Will CH Offshore get a slice of the Gorgon pie? Wait long long?  

Gorgon Project Overview - Producing Liquefied Natural Gas in Australia

http://www.youtube.com/watch?v=151bPmYGGzg&feature=PlayList&p=2A6108CEEED81919&index=0&playnext=1

tankuku      ( Date: 25-Sep-2009 19:53) Posted: Bussiness Time Published September 18, 2009 Offshore sector counters come into play   By VINCENT WEE   THE announcement that the massive Gorgon gas project off western Australia has received regulatory approval gives a chance for investors in Singapore to turn their attention to other offshore sector players here besides the two big local rigbuilders.   This project is the world's biggest new liquefied natural gas development and Chevron and its partners in the field, ExxonMobil and Royal Dutch Shell, are investing US$37 billion in developing it. Malaysian oil and gas (O&G) counters have already run up earlier this week in the wake of the news as have some of the Singapore players in the sector. But there are fewer pure offshore services and construction plays on the Singapore Exchange (SGX), compared to Malaysia which tends to have more specialised companies. DMG and Partners yesterday said that local company that is making inroads is marine logistics and support services provider were poised to benefit from an improving offshore and marine climate. One possible beneficiaries of the project include component makers and suppliers such as CH Offshore and Technics Oil and Gas. Offshore logistics provider CH Offshore hit a year-high of 69.5 cents on Wednesday after jumping 12 per cent the previous day on an upgrade by DBS which initiated coverage of what it called a 'deeply undervalued' stock with a 'buy' rating and a 12-month price estimate of 89 cents.

It may benefit from the Australia gordon project.

CH OFFSHORE LTD (CHO) is a dynamic offshore service provider that provides a wide range of services to the offshore oil and gas industry.

To cater for the exploration and production of oil and gas in both shallow and deep waters, CHO has a fleet of Anchor-handling Tug/Supply (AHTS) vessels with Bollard Pull ranging from 50 Tonnes to 150 Tonnes.

Our latest acquisitions are the Japan-Design-and-Built Dynamic Positioning AHTS vessels rated at 12,240 brake horsepower. These state-of-the-art vessels are well poised to work in remote and deeper water depths worldwide.

CHO embraces the Health, Safety and Environmental Management System (HSE MS); which is modelled after the OGP (International Association of Oil and Gas Producers) guidelines adopted by many oil majors in the world. This HSE MS forms the bedrock to our safety management system and act as a guiding beacon to the safe operation and management of our fleet of vessels.

CH Offshore

• Future dividend payouts to rise as free cash flow is estimated to increase to 8.5 US cents per share in FY11.
• Sustained undervaluation vs. listed peers could trigger M&A interest.
• 58% upside to our target price of S$0.89, at 9x blended FY10/11 PE (FYE June).
• Initiate coverage on CH Offshore with a BUY.
• AHTS fleet with deepwater focus. CH Offshore (CHO) owns and operates eight small AHTS (<8,000 bhp) and five large AHTS (>12,000 bhp) as of end FY09 (FYE June). CHO will increase its fleet of large AHTS to seven by end FY10.

Strong free cash flows amidst steady earnings growth.
We project CHO’s free cash flow per share to rise to 8.5 US cents in FY11 (or equivalent to c.22% of current share price), vs. 2.5 US cents in FY09 and an estimated 1.1 US cents in FY10. This is due to: 1) Non-existence of committed capex after FY10, and 2) our forecast of 7% net profit CAGR in the FY10-11 forecast periods.

6.5% current FY10 dividend yield.
We expect CHO to have 40% dividend payout, vs. recurring net profits, in the FY10-11 forecast periods. The 22% dividend payout in FY09 amidst uncertain economic condition is an anomaly.

Sustained undervaluation could trigger M&A interest.
CHO now trades at 6x recurring FY10 PE (FYE June), vs. 9x average PE for the small-mid cap offshore service providers in our coverage. CHO is also not seen as a core holding for Chuan Hup, its second largest shareholder. Hence, in our opinion, an undervalued CHO may be an attractive M&A target for global AHTS owners, including John Fredriksen’s Deep Sea Supply (which has close to a 5% stake in CHO).

Initiate coverage with BUY.
Our fair value for CHO is S$0.89, based on 9x blended recurring FY10/11 PE (FYE June). This gives around 58% potential upside from current price. We initiate coverage on CHO with a BUY rating.

oh ....... this fellow running up quite alot these few days, today kena shot down le ........

not only this stock, C2O & Ramba also down today .....

by the way, C2O just announce placement share:

PLACEMENT OF UP TO 128,000,000 NEW ORDINARY SHARES IN THE SHARE CAPITAL OF C2O HOLDINGS LIMITED – ISSUE AND ALLOTMENT OF PLACEMENT SHARES  

Check it out in SGX