Barefoot Investor: Malaysia shares Dialog advances on marginal reserves foray

DIALOG GROUP BHD shares rose on Wednesday, Aug 17 after the company made its foray into the development and production of marginal hydrocarbon reserves in Malaysia following its joint venture (JV) securing a contract from Petroliam Nasional Bhd.

At 9.45am, Dialog rose four sen to RM2.71 with 3.98 million shares traded.

Dialog and its partners Roc Oil and Petronas Carigali clinched a 15-year Petronas contract worth up to US$950m to develop the Balai cluster fields.

CIMB Research in a note Aug 17 said it not surprised that Dialog landed its first-ever upstream venture but was positively surprised by Petronas Carigali’s involvement in this 2-phase project.

The research house left its forecasts unchanged as it had imputed CONSTRUCTION [] contributions during the pre-development phase.

CIMB Research said commercial production would start 24 months after commencement, i.e. beyond its forecast period.

“Our SOP-based target price rises from RM3.21 to RM3.48 as we apply a 40% premium to the businesses that we previously valued at 20% premium over our 14.5x target market P/E.

“This puts their valuations on par with those of larger O&G companies. Dialog remains an OUTPERFORM, with the potential share price triggers being this contract and the Rapid project,” it said. (


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