Steel Hawk optimistic about the future of the oil and gas industry
KUALA LUMPUR: Oil and gas services and equipment provider Steel Hawk Bhd is optimistic about the future of the oil and gas (O&G) industry and expects it to remain strong over the next 50 years.
However, Deputy Chairman and Managing Director Datuk Sharman K. Michael said that due to the nature of its business, the company’s operations would not be significantly affected by fluctuations in production and prices of crude oil and gas.
“Combined with our long-term contracts, we will be able to generate sustainable revenue,” he said at a press conference on Friday following the release of Steel Hawk’s prospectus in connection with the transfer of its listing from Bursa Malaysia’s LEAP market to the ACE market.
Steel Hawk aims to raise RM13.5 million through the transfer scheduled for September 5.
Steel Hawk is involved in the provision of onshore and offshore support services to the oil and gas industry. Its core competencies lie in engineering, procurement, construction and commissioning (EPCC), maintenance of surface oil and gas facilities, installation and maintenance of oilfield equipment and supply of oilfield equipment.
Steel Hawk serves customers in the upstream, midstream and downstream sectors of the O&G value chain.
Sharman said the delisting will give the company access to a broader fundraising platform to support its expansion plans and accelerate long-term growth initiatives.
“The outlook for the Malaysian oil and gas industry is positive and Steel Hawk is well positioned to capitalise on future opportunities.
“We expect an increase in potential contracts that will enable us to expand our market share and improve our financial performance. Our ongoing efforts to enhance our capabilities will solidify our position as a leading player in the industry.”
Of the RM13.5 million raised from the transfer of listing, RM7 million (51.85%) will be used to increase the overall manufacturing capacity five-fold, from approximately 13 tonnes to approximately 65 tonnes per month, through the construction of an additional manufacturing facility in Kemaman, Terengganu (Teluk Kalung Facility 2).
“The Teluk Kalung Plant 2 will enable us to overcome space constraints that previously prevented us from manufacturing structures longer than six metres, and reduce our dependence on subcontractors for manufacturing work.
“This will enable us to optimise the lead times of our EPCC services and achieve further cost savings. The new facility will enable us to carry out more manufacturing activities, as well as blasting and painting work, among other things,” said Sharman.
He added that Steel Hawk is looking to extend its EPCC and asset improvement/maintenance services to the renewable energy industry, particularly solar energy infrastructure and hydropower. In addition, the company plans to provide integrated connection and commissioning (HUC) services to connect the O&G infrastructure.
“Onshore HUC services would include manufacturing services, assembly, system integration and commissioning of components and systems, while offshore HUC services would include transportation and installation (T&I), installation of manufactured components, connection services and commissioning.”
Sharman said RM2 million (14.81%) of the proceeds will be used to finance working capital through the purchase of raw materials such as piping, fittings and structures. “In addition, we will allocate RM1 million (7.41%) for bank loan repayment, while the remaining RM3.50 million (25.93%) will be used to cover remittance costs.”
UOB Kay Hian Securities (M) Sdn Bhd is the lead adviser, sponsor, underwriter and placement agent for the transfer of listing of Steel Hawk.
