By Khairie Hisyam
Sumatec Resources saw much interest today after striking oil in Kazakhstan, with its traded volume for the day amounting to more than 60% of its total share base.
Earlier today Sumatec announced that oil production from the Shelly Oil Field — also known as the Rakushechnoye Oil Field — Kazakhstan commenced last Saturday with production levels hovering around 150 barrels per day.
“Oil production at the second well will follow in about two weeks’ time as planned,” said Sumatec on Bursa Malaysia.
The announcement follows on from a Bursa announcement last Friday that oil production from Rakushechnoye is anticipated to commence “in the near future”, which was in response to a report in NanYang Siang Pau about the oil field on the same day.
Sumatec had previously said that it will enjoy the entire profits from the first two million barrels of oil produced from Shelly oil field, while profits from subsequent production will be split equally in accordance to its joint investment agreement (JIA) with Markmore Energy Labuan Ltd and CaspiOilGas LLP.
The JIA allows Sumatec to partake in the development and production of oil and gas in Kazakhstan until 2025 and the company has invested an initial RM304.52 million in diversifying its business to include upstream oil and gas activities at Shelly oil field.
“Our vision is to be a leading oil and gas counter in Malaysia in the next five years,” chief executive officer Chris Dalton said last June.
As at 5pm, the total shares turnover for Sumatec stood at 135.7 million shares, which represents about 63.3%% of its total share base. This makes Sumatec the top active counter for the day, ahead of XiDeLang whose volume stood at 57 million shares traded.
In comparison, the average traded volume for Sumatec over the past three months is about 58.1 million shares or about 27% of its total number of shares. The company’s total market capitalisation is estimated to be around RM64.31 million.
Strangely however the PN17-category company’s share price did not move much compared to its unusually high volume with the day’s price movement ranging from its opening price of 30 sen to a day’s high of 32 sen per share.
The apparent interest in the company today comes despite the poor financial position of Sumatec whose shareholders’ funds stand in the negative territory — as at Sept 30, 2013, the total accumulative losses stood at of RM182.29 million against share capital of RM30.57 million.
Its results for 3Q13 ending Sept 30, 2013 saw RM6.13 million in net losses from zero revenue, an improvement from a net loss of RM11.34 million the previous corresponding quarter which also saw zero revenue for the company.
Year-to-date, Sumatec has accumulated RM15.3 million in net loss for 9M13 without any revenue recorded, although this is an improvement over RM41.49 million in net loss recorded for 9M12 which saw a small revenue of RM85,000.
As at Sept 30, 2013, Sumatec has RM330,000 in cash and RM549.11 million of assets classified as held for sale against RM635.92 million in short-term liabilities.
However, Sumatec had been given the go-ahead by Bursa Malaysia for its regularisation plan on April 10, 2013 and its shareholders approved the plan in June last year.
The plan includes among others proposed issuance of shares and rights issue with warrants as well as a scheme of arrangement with creditors, in addition to hiving off some of its holdings.
“The rights issue was fully subscribed and the company expects to complete this restructuring plan on Nov 21, 2013,” said Sumatec, which had previously stated its intention to exit PN17 category by 2Q14.
Major shareholder Halim Saad said the company would be debt-free following the completion of its restructuring exercise.
Sumatec closed Monday’s trading session at 30 sen, down half a sen.
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