.3 9.0 DPS (sen) 12F 13F 0.0 0.0 0.0 0.0 0.0 0.0 2.5 2.5 Yield (%) 12F 13F 0.0 0.0 0.0 0.0 0.0 0.0 1.2 1.2
SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Oil & Gas - FPSO
Fundamental outlook and prospects

Energising and rewarding. We see exciting prospects in the floating, production, storage and offloading (FPSO) market, with our positive outlook underpinned by enlivening macro and micro fundamental indicators. The steadying oil price environment {Brent crude >USD70/bbl, <USD120/bbl}: (i) supports sustained E&P spending and (ii) aids higher project sanctions. Gaining momentum as the preferred solution. As field development moves towards remote, marginal and deepwater prospects, FPSO vessels are also the preferred solution vis--vis other asset options (i.e. fixed platforms, SPAR) as it compares favourably on economic (i.e. financial costs), engineering (i.e. design, delivery time-span) and geological (i.e. water depth, field reserves) aspects. This is reflected in the increasing number of FPSOs entering the market, from 67 units in 2001 to 158 in 2011, equating to a modest 10-year CAGR of 9%.
O&G: Projected break-even hurdle costs
Production Cost (USD/ bbl) 250 History 200
O&G: Production cost and type of field development

Production Cost (USD/ bbl) Arctic Oil Shale
E O R
Projections
100 Deepwater & Ultra Deepwater 80

Gas to Liquids
High price 150 100

50 Low price
0
60
Heavy Oil
Current hurdle rate~ USD55
base price
40 20 Prod uced 0 Middle Other East Conventional
1980
1995
2008
2020
2035
1,000 2,000 3000, 4,000 5,000 6,000 7,000 80,00 9,000 b boe
Sources: IEA, Maybank-IB
Sources: Infield Systems Limited, Maybank-IB
Trend of FPSOs in service or available

(FPSO units) 190
160 130 3 7 1 5 Units in service (LHS) Idle units (LHS) 11 9 11 7
FPSO fleet utilization rate and idle units

(FPSO units)
12
5 152 148
(%)
Idle units (LHS) Utilisation rate (RHS) 11 11 9 7 6 6 5 5 4 3 3 3 1 96 98 00 02 04 06 08 10 12 YTD 3 5 5 7 100 98 96 94 92 90 88
10 8 6 4 2 2 0
12 YTD
Average utilisation rate: 94%
100
70 40 10
146 6 144 6 139 117 3 4 5 108 5 104 3 90 79 83 2 3 62 67 63 1 1 48 2 1 1 43 27 29 33 17 20 21 23 90 92 94 96 98 00 02 04 06 08 10
2 1 1 1 1 92 94
90
Sources: International Maritime Associates, Upstream, Maybank-IB
Sources: International Maritime Associates, Upstream, Maybank-IB
21 June 2012
Page 2 of 26
Oil & Gas - FPSO Global E&P spending

(USD b) 650 Global E&P Spend (LHS) WTI Crude (RHS)
(USD/barrel) 100 85 500
43 FPSO contracts were awarded in 2009-2011 (averaging 14 units p.a.). Order momentum has picked up in tandem with the recovery in E&P spending. Of these awards, we observed the following trends: (i) FPSO conversions were the preferred construction method, largely due to its faster delivery period (averaging 1824 months), the availability and affordability of tankers (due to a global oversupply) and cost economics (i.e. tailored to fit a fields reserve requirements). 20 units of FPSO ordered were conversions, followed by newbuilds (13) and redeployments (10 units). Orders were largely for small- to mid-sized FPSOs. 65%, or 28 units of the FPSOs ordered were small (15 units) and medium (13 units) sized units, with production capacity ranging up to 80,000 and 150,000 bpd. 15 units were large-sized FPSO orders, catering mainly to Petrobras projects in Brazil.
70
55 40
350
25
10
200
2005 2006 2007 2008 2009 2010 2011 2012F
-5
Sources: Barclays Capital, Maybank-IB
(ii)
(iii) Brazil was the single largest market for FPSOs, making up 30% of the orders. The FPSOs were to cater for Petrobras field development projects, notably the deepwater and pre-salt fields. Petrobras ordered 8 FPSOs for its pre-salt fields in 2010. The Asia-Pacific region accounted for 11 of the orders Australia (3), Malaysia (2), Indonesia (2), Vietnam (2), China and India (1 each), largely deployed for shallow and marginal field projects. (iv) FPSO charters were largely leased contracts. Leased contracts made up 22 of the 43 FPSO orders in 2009-11, accounting for 51% of the market. The lessors were SBM (5 units), Bumi Armada (3), Teekay (3), BW Offshore (2), Bluewater (2), Modec (2), EOC (1), Saipem (1), Sevan (1), Berlian Laju Tanker (1) and Petrofac-SapuraKencana (1).
Snapshot of FPSO contract characteristics
FPSO contract awards
Newbuilds
Conversions
Redeployments
Normally owned
Normally leased
Normally leased
USD 0.82b capex

Source: IHS
3-4 years construct -ion
USD250800m capex
2-3 years construct -ion
At least USD5m capex
3-12 months upgrade
21 June 2012
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Oil & Gas - FPSO
(v)
New players entering the FPSO market. OSX (Brazil) and SapuraKencana (Malaysia) were among the new players joining the FPSO charter markets (with contracts in hand). The emergence of these newcomers coincided with the requirement for local content/ownerships/shipyard owners, and the opening up of field development to domestic oil & gas service providers. These players are backed by their respective national oil companies (NOCs) i.e. Petrobras and PETRONAS. ** Yinson is the latest to join the FPSO market following its partnership with PTSC (Vietnam) for the Lam Son project.
(vi) Consolidation in the FPSO market. These new entrants were offset by consolidation within the sector. FPSOcean filed for bankruptcy in 2009 despite the sale of its partially completed FPSO to Ramunia. Petroprod sold its under-construction FPSO in 2009 to SembCorps Jurong Shipyard; the vessel was finally taken up by Teekay. Oceaneering exited the industry in 2010, having sold its ageing FPSO for scrap, to refocus on its core diving support business. BW Offshore acquired Prosafe Production in 2010, which comprised 8 FPSOs, 2 FSOs and one tanker. Teekay acquired Sevans 3 FPSOs in 2011, which were oncontract, and also the option to buy 2 speculative newbuildhulls located in China (vii) Costs escalate, contracts are longer. On average, the conversion cost of a FPSO has gradually stepped up, from USD720m per unit in 2009 to USD755m in 2010 and USD770m in 2011; while FPSO contracts tenures (measured on the firm portion of the contract) enjoyed longer duration, from 12 years in 2009 to 15 years in 2010 and 16 years for 2011; project IRRs averaged around 10%, and project financing hovered around a 70:30-80:20 debt:equity ratio, depending on the balance sheet strength of the respective firms and the availability of corporate guarantees from oil majors.
The gradual increase in FPSO conversion cost..
(USD m)
780
.is supported by lengthening (firm) tenures

(years)
Average no of years for firm contract tenure
Average capex per vessel

777.2 755.0
18 16
14 16 15
760 740
720 717.8
12
12
700
2009 2010 2011
10
2009 2010 2011
Sources: International Maritime Associates, Upstream, Maybank-IB 21 June 2012
Sources: International Maritime Associates, Upstream, Maybank-IB Page 4 of 26
Oil & Gas - FPSO
FPSO contracts awarded YTD from 2009

Award date 2009 2009 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 2011 Company SBM Offshore BWO EOC Bumi Armada Saipem Bluewater SBM Offshore Bluewater Modec OSX BWO BWO SBM Offshore Hyundai Sevan BLT Petrofac Daewoo Teekay Teekay Sembcorp (Jurong) Keppel Petrobras (Engivix/GVA/ COSCO) SBM Offshore Petrofac Hyundai Modec Field Aseng Papa-Terra Chim Sao TGT Aquila Nan Hai Baleia Azul Kitan Guara-Sapinho Pilot Waimea TSB Athena Lula Nordeste Goliat Huntington Pagerungan Cendor Ph.2 CLOV Bauna/Piracaba Aruana Roncador Parque das Baleias Pre-salt fields* Waimea Water depth (m) 1,000 1,200 95 43 815 115 1,200 344 2,140 130 100 130 2,131 340 120 75 70 1,290 277 980 1,600 1,400 1,500 130 75 Oil Company Nobel Petrobras Premier Oil Hoang Long ENI CNOOC Petrobras ENI Petrobras OGX Kangean Energy Ithaca Petrobras ENI E.ON Kangean Petrofac Total Petrobras Petrobras Petrobras Petrobras Petrobras OGX Petrofac/ Petronas BP Petrobras Country Guinea Brazil Vietnam Vietnam Italy China Brazil Australia/ Timor Leste Brazil Brazil Indonesia UK Brazil Norway UK Indonesia Malaysia Angola Brazil Brazil Brazil Brazil Brazil Brazil Ownership Leased Owned Leased Leased Leased Leased Leased Leased Leased Owned Leased Leased Leased Owned Leased Leased Owned Owned Leased Leased Owned Owned Owned Owned Lease/ Owned Owned Leased Owned Owned Owned Owned Leased Leased Leased Leased Leased Construction type Conversion Conversion Conversion Conversion Conversion Redeployment Redeployment Redeployment Conversion Conversion Conversion Redeployment Conversion Newbuild Redeployment Redeployment Conversion Newbuild Conversion Redeployment Conversion Conversion Newbuild Conversion Redeployment Newbuild Conversion Conversion Conversion Conversion Newbuild Redeployment Conversion Newbuild Redeployment Conversion Shipyard Keppel Cosco Dalian Keppel Keppel Dubai DryDocks Batam Keppel Jurong Cosco Dalian Samsung Jurong Dubai DryDocks Keppel Hyundai Nymo Jurong SapuraKencana Daewoo Jurong Aibel Jurong Keppel Rio Grande Sul shipyard Keppel Keppel Hyundai Cosco Dalian Jurong TBD TBD TBD Keppel Keppel Samsung Keppel Keppel Contract terms (Charter years or EPC) 15 yrs + 5 yrs EPC 6yrs + 6yrs 7yrs + 8 yrs 20yrs 1yr -1.5 yrs 18yrs 5yrs + 5yrs 20yrs EPCI 10yrs + 4 yrs 3yrs + 5 yrs 20yrs EPC 5yrs 4yrs EPC EPCC 9yrs + 6yrs 2yrs EPC EPC EPCC for 8 units EPCI 7yrs EPC 20yrs EPCI EPCI EPCI EPC 12yrs 20yrs 6yrs+14 or 10yrs+10 4yrs+4 7yrs + 6yrs
Berantai Malaysia 424 Quad 204 UK 2,300 Cernambi Sul Brazil Waikiki Pero Inga 2011 Modec 110 OSX Brazil (OSX 3) TBD 2011 OSX Campos Basin OGX Brazil TBD 2011 OSX Campos Basin OGX Brazil TBD 2011 McDermott Crux liquids Nexus Energy Australia 1,421 2011 SBM Offshore Block 15/06 - Ngoma ENI/Sonangol Angola 2,100 2011 SBM Offshore Lula Nordeste Petrobras Brazil 410 2011 Teekay Knarr BG Norway 150 2011 Bumi Armada Balnaves Apache Australia 85 2011 Bumi Armada D1 ONGC India Sources: International Maritime Associates Inc, Upstream, Maybank-IB * a single order comprising 8 hulls 21 June 2012
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Oil & Gas - FPSO
Snapshot of FPSOs currently deployed

There are currently 159 FPSOs in the world. Of the total inventory, 152 units are currently in service worldwide while 7 units are reported as off field and available for reuse, down from 11 units a year ago. Utilisation is high, at 96%. The Asia Pacific region (i.e. Asia and Oceania) has the largest count, with 48 FPSOs in operation. This is followed by the Americas (39): Latin (32), Central (5) and North (2), Africa (38), Europe (23) and the Mediterranean (4).
Current deployment of global FPSO fleet: 159 units in the field
Canada
23
Northern Europe
4 5
Gulf Of Mexico Mediterranean
14
Far East
32
Brazil
38
Africa
Mideast/ SW Asia
20
South East Asia
Legend
Number of FPSOs deployed in the region
Units of f hire
Australia/ NZ
13
Sources: International Maritime Associates Inc, Upstream, Maybank-IB
Idle FPSOs available for hire

FPSO Owner Age profile (year) 1990 1997 1980 1972 1975 1990 1992 Lease/ own Lease Lease Lease Lease Lease Lease Own Type Processing capacity Oil (bpd) Gas (mmscf) 40,000 60,000 6,000 (condensate) 150,000 165,800 24,000 90,000 175 115 118 12 Storage capacity 730 595 725 1,150 2,200 300 1,000 Turret mooring system Disconnectable Submerged production Spread moored External External Dynamic positioning Internal disconnectable
Front Puffin Munin Lewek Arunothai Cossack Pioneer Falcon Noble Seillean Nan Hai Kai Tuo
Sea Production/ Rubicon Bluewater Ezra/EOC Petrofac SBM Noble ConocoPhillips
Conversion Conversion Conversion Conversion Conversion Newbuild Conversion
21 June 2012
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Oil & Gas - FPSO
10 new FPSOs were ordered to date (up to Jun 2012). In the first six months of 2012, 10 units of FPSOs have been ordered, of which 8 are new vessels while 2 are redeployments of existing FPSOs. These vessels are scheduled to hit the market from 2012 to 2017.
FPSO contracts awarded in 2012
Company Daewoo Blue Marine Blue Water PTSC/Yinson SBM SBM Odebrecht/UTC/ OAS Field Ichthys Mexican GOM Alma/Galia Thang Long/ Dong DO Sapinho North Fram Franco/Transfer of Rights pre-salt area* Oil company Inpex Sea Production Enquest PetroVietnam/ Petronas Petrobras Shell Petrobras Country Australia Gulf of Mexico UK Vietnam Brazil UK Brazil Ownership Owned Leased Owned Leased Leased Leased Owned Shipyard Daewoo Keppel Blohm & Voss Keppel CSSC TBD Inhauma Shipyard Construction type Newbuild Redeployment Redeployment Conversion Conversion Conversion Conversion
Sources: International Maritime Associates Inc, Upstream, Maybank-IB * a single order comprising 4 hulls
Current order backlog for FPSOs worldwide stands at 40 units, consisting of 20 conversions, 14 newbuilds and 6 currently being modified for re-deployment. Not included in the 40 units, are 3 speculative newbuild orders without field contracts (Sevan 2 units, Ramunia 1 unit). Brazil currently dominates, with orders for 25 FPSOs (16 conversions, 8 newbuilds and 1 redeployment), including 12 serial pre-salt units. The underlying growth in Brazil is largely due to: (i) Petrobras plans to develop a new pre-salt province entailing at least 40 large-scale FPSOs and (ii) compliance with local content clauses for FPSOs (up to 65%).
FPSOs in the pipeline 40 units on order
Northern Europe
3 2 1
Gulf Of Mexico
1
Mideast/ SW Asia
South East Asia 1 1
Brazil
8
Africa
1 1
16
1 Australia/ NZ
Legend
Number of newbuild FPSOs to be deployed per region
Number of converted FPSOs to be deployed per region
Speculative units without contracts in hand
Number of FPSOs to be redeployed per region
Sources: International Maritime Associates Inc, Maybank-IB 21 June 2012 Page 7 of 26
Oil & Gas - FPSO
FPSO outlook - positive

The FPSO market is at an early stage of the demand cycle, in our view, with ample room for growth. Projection-wise, 200-250 new orders for FPSOs are expected to enter the market over the next 5 years. The orders are categorised into 2 core groups for: (i) visible and (ii) future emerging projects. (i) Visible projects: In the planning pipeline are 125 firm projects that potentially could require FPSOs should the projects go to development. FPSOs are the preferred production solution for 100 of these projects. The remaining 25 projects could require either FPSOs or other types of production solutions (i.e. tension-legged platform (TLP), semi-submersibles, SPAR). With a few exceptions, all the projects are declared discoveries, some of which will require multiple FPSOs for development. Future emerging projects: A reasonable estimate is that 75 to 125 FPSO projects will emerge over the next five years that are not now visible. This estimate is based on an assessment of the number of projects in the current planning list and were not visible a few years ago.
(i)
FPSO: Supply and demand

(Units)
250
Producing FPSOs
Idle units re employed
High demand
Base
Low demand
250
200
200
150
150
100
100
50
50
1990
Source: IHS
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
1. Sensitivities of projects
Insensitive Based on the analysis of the 125 potential FPSO projects, it is estimated that about 30% are relatively insensitive to short-term market conditions.
21 June 2012
Page 8 of 26
Oil & Gas - FPSO
The decision to proceed will be based on long-term oil price assumptions and potential of the project to build reserves. The need to replace reserves and the opportunity to exploit large hydrocarbon complexes provide continuous momentum for project development. This grouping comprises big projects involving large reservoirs offshore Brazil and West Africa. Sensitive 40% of the 125 projects are considered opportunistic projects, which require a robust oil price environment to proceed. They generally involve projects with relatively small reserves and non-major oil operators. These groupings are projects located in South East Asia. Somewhat sensitive: 50/50 30% of the visible 125 FPSO projects are considered somewhat sensitive to short term market conditions, where to some degree, underlying short- to mid-term crude oil prices are taken into account in making an investment decision. These projects are spread over a wide spectrum of geographical areas and generally involve fields with mid-size recoverable reserves, heavy oil or difficult access. Most likely scenario: 100-140 units by 2015. In our view, there will be orders for 100 to 140 FPSOs over the next five years, averaging 20-28 new units p.a. over 2012-2015. This includes new units and redeployments, which will generate capital expenditure (capex) of USD65b-85b over this period. The bulk of the variation between the three scenarios is in the small- to mid-size FPSO orders. An 80:20 ratio for newbuilds and conversions vs. redeployments. We gauge that 80% of the new FPSO orders will be satisfied via newly built or converted units, while the remaining 20% of the FPSO projects will be on a redeployment basis. All redeployments are likely to consist of small- to mid-sized FPSOs.
Forecasted FPSO new orders over the next 5 years 3 scenarios
Low case Oil price: USD70-90/ bbl Unit Capex (USDb) 26 8 31.2 6.4 Reasonable case Oil price: USD90-110/ bbl Unit Capex (USDb) 28 8 33.6 6.4 High case Oil price: > USD110/ bbl Unit Capex (USDb) 30 8 36.0 6.4
Types of FPSO Large FPSOs New converted units with 150-250,000 bpd Topsides pre-salt hulls Midsize FPSOs New converted units with 80-150,000 bpd Topside spec hulls Modified redeployed FPSOs Small FPSOs New converted units below 80,000 bpd Modified redeployed FPSOs Total
Capex (USDb) 1.20 0.80
0.60 0.25 0.30
24 3 3
14.4 0.8 0.9
29 3 4
17.4 0.8 1.2
34 3 5
20.4 0.8 1.5
0.40 0.15
25 11 100
10.0 1.7 65.4
34 14 120
13.6 2.1 75.1
42 18 140
16.8 2.7 84.6
Sources: International Maritime Associates Inc, Maybank-IB 21 June 2012 Page 9 of 26
Oil & Gas - FPSO Snapshot of FPSO orders over the next 5 years by size
(Units)
160
Large FPSOs
Midsize FPSOs
Small FPSOs
Series4
140
120
120 78
80
100
60 48
36 30 34 36
42
40
36 Base scenario: USD 90-110 oil
38 High: scenario: USD 110-150 oil
0 Past five years Low scenario: USD 70-90 oil
Sources: International Maritime Associates, Inc, Maybank-IB
Buoyant environment for the FPSO market over the next two years. Putting things into perspective, the demand-supply outlook for FPSOs appears promising. We expect 15-20 firm FPSO awards for 2012-13 (medium-term outlook). Based on the project pipeline, upcoming projects will most likely come from Asia-Pacific and Africa, and involve leased conversions.
Chronology of idle FPSOs
Company Bumi Armada Sea Production Bluewater Wooside PetroVietnam PTTEP PTTEP SBM Nobel Sea Production ConocoPhillips Ezra/ EOC CNOOC Vessel Griffin Venture Crystal Ocean Uisge Gorm Cossack Pioneer Ruby Princess Challis Venture Jabiru Venture Falcon Seillean Front Puffin Nan Hai Kai Lewek Arunothai Hai Yang Shi You 1Q 2011 Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Hired (overhaul) 11 2Q 2011 Off-hire Off-hire Off-hire Off-hire Scrapped Scrapped Scrapped Off-hire Off-hire Off-hire Off-hire Hired (overhaul) 8 3Q 2011 Hired Off-hire Off-hire Sold to Petrofac Off-hire Off-hire Off-hire Off-hire Hired (overhaul) 7 4Q 2011 Hired Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire (overhaul) 8 1Q 2012 Hired Hired Sold to Enquest Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire Off-hire (overhaul) 7
Total units off- hire and available
21 June 2012
Page 10 of 26
Oil & Gas - FPSO
Opportunities screening and selecting prospects

Target, focus and criteria. Based on the set criteria (i.e. geographical and geological traits, technical traits, field operations), we gauge that the FPSO lease operators under our coverage (i.e. Bumi Armada, Yinson, Perisai) will most likely focus on: (i) small-sized FPSO projects, (ii) converted FPSOs, (iii) the Asian and African markets, and (iv) oil companies that typically lease FPSOs (still developing their own skill sets or balance sheet strength).
Screening prospects
(i) (ii) Geographical & geological traits Water depth: shallow water most likely Region: Asia Pacific preferred, followed by Africa Technical traits Size of FPSO: Preferably small, medium is possible Design: Conversions and redeployments. Newbuilds ruled out due to capex and balance sheet constraints.
(iii) Field operators Small independent operators with small balance sheet that can afford only leases New NOCs seeking JVs to build up technical capabilities (iv) Production timeline Planned first oil/ gas production by 2015 (latest) Sources: International Maritime Associates Inc, Upstream, Maybank-IB
Selecting prospects: 21 projects passed criteria. Based on these settings, of the 120 projects identified, 21 projects passed our internal screening criteria. They are located in 8 countries: Malaysia (6), Indonesia (5), Vietnam (4), India (2), Australia (1), Nigeria (1), the Philippines (1) and United Kingdom (1).
Snapshot of projects that fit Maybank-IBs selection screening criteria
Status Country Field Operator Water depth (m) 80 85-90 80-12 75 55 70 100 100 55 65-70 155 100 80 60 40-300 350 100 25-30 48 120 120 First oil possible 2014 2013 2014 2013 2014 2014 2014 2014 2013 2014 2014 2014 2014 2015 2014 2014 2015 2013 2013 2014 2015
Planned or being studied Bidding/ final design Planned or being studied Bidding/ final design Bidding/ final design Planned or being studied Planned or being studied Bidding/ final design Bidding/ final design Planned or being studied Bidding/ final design Planned or being studied Planned or being studied Planned or being studied Planned or being studied Planned or being studied Bidding/ final design Bidding/ final design Planned or being studied Bidding/ final design Planned or being studied
Australia India India Indonesia Indonesia Indonesia Indonesia Indonesia Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Nigeria The Philippines UK Vietnam Vietnam Vietnam Vietnam
Lady Nora C7 GS 29 Salawati Madura BD Badik Ande Ande Lumut Bukit Tua Kamelia Bunga Dahlia and Teratai Belud E6 NC3/Spaoh Balai Cluster Bilabri/ Orobiri West Linapucau Kraken (Blk 9/2b) Ham Rong (Blk 102/106) Lac Da Vang Gau Chua Dai Nga
Woodside ONGC ONGC PetroChina Husky/CNOOC Anadarko Awe Petronas Petronas/ Hess Petronas Hess Shell Petronas Roc Oil Peak Pitkin Petroleum EnQuest Petronas PetroVietnam PetroVietnam/Petronas Idemitsu
Sources: International Maritime Associates Inc, Upstream, Maybank-IB 21 June 2012 Page 11 of 26
Oil & Gas - FPSO
Companies prospects
Bumi Armada (BAB MK; BUY; TP: MYR4.88). We reckon Bumi Armada is best placed to capitalise on the prospect of strong global FPSO demand. It has the balance sheet to fund 2-3 new FPSOs p.a., and the execution track record and engineering skill sets to deliver FPSOs on time. We understand that that it is currently bidding for 6-8 tenders including Kraken (UK), Kamelia, Belud, E6 (Malaysia), Madura (Indonesia) and Cluster 7 (India). Perisai (PPT MK; BUY; TP: MYR1.20). We do not rule out the possibility of Perisai partnering with Emas Offshore (EOC) to charter an FPSO for the Kamelia gas field project. EOC was recently awarded a Letter of Intent (LOI) from Hess, beating several keen competitors, due to its ability to rapidly deliver an FPSO, by 2013 in this case. It will likely modify the FPSO Arunothai to suit the fields production requirements. Yinson (YNS MK; BUY; TP: MYR2.54). Yinson is the new kid on the FPSO block. It recently clinched its first FPSO job via a JV with PetroVietnam Technical Services Corporation (PTSC) for the Lam Son project. The 7+3-year FPSO bare-boat contract worth USD737.3m requires an FPSO with 18,000 bpd processing capacity and storage for 350,000 bbls. The FPSO will be converted in Singapore, costing c. USD400m in capex. SapuraKencana Petroleum (SAKP MK; BUY; TP: MYR2.68). It will partner Petrofac on a 49:51 basis to own and charter the FPSO Berantai (formerly known as FPSO East Fortune) for the development of the Berantai field. The lease contract charter is for a firm 7 years with the option to extend for another 8 years. Capex for the FPSO is about USD345m. First gas production is expected in 2H12.
Risks
The FPSO industrys wide-ranging operations and geographical profile exposes operators to a broad spectrum of operational, geographical and environmental risks. Below is a non-exhaustive list of the major risk factors faced by FPSO operators. Global economic conditions and oil price levels affect investment plans. Oil companies investment plans are dependent on long-term oil price expectations. Oil field exploration/developments were shelved when oil prices fell below USD50/bbl (average) in 2008. Our economics team projects an average crude oil price of USD105-115/bbl (Brent) for 2012-13, which is conducive for oil & gas exploration/development activities. The FPSO market is also cyclical; an economic slowdown will affect new sales. Execution and delayed delivery risks. FPSO contracts encompass turnkey contracts for the vessels construction, conversion or refurbishment. Operators face late delivery risk and construction cost overruns during this phase. FPSO operators are heavily dependent on multiple vendors throughout the process, for equipment, manpower and yard space, and need the management expertise to oversee the job. Post deployment, FPSO operators need to maintain a pre-agreed commercial uptime. Also, the risk of their contracts being terminated early is not to be disregarded.
21 June 2012 Page 12 of 26
Oil & Gas - FPSO
Financial leverage. Operators do and will maintain a significant level of leverage in line with industry norms. Capex is intensive during the construction of new FPSOs and extensive refurbishments are required for the redeployment of FPSOs.
Prospective floating solution projects identified
Country Malaysia Operator PETRONAS/ Shell/Roc Oil Hess/ Description There are up to 3FPSO projects, which could be awarded in Malaysia this year, while another 3 jobs are expected to roll out in 1-2 years. They are: Hess SB 302 (Belud @ North Sabah), Hess PM301/PM325 (Kamelia @ North Malay basin), Petronas Carigali-Talismans PM302 (Bunga Dahlia and Teratai @ North Malay basin), Roc Oils Balai Cluster, Shells SK308 (E6) and Petronas Spaoh field (NC3) The initial 3 are fast-tracked projects brought forward to boost Malaysias declining oil production and gas supply needs; first gas/oil is targeted for 2013- 2014. Kamelia: FPSO + wellhead platforms. Hess is understood to have given a Letter Of Intent (LOI) to Emas Offshore for the supply of a FPSO. This is a fast track program, for Hess is expected to begin the charter in 1Q2013, though the timeline appears challenging as there is no news yet of a final award being m ade. However SapuraKencana has already received a contract in December 2011 to build the wellhead platform, which in essence firms up the development plan. Emas has proposed to modifying the FPSO Lewek Arunothai, which became available following the termination of its charter from the Arthit field offshore Thailand. The FPSO is likely to undergo modification/refurbishment in Singapore before commencing the contract with Hess. Belud: FPSO + wellhead platform. It has been reported that the M3nergy and EMAS Offshore consortium submitted the lowest bid in a recent tender to lease an FPSO for 7 years firm with options to extend up to an additional 8 years. However, considering that the FPSO Arunothai will be deployed for the Kamelia field, Hess is reported to have offered Bumi and Ramunia-MISC a second chance to match the consortiums bid. Bunga Dahlia & Teratai: PETRONAS-Talismans Bunga Dahlia/ Teratai projects will require an FPSO for field development. With both fields targeted to achieve first gas by 2014, we expect contract awards sometime this year. Should M3Nergy win the Belud job, we reckon either Bumi or Ramunia-MISC could secure the Bunga Dahlia & Teratai fields. Balai Cluster: FPSO + wellhead platform. Roc Oil, Dialog and Petronas have formed a JV to act as the service contractor group under a risk service contract with payment based on performance indicators. A small FPSO with limited production capability is being considered for use in the pre-development phase, which is scheduled to extend over 18 months. Capex for the pre-development phase is estimated between USD200-250m. E6: FPSO. Gas/oil discovery on Block SK308 about 200 km offshore Sarawak. Gas produced on SK308 is earmarked for delivery by pipeline to the Petronas LNG complex in Bintulu. FPSO would be used to extract and export oil and condensate. Award envisioned by 2013. Spaoh: The Spaoh field (NC3) will likely use an FPSO+ fixed platform, or FLNG. Preliminary indication of combined reserves is 100 mil bbls oil, 2.8 tcf gas. Further appraisal is being planned. This field will hit first oil by 2014/16.
India
ONGC
ONGC is expected to announce 2 FPSO projects in 1-2 years. They are: i) ii) Cluster 7 and GS 29
Cluster 7: FPSO + wellhead platforms. The project plans to utilize a small FPSO develop the marginal Cluster 7 oil field off Mumbai. The FPSO for Cluster 7 is required to have 30,000 bpd oil and 63 mmscfd gas processing capacity. Bids for the FPSO submitted in March 12. GS 29: FPSO + wellhead platform. This is a shallow water field around 20 km southeast of Kakinada in water depth of 80 to 120 meters. The project has been around a while. ONGC Has invited expressions of interest in supplying an FPSO for GS 29, offering a potential 2+3 year lease contract.
Sources: International Maritime Associates, Inc, Upstream online, Maybank-IB
21 June 2012
Page 13 of 26
Oil & Gas - FPSO Prospective floating solution projects identified (continued)
Country Vietnam Operator PetroVietnam/ PETRONAS Description There are 4 more FPSO projects on the horizon for Vietnam, 2 of which could be awarded as soon as end this year. They are: (i) (ii) (iii) (iv) Ham Rong (Blk 102/106), Lac Da Vang, Gau Chua and Dai Nga
The Vietnamese market has proven to be exciting enough, kicking-off the action with the award of Lam Sons FPSO to Yinson-PTSC. Gau Chua-Ca Cho: Petronas/ PetroVietnam are evaluating the use of a small FPSO + wellhead platforms to develop a marginal field in the South Vietnamese Nam Con Son basin. This shallow water basin is the largest oil and gas bearing basin in Vietnam. We believe this project will call for a small FPSO, c. 8,000-10,000 bpd processing capability, with first oil targeted for 2014. Ham Rong: This project located in the Gulf of Tonkin (Northern Vietnam) could use an FPSO (c. 25,000 bpd processing) or MOPU + FSO combination; first oil is targeted for 2013. Petronas operates the block with a 50% interest. Partners are ATI (20%), PetroVietnam (20%) and PetroChina (10%). Lac Da Vang: FPSO+ wellhead platforms or MOPU + FSO. This project consists of 2 shallow water discoveries in the southern part of block 15-1/05. The Lac Da Vang reservoir appears to have very 0 light 43 API oil. PetroVietnam is the operator with a 40% interest. Total has 35%, SK Energy 25%. A second discovery, Lac Da Nau lies 15 km to the southwest. Dai Nga: FPSO or platform + FSO. Idemitsu operated O&G discovery in the Nam Con Son basin about 300 km SE of Ho Chi Minh City. Evaluation of the find's commerciality is in progress. First oil could possibly be in 2015. There are 5 FPSO projects expected to be rolled out in Indonesia for the next 1-2 years. They are: (i) (ii) (iii) (iv) (v) Husky/ CNOOCs Madura BD Petronas Bukit Tua, PetroChinas Salawati, Awes Ande Ande Lumut and Anadarkos Badik
Indonesia
Anadarko/ Awe/ Husky/ CNOOC/ PetroChina/ PETRONAS
Madura DB: FPSO. Pre-qualification for supply of the FPSO has begun. FPSO EPCI/lease contract award planned for late 12. Lease for 10 yrs + 5 option years. Unit to have capability to process 110 mmscfd gas and 8,000 bpd condensate and store 370,000 bbls. Development plan approved by govt. Field 60 km offshore, estimated to bbls condensate reserves. Production estimates are 100 mmscfd gas, 6,500 bpd condensates. Bukit Tua: FPSO + wellhead platform. Multiple bids for FPSO are currently being evaluated but M3nergy is tipped to be the lead bidder. The contract calls for a leased unit with 50,000 bpd processing, 600,000 bbls storage. Cabotage rules require the unit to be Indonesian registered. Salawati : FPSO. PetroChina has requested bids for a leased FPSO for use on the Salawati field off Irian Jaya/Papua. This will be a small unit with storage for 260,000 barrels. BLT is indicated as the likely supplier of the unit for Salawati but their current financial difficulties raise questions about the status of their bid. Ande Ande Lumut: FPSO + wellhead platform. AWE in early 2012 acquired the Ande Ande Lumut field from Genting O&G. This shallow water field in northwest Natuna offshore Indonesia has estimated recoverable reserves of 76 million barrels. AWE plans to utilize a small FPSO with oil processing capacity or 40,000 bpd. The development paln envisions 43 horizontal wells. Badik: FPSO+ wellhead platforms or MOPU + FSO. Oil/gas find in the Tarakan Basin. Exploration well encountered 133 net feet of oil/gas play. Anadarko operates block with 35% interest.
UK
Enquest
Kraken (Blk 9/2b): FPSO. Bids being evaluated for a leased FPSO with capability to process 60,000 0 bpd oil. Proven reserves estimated at 89 mil bbls, this is a heavy oil field (API 15 ). Development plan to be submitted in 3rd qtr 12, with first oil scheduled in 4rd qtr 15. Enquest is operator with 25% interest. Nautical has 25%, First Oil Expro 30%, Canamens Energy 20%.
Sources: International Maritime Associates, Inc, Upstream online, Maybank-IB
21 June 2012
Page 14 of 26
Oil & Gas - FPSO
Choice between leased and owned FPSOs among oil companies

Leased FPSOs Petrobras ENI
CNR Pemex 28
Owned FPSOs
20
2 4 4
2 3
Petronas Shell
Kangean
4 2
2
Addx Murphy
Talisman
2 2
2 3 2 2
Statoil Petrovietnam
Chevron ExxonMobil
4 7
1 1
2 2
Premier Apache
Woodside
1 3
6
1 1
1
BP Hess
Maersk O&G
2 2
5 7
OSX/OGX Total
CNOOC
12
Snapshot of global FPSO operators (by lease unit)

(Units) 18 15 12 9 6 13 14 8 8 1 4 2 3 1 4 1 2 Petrofac 3 Fred Olsen 1 2 Saipem 2 Sea Production 2 2
Existing Fleet
On Orderbook
Idle
1
2
3
0 SBM BW
4 1 OSX
Modec
Teekay
Bluewater Bumi Armada
Maersk
21 June 2012
Page 15 of 26
Oil & Gas - FPSO
Buy (unchanged)
Share price: Target price: MYR4.09 MYR4.88 (unchanged)
Bumi Armada
Powering Up
Maintain BUY and MYR4.88 TP. Bumi Armada (BA) offers focused exposure to the Floating Production, Storage and Offloading (FPSO) market. As one of the fastest-growing FPSO operators in the world, it has set its sights on being a top 4 player in terms of FPSO fleet size, by 2013. It is also poised to gain traction in Malaysias O&G sector, as it leverages on PETRONAS capex programme. BA is a steady growth stock with balance sheet strength and proven execution capabilities. Out TP is based on sum-of-parts valuations. In an entrenched position to ride on global E&P programmes. We see numerous opportunities for BA to capitalise on the: (i) 125 potential FPSO projects worldwide, (ii) requirement for new, highly technical OSVs to support global deepwater programmes, (iii) services for the subsea umbilicals, risers and flowlines (SURF), inspection, repair and maintenance (IRM) markets, and (iv) increasing number of offshore development projects in Malaysia (marginal field and Enhanced Oil Recovery (EOR) development) and the Caspian region. Set to embark on an aggressive asset expansion plan. We see BA prospecting for new assets for growth. BA will likely double its FPSO assets, triple its SURF vessels and add up to 8 new OSV vessels to its fleet by 2015. This is possible as it has the balance sheet to support the heavy capex (estimated at MYR6.4b) for its expansion programme while keeping its net gearing below the 1.5x threshold. Powering up - where growth and aspirations meet. We project a 3year net profit CAGR of 25%. All divisions will contribute to growth, fuelled by new vessels progressively coming onstream, and higher utilisation of its existing vessels. This is a sensible aspiration, which would propel BA into becoming the fourth largest FPSO operator globally. A towering growth stock with rewarding returns. With a 3-year forecast net profit CAGR of 25%, its relentless pursuit of excellence will secure Bumi Armada the status of fastest-growing operator among its global peers. However, given prospects for high growth, we believe that it is unlikely that BA will reward shareholders with meaningful dividends in the foreseeable future.
Bumi Armada Summary Earnings Table
FYE Dec (MYR m) Revenue EBITDA Recurring Net Profit Recurring Basic EPS (Sen) EPS growth (%) DPS (Sen) PER EV/EBITDA (x) Div Yield (%) P/BV(x) Net Gearing (%) ROE (%) ROA (%) Consensus Net Profit (MYR m) Source: Maybank-IB FY10A 1,241.4 715.6 350.8 12.0 26.4 0.0 34.0 21.0 0.0 13.6 359.0 40.1 10.8 FY11A 1,543.9 845.1 387.3 13.2 10.4 2.5 30.8 16.2 0.6 3.4 49.9 10.9 9.3 FY12F 1,800.7 1,048.7 532.6 18.2 37.5 0.0 22.4 13.7 0.0 3.0 61.9 13.3 9.2 554.8 FY13F 2,220.6 1,272.6 627.5 21.4 17.8 0.0 19.0 11.7 0.0 2.6 63.2 13.5 9.2 692.2 FY14F 2,504.3 1,442.0 706.9 24.1 12.6 0.0 16.9 10.3 0.0 2.2 54.6 13.2 9.1 795.9
Wong Chew Hann, CA wchewh@maybank-ib.com (603) 2297 8688 Chong Ooi Ming ming.c@maybank-ib.com (603) 2297 8676
Stock Information
Description: Integrated Oilfield services provider with 4 core operations: FPSOs, OSVs, T&I vessels and offshore field services. Ticker: Shares Issued (m): Market Cap (MYR m): 3-mth Avg Daily Turnover (USD m): KLCI: Free float (%): Major Shareholders: Objektif Bersatu Sdn Bhd Ombak Damai Sdn Bhd EPF PNB Karisma Mesra Sdn Bhd BAB MK 2,928.5 11,918.8 6.16 1,594.98 27.0 % 42.4 11.3 6.9 5.8 5.4
Key Indicators
Net cash / (debt) (MYR m): NTA/shr (MYR): Net Gearing (x): (1,824.7) 1.21 0.5
Historical Chart
4.5 4.2 3.9 3.6 3.3 3.0 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 BAB MK Equity
Performance: 52-week High/Low 1-mth Absolute (%) Relative (%) 4.9 0.8
MYR4.50/MYR3.03 3-mth (4.9) (6.3) 6-mth (0.2) (9.1) 1-yr YTD (0.7) (4.9)
21 June 2012
Page 16 of 26
Oil & Gas - FPSO
INCOME STATEMENT (MYR m) FY Dec Turnover Cost of goods sold Gross profit Other operating (exp)/inc. EBIT Net int (exp)/ Inc Associates & JV Exceptional gain/ (loss) Pretax profit Tax Minority interest Net profit Net profit ex EI EBITDA Sales Growth (%) EBITDA Growth (%) EBIT Growth (%) Effective Tax Rate (%) 2011A 1,543.9 (883.1) 660.8 (142.5) 518.3 (109.2) 26.8 (27.7) 435.9 (70.6) (5.7) 359.7 387.3 845.1 24.4 18.1 10.9 16.2 2012F 1,800.7 (984.8) 815.9 (194.1) 621.8 (113.0) 56.3 0.0 565.2 (27.0) (6.0) 532.2 532.2 1,048.7 16.6 24.1 20.0 4.8 2013F 2,220.6 (1,226.2) 994.4 (248.7) 745.7 (138.2) 56.7 0.0 664.3 (30.8) (6.0) 627.5 627.5 1,272.6 23.3 21.4 19.9 4.6 2014F 2,504.3 (1,383.6) 1,120.7 (285.6) 835.2 (155.7) 67.7 0.0 747.2 (34.3) (6.0) 706.9 706.9 1,442.0 12.8 13.3 12.0 4.6
BALANCE SHEET (MYR m) FY Dec Net Fixed Assets Invts in Assocs & JVs Other LT Assets Cash & ST Invts Other Current Assets Total Assets ST Debt Other Current Liab LT Debt Other LT Liab Shareholders Equity Minority Interest Total Cap. & Liab Share capital Net Debt Working capital Gross gearing 2011A 4,201.2 151.3 423.3 1,248.5 912.0 6,936.2 447.4 353.1 2,559.8 33.2 3,528.0 14.7 6,936.2 2,928.5 1,758.7 1,360.0 85.2 2012F 5,274.3 207.6 423.3 990.5 965.5 7,861.3 447.4 373.1 3,000.0 33.2 3,987.0 20.7 7,861.3 2,928.5 2,456.9 1,135.6 86.5 2013F 6,247.5 264.3 423.3 1,539.2 1,053.2 9,527.5 447.4 405.7 4,000.0 33.2 4,614.5 26.7 9,527.5 2,928.5 2,908.2 1,739.3 96.4 2014F 6,840.7 332.0 423.3 1,554.1 1,112.4 10,262.5 447.4 427.8 4,000.0 33.2 5,321.4 32.7 10,262.5 2,928.5 2,893.3 1,791.2 83.6
CASH FLOW (MYR m) FY Dec Net profit Dep. & amortization Chg. In working capital Other operating CF Operating CF Net capex Chg in LT investment Chg in other assets Investment CF Net chg in debt Chg in other LT liab. Other financing CF Financing cash flow Net cash flow 2011A 387.3 326.8 (596.6) 212.6 330.2 (1,058.7) 0.0 (1,058.7) (1,167.6) (410.4) 2,218.5 0.0 1,808.1 970.7 2012F 532.2 426.8 (33.6) (50.3) 875.1 (1,500.0) 0.0 (1,500.0) (1,500.0) 440.2 (73.2) 0.0 367.0 (258.0) 2013F 627.5 526.8 (55.0) (50.7) 1,048.7 (1,500.0) 0.0 (1,500.0) (1,500.0) 1,000.0 0.0 0.0 1,000.0 548.7 2014F 706.9 607.8 (37.1) (61.7) 1,215.8 (1,200.0) 0.0 (1,200.0) (1,200.0) 0.0 0.0 0.0 0.0 15.8
RATES & RATIOS FY Dec Gross Margin (%) EBITDA Margin (%) EBIT Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Interest Cover (x) Debtors Turn (days) Creditors Turn (days) Inventory Turn (days) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (x) Capex to Debt (%) N.Cash/(Debt)PS (sen) Opg CFPS (sen) Free CFPS (sen) 2011A 42.8 54.7 33.6 25.1 17.6 9.3 9.7 17.9 4.7 60.3 90.7 0.6 2.7 2.7 0.5 0.4 (60.1) 31.6 (24.9) 2012F 45.3 58.2 34.5 29.6 14.2 9.2 10.2 0.0 5.5 70.4 63.1 0.6 2.4 2.4 0.6 0.4 (83.9) 31.0 (21.3) 2013F 44.8 57.3 33.6 28.3 14.6 9.2 10.2 0.0 5.4 68.6 60.2 0.6 3.0 3.0 0.6 0.3 (99.3) 37.7 (15.4) 2014F 44.8 57.6 33.3 28.2 14.2 9.1 10.2 0.0 5.4 71.5 63.1 0.6 3.0 3.0 0.5 0.3 (98.8) 42.8 0.5
Sources: Company, Maybank-IB
21 June 2012
Page 17 of 26
Oil & Gas - FPSO
Buy (unchanged)
Perisai Petroleum
Building Traction, Creating Waves
Maintain BUY; TP at MYR1.20. We remain positive on Perisais growth prospects, management focus and balance sheet strength. It could next feature in Malaysias FPSO scene with Ezra, as it seeks to leverage on EOCs assets and experience. Recall that Hess has given a Letter of Intent to EOCs unit, EMAS Offshore, to charter an FPSO for the North Malay basin field. A successful FPSO partnership with Ezra would catapult Perisai onto a new growth path and reinforce our conviction BUY call. Our TP pegs Perisai at 11x 2013 EPS. An FPSO venture in the pipeline? We think Perisai could move into the FPSO charter market for its next Malaysian project. This will be positive and would be a catalyst for growth. Its major shareholder Ezra will likely play a role, for the targeted project and FPSO (i.e. Arunothai) is owned by Ezras 46.5%-associate EOC. Based on our back of the envelope calculation, Perisai should recognise net profit of MYR23m27m p.a. assuming (i) a 50% stake on a USD250m-300m asset cost, (ii) 70:30 debt-to-equity financing and (iii) 20% ROE. Balance sheet prudence to match growth aspiration. While Perisai is the preferred (but not exclusive) partner and distribution channel for Ezra in the Malaysia O&G market and could ride on Ezras experience and skill sets in the floating solutions space, Perisai is risk- and balance sheet-conscious. The size of its balance sheet and opportunities ahead will dictate the pace of its growth. With a low net debt of MYR224m translating to net gearing of 0.7x, Perisai could leverage up by a further MYR500m while keeping its net gearing level below the 1.5x threshold. Changes at the shareholder level. Managing Director, Zainol Izzet Mohamed Ishak has exercised an option to acquire 66m Perisai shares at 48.5sen per share granted to him by HCM Logistics Limited (HCM), a subsidiary of Ezra. Upon the completion of the exercise, Zainol Izzet will be the fourth largest shareholder of Perisai with a 7.7% stake, while Ezras stake will diminish to 16.1% from 23.8%. We view this positively, as it will strengthen Zainol Izzets commitment to take Perisai to a higher level.
Perisai Petroleum Summary Earnings Table
FYE Dec (MYR m) Revenue EBITDA Recurring Net Profit Recurring Basic EPS (Sen) EPS growth (%) DPS (Sen) PER EV/EBITDA (x) Div Yield (%) P/BV(x) Net Gearing (%) ROE (%) ROA (%) Change in net profit (%) Consensus Net Profit (RM m) Source: Maybank-IB 2010A 75.2 39.9 10.3 1.5 (72.6) 0.0 59.5 8.8 0.0 2.6 70.6 4.4 4.3 n.a. n.a. 2011A 82.4 52.6 21.3 2.8 87.8 0.0 31.7 7.8 0.0 2.1 69.5 5.7 5.4 n.a. n.a. 2012F 186.3 142.9 91.0 10.7 278.2 0.0 8.4 4.3 0.0 1.7 97.3 18.3 12.0 n.a. 88.2 2013F 187.1 145.9 92.3 10.8 1.4 0.0 8.3 3.3 0.0 1.4 55.8 15.4 10.2 n.a. 91.0 2014F 188.1 148.9 92.4 10.8 0.1 0.0 8.3 2.4 0.0 1.2 26.7 13.2 9.6 n.a. 91.7
Wong Chew Hann, CA wchewh@maybank-ib.com (603) 2297 8688
Stock Information
Description: An oil & gas service provider owning a MOPU, a pipelay barge and 8 OSVs Ticker: Shares Issued (m): Market Cap (MYR m): 3-mth Avg Daily Turnover (USD m): KLCI: Free float (%): Major Shareholders: Ezra Mercury Pacific Marine Lynear Plus PPT MK 851.8 758.1 1.35 1,594.98 46.7 % 23.8 10.6 8.2
Key Indicators
Net cash / (debt) (MYR m): NTA/shr (MYR): Net Gearing (x): (387.4) 0.15 1.0
Historical Chart
1.1 1.0
0.9 0.8
PPT MK Equity
0.7 0.6 0.5 0.4

May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12
Performance: 52-week High/Low
MYR1.04/MYR0.455
1-mth Absolute (%) Relative (%) 5.3 1.2
3-mth (2.2) (3.6)
6-mth 31.9 23.0
1-yr 16.3 14.0
YTD 20.3 16.1
21 June 2012
Page 18 of 26
Oil & Gas - FPSO
INCOME STATEMENT (MYR m) FY Dec Revenue EBITDA Depreciation & Amortisation Operating Profit (EBIT) Interest (Exp)/Inc Associates One-offs Pre-Tax Profit Tax Minority Interest Net Profit Recurring Net Profit Revenue Growth % EBITDA Growth (%) EBIT Growth (%) Net Profit Growth (%) Recurring Net Profit Growth (%) Tax Rate % 2011A 82.4 52.6 (22.0) 30.6 (4.7) (0.0) 0.0 26.9 (3.1) (2.6) 21.3 21.3 9.6% 32.0% 58.9% 107.2% 107.2% 11.5% 2012F 186.3 142.9 (35.8) 107.1 (8.0) 0.0 0.0 101.1 (2.3) (7.9) 91.0 91.0 126.1% 171.5% 249.6% 327.4% 327.4% 2.3% 2013F 187.1 145.9 (36.8) 109.1 (10.8) 0.0 0.0 101.3 0.0 (9.0) 92.3 92.3 0.4% 2.1% 1.9% 1.4% 1.4% 0.0% 2014F 188.1 148.9 (36.8) 112.1 (13.7) 0.0 0.0 101.4 0.0 (9.0) 92.4 92.4 0.5% 2.1% 2.7% 0.1% 0.1% 0.0%
BALANCE SHEET (MYR m) FY Dec Fixed Assets Other LT Assets Cash/ST Investments Other Current Assets Total Assets ST Debt Other Current Liabilities LT Debt Other LT Liabilities Minority Interest Shareholders' Equity Total Liabilities-Capital Share Capital (m) Gross Debt/(Cash) Net Debt/(Cash) Working Capital 2011A 500.8 125.6 40.9 109.8 777.1 116.5 114.9 148.0 24.7 51.0 321.9 777.1 753.8 264.5 223.7 (80.7) 2012F 617.0 278.4 32.2 147.9 1,075.4 120.0 121.1 337.9 0.0 58.9 437.6 1,075.4 851.8 457.9 425.7 (61.0) 2013F 588.2 278.4 162.0 148.2 1,176.8 120.0 121.1 337.9 0.0 67.9 529.8 1,176.8 851.8 457.9 295.9 69.1 2014F 559.4 278.4 291.9 148.6 1,278.2 120.0 121.2 337.9 0.0 76.9 622.2 1,278.2 851.8 457.9 166.0 199.2
CASH FLOW (MYR m) FY Dec Profit before taxation Depreciation Net interest receipts/(payments) Working capital change Cash tax paid Others (incl'd exceptional items) Cash flow from operations Capex Disposal/(purchase) Others Cash flow from investing Debt raised/(repaid) Equity raised/(repaid) Dividends (paid) Interest payments Others Cash flow from financing Change in cash Sources: Company, Maybank IB 2011A 21.3 22.0 4.7 26.7 (3.1) (19.8) 51.8 (0.1) (47.3) 0.7 (46.7) 73.2 (63.7) 0.0 0.0 0.0 9.5 14.7 2012F 91.0 35.8 8.0 (31.9) (2.3) 0.2 100.7 (150.0) 0.0 0.0 (150.0) 193.3 (152.8) 0.0 0.0 0.0 40.5 (8.7) 2013F 92.3 36.8 10.8 (0.2) 0.0 (4.8) 134.8 (5.0) 0.0 0.0 (5.0) 0.0 0.0 0.0 0.0 0.0 0.0 129.8 2014F 92.4 36.8 13.7 (0.3) 0.0 (7.7) 134.9 (5.0) 0.0 0.0 (5.0) 0.0 0.0 0.0 0.0 0.0 0.0 129.9
RATES & RATIOS FY Dec EBITDA Margin % Op. Profit Margin % Net Profit Margin % ROE % ROA % Net Margin Ex. El % Dividend Cover (x) Interest Cover (x) Asset Turnover (x) Asset/Debt (x) Debtors Turn (days) Creditors Turn (days) Inventory Turn (days) Net Gearing % Debt/ EBITDA (x) Debt/ Market Cap (x) 2011A 63.9% 37.2% 25.8% 7.7% 3.5% 25.8% nm 6.5 0.1 2.9 82.2 72.0 na 69.5 5.0 0.4 2012F 76.7% 57.5% 48.8% 24.0% 9.8% 48.8% nm 13.4 0.2 2.3 96.5 67.0 na 97.3 3.2 0.7 2013F 78.0% 58.3% 49.3% 19.1% 8.2% 49.3% nm 10.1 0.2 2.6 133.5 98.2 na 55.8 3.1 0.7 2014F 79.2% 59.6% 49.1% 16.0% 7.5% 49.1% nm 8.2 0.1 2.8 133.4 103.7 na 26.7 3.1 0.7
21 June 2012
Page 19 of 26
Oil & Gas - FPSO
Buy (unchanged)
Yinson Holdings
Rising to the Clouds
Maintain BUY, geared for growth. Yinson has clinched its first FPSO job via a JV with PetroVietnam Technical Services Corporation (PTSC). This adds an estimated MYR27m p.a. to Yinsons earnings over the next decade. We do not rule out Yinson eying further PETRONAS and PetroVietnam contracts, and expanding further in Malaysia. Our sumof-parts (SOP) TP of MYR2.54 offers 18% upside. An emerging floating solutions player. The Yinson-PTSC JV win for the Lam Son FPSO bare-boat charter project worth USD737.3m (MYR2.4b) is noteworthy on multiple fronts. Not only is it Yinsons second floating solution project win, it also marks Yinsons debut as a contractor for PETRONAS and an FPSO operator, and endorses its capabilities in the floating solutions space. It is also a boost to earnings, offering long term earnings visibility and rewarding IRRs. Sailing high, riding on the Asian market. We believe that Yinson is still hungry for a third floating solutions project. Opportunities will arise primarily from the Malaysian and Vietnamese offshore O&G markets. With 6 and 4 FPSO projects respectively, Malaysia and Vietnam house almost half of the 21 upcoming FPSO projects. While Yinsons gearing and the ability to raise financing remains the primary hurdle, we think that Yinsons appetite remains for a third floating solutions contract. 3-year net profit CAGR of 47%, still with upside bias. We expect 18% net profit growth in FY1/13, fuelled by two new AHTS vessels. Earnings will expand at a stronger 55% and 73% in FY1/14-15 respectively, as contributions from its 49%-owned FSO Bein Dong and FPSO Lam Son kick in from 2Q13 and 4Q13 respectively. There is still upside to our forecasts, for we have yet to future contributions from its 40%-owned PTSC Phu My Port. Good growth at a great price. Yinson trades at 9x FY1/14 PER, just 5x FY1/15 PER and 0.3x PEG, a more than reasonable proposition for a small-cap, high-growth stock with the bulk of its earnings locked-in for the next 5-20 years. Our SOP-based TP of MYR2.54 implies a FY1/1415 PER of 6-11x.
Yinson Holdings Summary Earnings Table
FYE Jan (MYR m) Revenue EBITDA Recurring Net Profit Recurring Basic EPS (cents) EPS growth (%) DPS (cents) PER EV/EBITDA (x) Div Yield (%) P/BV(x) YTD 62.5 58.3 Net Gearing (%) ROE (%) ROA (%) Earnings revisions (%) Source: Maybank-IB 2011A 640.8 40.5 18.5 27.1 133.2% 2.1 7.9 8.1 1.0 1.2 148.3 16.3% 5.9% 2012A 715.8 52.9 26.6 35.3 30.3% 2.5 6.1 7.2 1.2 1.0 140.2 19.0% 6.0% 2013F 672.9 66.0 31.3 15.6 (55.7)% 2.5 13.8 13.8 1.2 1.5 172.5 14.4% 4.5% 2014F 685.0 100.6 48.5 24.2 54.8% 2.5 8.9 8.2 1.2 1.3 123.2 16.2% 5.5% 2015F 688.6 117.3 84.0 41.9 73.4% 2.5 5.1 6.2 1.2 1.1 73.8 23.3% 9.6% -
Wong Chew Hann wchewh@maybank-ib.com (603) 2297 8688 Chong Ooi Ming ming.c@maybank-ib.com (603) 2297 8676
Stock Information
Description: Vietnam focused O&G solutions and project manager with 4 core operations: FPS projects, marine vessels, land logistics and port operations. Ticker: Shares Issued (m): Market Cap (US$ m): 3-mth Avg Daily Turnover (US$ m): ST Index: Free float (%): Major Shareholders: Lim Han Weng Bah Kim Lian Liannex Corp Lim Han Joeh YNS MK 200.4 418.7 0.34 1,594.98 44.0 % 33.5 11.6 5.7 5.2
Key Indicators
Net cash / (debt) (MYR m): NTA/shr (MYR): Net Gearing (x): (221.6) 2.10 1.4
Historical Chart
1.9
YNS MK Equity
1.4 0.9 0.4

Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12
Performance: 52-week High/Low 1-mth Absolute (%) Relative (%) 19.4 15.3
MYR2.19/MYR0.94 3-mth 28.2 26.9 6-mth 76.1 67.2 1-yr 93.2 90.9
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INCOME STATEMENT (MYR m) FY Jan Revenue EBITDA Depreciation & Amortisation Operating Profit (EBIT) Interest (Exp)/Inc Associates One-offs Pre-Tax Profit Tax Minority Interest Net Profit Recurring Net Profit Revenue Growth % EBITDA Growth (%) EBIT Growth (%) Net Profit Growth (%) Recurring Net Profit Growth (%) Tax Rate % 2012A 715.8 52.9 (8.9) 44.0 (11.0) 0.0 3.4 32.8 (6.5) (0.3) 26.6 26.6 11.7% 30.5% 33.5% 43.3% 43.3% 20.0% 2013F 672.9 66.0 (15.1) 50.8 (14.1) 0.0 0.0 36.7 (3.9) 1.5 31.3 31.3 (6.0)% 24.6% 15.5% 17.8% 17.8% 10.5% 2014F 685.0 100.6 (32.4) 68.2 (18.2) 3.4 0.0 53.4 (2.1) 2.9 48.5 48.5 1.8% 52.5% 34.3% 54.8% 54.8% 3.8% 2015F 688.6 117.3 (37.7) 79.6 (17.2) 26.8 0.0 89.1 (2.1) 3.0 84.0 84.0 0.5% 16.6% 16.6% 73.4% 73.4% 2.3%
BALANCE SHEET (MYR m) FY Jan Fixed Assets Other LT Assets Cash/ST Investments Other Current Assets Total Assets ST Debt Other Current Liabilities LT Debt Other LT Liabilities Minority Interest Shareholders' Equity Total Liabilities-Capital Share Capital (m) Gross Debt/(Cash) Net Debt/(Cash) Working Capital 2012A 150.0 46.2 30.4 269.8 496.4 179.9 83.3 72.0 3.4 (0.3) 158.1 496.4 75.3 251.9 221.6 37.0 2013F 508.5 46.1 56.4 270.1 881.2 178.1 42.5 357.9 23.5 1.2 278.0 881.2 200.4 536.0 479.5 105.9 2014F 479.3 49.5 79.2 258.2 866.2 176.3 41.7 299.0 23.6 4.1 321.5 866.2 200.4 475.3 396.1 119.4 2015F 444.7 76.3 109.7 246.8 877.6 176.3 40.9 229.1 23.8 7.1 400.5 877.6 200.4 405.4 295.7 139.4
CASH FLOW (MYR m) FY Jan Profit before taxation Depreciation Net interest receipts/(payments) Working capital change Cash tax paid Others (incl'd exceptional items) Cash flow from operations Capex Disposal/(purchase) Others Cash flow from investing Debt raised/(repaid) Equity raised/(repaid) Dividends (paid) Interest payments Others Cash flow from financing Change in cash Sources: Company, Maybank-IB 2012A 32.8 8.9 (11.0) (53.4) (6.5) 22.7 (6.6) (3.3) 4.1 0.0 0.8 22.0 11.2 (1.4) (11.0) 11.0 31.8 26.0 2013F 36.7 15.1 (14.1) (4.2) (3.9) 28.2 57.9 (338.2) 0.0 (76.5) (414.8) 284.0 116.8 (3.8) (14.1) 0.0 383.0 26.1 2014F 53.4 32.4 (18.2) 11.1 (2.1) 33.1 109.6 (3.0) 0.0 0.0 (3.0) (60.7) 0.0 (5.0) (18.2) 0.0 (83.9) 22.7 2015F 89.1 37.7 (17.2) 10.5 (2.1) 7.7 125.7 (3.0) 0.0 0.0 (3.0) (69.9) 0.0 (5.0) (17.2) 0.0 (92.2) 30.6
RATES & RATIOS FY Jan EBITDA Margin % Op. Profit Margin % Net Profit Margin % ROE % ROA % Net Margin Ex. El % Dividend Cover (x) Interest Cover (x) Asset Turnover (x) Asset/Debt (x) Debtors Turn (days) Creditors Turn (days) Inventory Turn (days) Net Gearing % Debt/ EBITDA (x) Debt/ Market Cap (x) 2012A 7.4% 6.1% 3.7% 19.0% 6.0% 3.7% 14.1 (4.0) 1.4 2.0 123.1 44.2 0.3 140.2 4.8 0.6 2013F 9.8% 7.6% 4.7% 14.4% 4.5% 4.7% 6.3 (3.6) 0.8 1.6 135.8 52.8 0.3 172.5 8.1 1.3 2014F 14.7% 10.0% 7.1% 16.2% 5.5% 7.1% 9.7 (3.7) 0.8 1.8 130.3 51.0 0.3 123.2 4.7 1.1 2015F 17.0% 11.6% 12.2% 23.3% 9.6% 12.2% 16.8 (4.6) 0.8 2.2 123.4 51.0 0.3 73.8 3.5 1.0
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RESEARCH OFFICES
REGIONAL
P K BASU Regional Head, Research & Economics (65) 6432 1821 pk.basu@maybank-ke.com.sg WONG Chew Hann, CA Acting Regional Head of Institutional Research (603) 2297 8686 wchewh@maybank-ib.com THAM Mun Hon Regional Strategist (852) 2268 0630 thammunhon@kimeng.com.hk ONG Seng Yeow Regional Products & Planning (852) 2268 0644 ongsengyeow@maybank-ke.com.sg
ECONOMICS
Suhaimi ILIAS Chief Economist Singapore | Malaysia (603) 2297 8682 suhaimi_ilias@maybank-ib.com Luz LORENZO Economist Philippines | Indonesia (63) 2 849 8836 luz_lorenzo@maybank-atrke.com
MALAYSIA
WONG Chew Hann, CA Head of Research (603) 2297 8686 wchewh@maybank-ib.com Strategy Construction & Infrastructure Desmond CHNG, ACA (603) 2297 8680 desmond.chng@maybank-ib.com Banking - Regional LIAW Thong Jung (603) 2297 8688 tjliaw@maybank-ib.com Oil & Gas Automotive Shipping ONG Chee Ting (603) 2297 8678 ct.ong@maybank-ib.com Plantations Mohshin AZIZ (603) 2297 8692 mohshin.aziz@maybank-ib.com Aviation Petrochem Power YIN Shao Yang, CPA (603) 2297 8916 samuel.y@maybank-ib.com Gaming Regional Media Power WONG Wei Sum, CFA (603) 2297 8679 weisum@maybank-ib.com Property & REITs LEE Yen Ling (603) 2297 8691 lee.yl@maybank-ib.com Building Materials Manufacturing Technology LEE Cheng Hooi Head of Retail chenghooi.lee@maybank-ib.com Technicals
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Michael KOKALARI, CFA Head of Research +84 838 38 66 47 michael.kokalari@kimeng.com.vn Strategy Nguyen Thi Ngan Tuyen +84 844 55 58 88 x 8081 tuyen.nguyen@kimeng.com.vn Food and Beverage Oil and Gas Ngo Bich Van +84 844 55 58 88 x 8084 van.ngo@kimeng.com.vn Banking Nguyen Quang Duy +84 844 55 58 88 x 8082 duy.nguyenquang@kimeng.com.vn Rubber Dang Thi Kim Thoa +84 844 55 58 88 x 8083 thoa.dang@kimeng.com.vn Consumer Nguyen Trung Hoa +84 844 55 58 88 x 8088 hoa.nguyen@kimeng.com.vn Steel Sugar Macro
HONG KONG / CHINA

Edward FUNG Head of Research (852) 2268 0632 edwardfung@kimeng.com.hk Construction Ivan CHEUNG (852) 2268 0634 ivancheung@kimeng.com.hk Property Industrial Ivan LI (852) 2268 0641 ivanli@kimeng.com.hk Banking & Finance Jacqueline KO (852) 2268 0633 jacquelineko@kimeng.com.hk Consumer Staples Andy POON (852) 2268 0645 andypoon@kimeng.com.hk Telecom & equipment Samantha KWONG (852) 2268 0640 samanthakwong@kimeng.com.hk Consumer Discretionaries Alex YEUNG (852) 2268 0636 alexyeung@kimeng.com.hk Industrial Catherine CHAN (852) 2268 0631 catherinechan@kimeng.com.hk Cement Anita HWANG, CFA | Jacky WONG, CFA anitahwang@kimeng.com.hk | jackywong@kimeng.com.hk (852) 2268 0142 | (852) 2268 0107 Special Situations Quants
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Katarina SETIAWAN Head of Research (62) 21 2557 1125 ksetiawan@kimeng.co.id Consumer Strategy Telcos Lucky ARIESANDI, CFA (62) 21 2557 1127 lariesandi@kimeng.co.id Base metals Coal Oil & Gas Rahmi MARINA (62) 21 2557 1128 rmarina@kimeng.co.id Banking Multifinance Pandu ANUGRAH (62) 21 2557 1137 panugrah@kimeng.co.id Auto Heavy equipment Plantation Toll road Adi N. WICAKSONO (62) 21 2557 1130 anwicaksono@kimeng.co.id Generalist Anthony YUNUS (62) 21 2557 1134 ayunus@kimeng.co.id Cement Infrastructure Property Arwani PRANADJAYA (62) 21 2557 1129 apranadjaya@kimeng.co.id Technicals
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Luz LORENZO Head of Research +63 2 849 8836 luz_lorenzo@maybank-atrke.com Strategy Laura DY-LIACCO (63) 2 849 8840 laura_dyliacco@maybank-atrke.com Utilities Conglomerates Telcos Lovell SARREAL (63) 2 849 8841 lovell_sarreal@maybank-atrke.com Consumer Media Cement Mining Kenneth NERECINA (63) 2 849 8839 kenneth_nerecina@maybank-atrke.com Conglomerates Property Ports/ Logistics Katherine T AN (63) 2 849 8843 kat_tan@maybank-atrke.com Banks Construction Ramon ADVIENTO (63) 2 849 8842 ramon_adviento@maybank-atrke.com
21 June 2012
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Mining
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Oil & Gas - FPSO APPENDIX I: TERMS FOR PROVISION OF REPORT, DISCLAIMERS AND DISCLOSURES
DISCLAIMERS This research report is prepared for general circulation and for information purposes only and under no circumstances should it be considered or intended as an offer to sell or a solicitation of an offer to buy the securities referred to herein. Investors should note that values of such securities, if any, may fluctuate and that each securitys price or value may rise or fall. Opinions or recommendations contained herein are in form of technical rating s and fundamental ratings. Technical ratings may differ from fundamental ratings as technical valuat ions apply different methodologies and are purely based on price and volume-related information extracted from the relevant jurisdictions stock exchange in the equity analysis. Accordingly, investors returns may be less than the original sum invested. Past performance is not necessarily a guide to future performance. This report is not intended to provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the particular needs of person s who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report. The information contained herein has been obtained from sources believed to be reliable but such sources have not been independently verified by Maybank Investment Bank Berhad, its subsidiary and affiliates (collectively, MKE) and consequently no representation is made as t o the accuracy or completeness of this report by MKE and it should not be relied upon as such. 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DISCLOSURES
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Disclosure of Interest
Malaysia: MKE and its Representatives may from time to time have positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and other services for or relating to those companies. Singapore: As of 21 June 2012, Maybank KERPL and the covering analyst do not have any interest in any companies recommended in this research report. Thailand: MBKET may have a business relationship with or may possibly be an issuer of derivative warrants on the securities /companies mentioned in the research report. Therefore, Investors should exercise their own judgment before making any investment decisions. MBKET, its associates, directors, connected parties and/or employees may from time to time have interests and/or underwriting commitments in the securities mentioned in this report. Hong Kong: KESHK may have financial interests in relation to an issuer or a new listing applicant referred to as defined by the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. As of 21 June 2012, KESHK and the authoring analyst do not have any interest in any companies recommended in this research report. MKE may have, within the last three years, served as manager or co-manager of a public offering of securities for, or currently may make a primary market in issues of, any or all of the entities mentioned in this report or may be providing, or have provided within the previous 12 m onths, significant advice or investment services in relation to the investment concerned or a related investment.
OTHERS
Analyst Certification of Independence The views expressed in this research report accurately reflect the analysts personal views about any and all of the subject securities or issuers; and no part of the research analysts compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expre ssed in the report. Reminder Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions an d volatility and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct its own analysis of the product and consult with its own professional advisers as to the risks involved in making such a purchase. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior consent of MKE.
Definition of Ratings
Maybank Kim Eng Research uses the following rating system: BUY HOLD SELL Total return is expected to be above 15% in the next 12 months Total return is expected to be between -15% to +15% in the next 12 months Total return is expected to be below -15% in the next 12 months
Applicability of Ratings The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investment ratings are only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not carry investment ratings as we do not actively follow developments in these companies.
Some common terms abbreviated in this report (where they appear):

Adex = Advertising Expenditure BV = Book Value CAGR = Compounded Annual Growth Rate Capex = Capital Expenditure CY = Calendar Year DCF = Discounted Cashflow DPS = Dividend Per Share EBIT = Earnings Before Interest And Tax EBITDA = EBIT, Depreciation And Amortisation EPS = Earnings Per Share EV = Enterprise Value FCF = Free Cashflow FV = Fair Value FY = Financial Year FYE = Financial Year End MoM = Month-On-Month NAV = Net Asset Value NTA = Net Tangible Asset P = Price P.A. = Per Annum PAT = Profit After Tax PBT = Profit Before Tax PE = Price Earnings PEG = PE Ratio To Growth PER = PE Ratio QoQ = Quarter-On-Quarter ROA = Return On Asset ROE = Return On Equity ROSF = Return On Shareholders Funds WACC = Weighted Average Cost Of Capital YoY = Year-On-Year YTD = Year-To-Date
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Malaysia
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Maybank Kim Eng Securities Pte Ltd Maybank Kim Eng Research Pte Ltd 9 Temasek Boulevard #39-00 Suntec Tower 2 Singapore 038989 Tel: (65) 6336 9090 Fax: (65) 6339 6003
London
Maybank Kim Eng Securities (London) Ltd 6/F, 20 St. Dunstans Hill London EC3R 8HY, UK Tel: (44) 20 7621 9298 Dealers Tel: (44) 20 7626 2828 Fax: (44) 20 7283 6674
New York
Maybank Kim Eng Securities USA Inc 777 Third Avenue, 21st Floor New York, NY 10017, U.S.A. Tel: (212) 688 8886 Fax: (212) 688 3500
Stockbroking Business:
Hong Kong
Kim Eng Securities (HK) Ltd Level 30, Three Pacific Place, 1 Queens Road East, Hong Kong Tel: (852) 2268 0800 Fax: (852) 2877 0104
Indonesia
PT Kim Eng Securities Plaza Bapindo Citibank Tower 17th Floor Jl Jend. Sudirman Kav. 54-55 Jakarta 12190, Indonesia Tel: (62) 21 2557 1188 Fax: (62) 21 2557 1189
India
Kim Eng Securities India Pvt Ltd 2nd Floor, The International 16, Maharishi Karve Road, Churchgate Station, Mumbai City - 400 020, India Tel: (91).22.6623.2600 Fax: (91).22.6623.2604
Philippines
Maybank ATR Kim Eng Securities Inc. 17/F, Tower One & Exchange Plaza Ayala Triangle, Ayala Avenue Makati City, Philippines 1200 Tel: (63) 2 849 8888 Fax: (63) 2 848 5738
Thailand
Maybank Kim Eng Securities (Thailand) Public Company Limited 999/9 The Offices at Central World, 20th - 21st Floor, Rama 1 Road Pathumwan, Bangkok 10330, Thailand Tel: (66) 2 658 6817 (sales) Tel: (66) 2 658 6801 (research)
Vietnam
In association with
Saudi Arabia
In association with
Kim Eng Vietnam Securities Company 1st Floor, 255 Tran Hung Dao St. District 1 Ho Chi Minh City, Vietnam Tel : (84) 838 38 66 36 Fax : (84) 838 38 66 39
Anfaal Capital Villa 47, Tujjar Jeddah Prince Mohammed bin Abdulaziz Street P.O. Box 126575 Jeddah 21352 Tel: (966) 2 6068686 Fax: (966) 26068787
South Asia Sales Trading
Connie TAN connie@maybank-ke.com.sg Tel: (65) 6333 5775 US Toll Free: 1 866 406 7447
North Asia Sales Trading
Eddie LAU eddielau@kimeng.com.hk Tel: (852) 2268 0800 US Toll Free: 1 866 598 2267 www.maybank-ke.com | www.kimengresearch.com.sg
21 June 2012
Page 26 of 26

FSPO

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PP16832/01/2013 (031128)

Oil & Gas

Summary of companies (calendarised)

SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS

Oil & Gas - FPSO

Fundamental outlook and prospects

O&G: Production cost and type of field development

100 Deepwater & Ultra Deepwater 80

High price 150 100

Current hurdle rate~ USD55

40 20 Prod uced 0 Middle Other East Conventional

Sources: IEA, Maybank-IB

Sources: Infield Systems Limited, Maybank-IB

Trend of FPSOs in service or available

FPSO fleet utilization rate and idle units

Average utilisation rate: 94%

146 6 144 6 139 117 3 4 5 108 5 104 3 90 79 83 2 3 62 67 63 1 1 48 2 1 1 43 27 29 33 17 20 21 23 90 92 94 96 98 00 02 04 06 08 10

Sources: International Maritime Associates, Upstream, Maybank-IB

Sources: International Maritime Associates, Upstream, Maybank-IB

Oil & Gas - FPSO Global E&P spending

Sources: Barclays Capital, Maybank-IB

Snapshot of FPSO contract characteristics

FPSO contract awards

USD 0.82b capex

3-4 years construct -ion

2-3 years construct -ion

At least USD5m capex

3-12 months upgrade

Oil & Gas - FPSO

.is supported by lengthening (firm) tenures

Average capex per vessel

Sources: International Maritime Associates, Upstream, Maybank-IB 21 June 2012

Sources: International Maritime Associates, Upstream, Maybank-IB Page 4 of 26

Oil & Gas - FPSO

FPSO contracts awarded YTD from 2009

Oil & Gas - FPSO

Snapshot of FPSOs currently deployed

Sources: International Maritime Associates Inc, Upstream, Maybank-IB

Idle FPSOs available for hire

Sea Production/ Rubicon Bluewater Ezra/EOC Petrofac SBM Noble ConocoPhillips

Conversion Conversion Conversion Conversion Conversion Newbuild Conversion

Sources: International Maritime Associates Inc, Upstream, Maybank-IB

Oil & Gas - FPSO

South East Asia 1 1

Speculative units without contracts in hand

Number of FPSOs to be redeployed per region

Sources: International Maritime Associates Inc, Maybank-IB 21 June 2012 Page 7 of 26

Oil & Gas - FPSO

FPSO outlook - positive

FPSO: Supply and demand

Idle units re employed

Oil & Gas - FPSO

Capex (USDb) 1.20 0.80

0.60 0.25 0.30

14.4 0.8 0.9

17.4 0.8 1.2

20.4 0.8 1.5

10.0 1.7 65.4

13.6 2.1 75.1

16.8 2.7 84.6

Sources: International Maritime Associates Inc, Maybank-IB 21 June 2012 Page 9 of 26

36 Base scenario: USD 90-110 oil

38 High: scenario: USD 110-150 oil