Apart from normal business risk, I believe OXX is onto a winner. The pluses far outweigh any minus.
The contractor is Ophir Production Sdn Bhd (OPSB), which comprises Octanex and the Malaysian companies Scomi Energy and Vestigo Petroleum. Octanex holds a 50% interest in OPSB, with Scomi and Vestigo holding 30% and 20% respectively.
OPSB is a separate entity to OXX and it rises or falls separate to OXX. (PLUS)
Vestigo is a Petronas wholly owned subsidiary. (PLUS)
Scomi Energy Services Bhd (formerly known as Scomi Marine Bhd), listed on the Main Board of Bursa Malaysia, is a subsidiary of Scomi Group Bhd providing services to the oil and gas, and coal industries. Combining the skills and technology of each of their core businesses, in the oilfield services, offshore support vessels, marine logistics and production enhancement technology, they provide their clients with comprehensive integrated upstream drilling services and solutions. (PLUS)
The public statements are that the development is a low risk development concept that will see first oil expected in 18 months. This development concept involves three production wells, a single wellhead and production platform and the export and storage of oil via a Floating Storage and Offloading Unit. (PLUS)
If the RSC gets up and running on schedule, other RSCs from Petronas could be picked up as a preferred contractor. Petronas apparently has many of these small fields ready to be exploited and Petronas has decided that RSCs are the preferred development. For a company like OXX this could mean a whole new income stream. (PLUS)
Someone recently wrote in this forum the market has not viewed the move positively. What needs to be remembered is that there is not a true market for OXX shares, there is very limited liquidity with very few buyers and sellers.
IMO, DYOR etc
OXX Price at posting:
13.0¢ Sentiment: Buy Disclosure: Held
