KUALA LUMPUR (July 15): Reservoir Link Energy Bhd is confident that it can deliver and continue to see business during the current challenging oil and gas (O&G) environment. 

Reservoir Link Executive Director Thien Chiet-Chai said the O&G market has stabilised.

Reservoir Link is a provider of oil and gas (O&G) well services that supports operators in the upstream segment of the O&G industry.

“I think the oil market has been stabilised. If you look at the oil price, it has stabilised over the last few weeks. Our services are in production and end of life wells, it is not exploitation or development.

"Right now operators will slowdown on the drilling of new wells, but all existing wells need to be maintained. So we are actively participating on contracts.We foresee that Petronas and other  Pan Malaysia Petroleum Arrangement Contractors' (PAC) operators still need to maintain their wells, the bulk of our business is in the maintenance of the wells,” said Thien at a press conference after its ACE market listing today. 

He added that the group was expecting to maintain its financial year ending Dec 31, 2019 (FY19)’s profit after tax (PAT) of RM9.68 million. 

Thien noted that while the Covid-19 pandemic has had an impact in terms of contract postponements, none of its contracts have been cancelled as a result of the economic impact of the virus. 

“The longest suspension is in Mauritania, where we should resume early next year,” Thien said. 

When quizzed on whether it’s gross profit margin of 25.83% was realistic moving forward, Thien said that it was a historical figure that the group has achieved. 

The O&G firm made its ACE market debut today, and as of 9:41 am, its share went unchanged at 50.5 sen with 92.73 million shares traded. 

When asked if the group was looking to migrate to Bursa Malaysia’s main board both Thien and Chief Executive Officer and Managing Director Datuk Wan Hassan Mohd Jamil both said the group would look at migrating to the main board, but gave no timeline. 

When asked on its orderbook, Thien said all of its contracts are call up umbrella contracts - which have no fixed value.

He noted while there is no fixed value for the contracts they should last it for at least next 12 to 18 months, while noting it is actively participating in tenders. 

When asked about who are it’s direct competitors, Thien said it’s listed competitors were Deleum Bhd and Uzma Bhd.

The group’s initial public offering (IPO) saw it issue 88.13 million shares at 41 sen a piece. 

The IPO would raise RM23.42 million - of which RM10 million would go to the purchase of well testing equipment. 

RM4.92 million would be used for working capital, RM5 million for bank borrowings and the rest earmarked for listing expenses.