Wintermar acquires new vessel despite tough times
Thursday, February 4 2016 - 12:56 AM WIB
?She is chartered to a multinational oil and gas company working in the Natuna area for a 5 year contract,? Wintermar said in a statement Wednesday. The vessel is funded through a combination of internal cash and bank financing from a foreign bank, it added.
Wintermar said since late 2015 there has been a pick up in activity, albeit from a very low base. ?Some projects have started or are starting this year, like Husky CNOOC, Santos, Petronas and Pertamina. However, activity is still at a very low level compared to the peak in 2013,? the company explained. Rates have continued to be under pressure due to oversupply of vessels and a negative outlook for oil. ?So far the 1st quarter has started with an expectation of better utilization but at lower rates.?
The company said that in the short term, there is a lack of visibility because there are many considerations: OPEC's unwillingness to reduce production; the possibility of more high cost producers going out of business; Iran's ramp up in oil production; China's slowdown in economic growth and how long that will last; and in Indonesia, government regulation and the willingness to improve terms for the oil contractors to attract investment in oil.
The company, however, said that in Indonesia, there are glimmers of optimism as some of the development projects which were put on hold since 2014 seem to be starting activity again. Upstream authority SKK Migas and state owned oil and gas firm PT Pertamina have indicated an increase in upstream spending in 2016 compared to 2015, with projections for some new output coming onstream in 2018-2019 underpinning activity.
?We will continue selective vessel sales where possible, even at a book loss, to raise cash for reserves,? Wintermar said. The outstanding bank debt at end December 2015 was US$ 121 million, due for repayment between 2016 and 2021, and the group's Gearing ratio is approximately 63 percent. ?We have secured a working capital financing line for up to US$ 10 million. Our Capex spend in 2015 was reduced to $13 million from an initial plan of $50 million and we expect to spend $6 million in 2016.?
The company said that at the end of December 2015 its total contracts on hand totaled $190 million.
Editing by Reiner Simanjuntak