KUALA LUMPUR, Sept 9 — Maybank Investment Bank (IB) Research has maintained its “buy” call on UMW Oil and Gas Corporation Bhd (UMWOG) with a 32 per cent higher target price of RM5.15 due to the upbeat prospects of the jack-up drilling market in Southeast Asia.

The research house said UMWOG is set to capitalise on the prospects of the region’s upbeat jack-up drilling market over a five-year horizon given its sound financials and operating acumen.

“We expect UMWOG to grow its rig assets beyond Naga 8. While it has indicated one new jack-up rig addition every year from 2016, we reckon the pace of growth could intensify, subject to market demand. 

“The fundamentals for jack-up rigs are strong, underpinned by rising drilling activities in the region, strong demand for new and premium rigs as well as the intensive replacement cycle,” it said in a note today. 

Meanwhile, Hong Leong IB Research said the oil and gas company’s net gearing was expected to remain comfortable at 0.4 times by year-end, which would still provide room for asset acquisitions.

“We maintain a ‘hold’ rating on the stock with a RM4.12 target price,” it added.

As at lunch break, UMWOG was traded 3.0 sen better at RM3.92 on Bursa Malaysia with 2.38 million shares transacted. — Bernama