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Mero - 3 FPSO project in Brazil is going to lift MISC revenue
$MISC (3816.MY)$ I like to pickup shares that is undervalued. One particular stock that has come under my value crosshair is MISC Bhd. Their venture into offshore FPSO business is bearing fruits and it is a major money earner. Current closing price for MISC, Friday 25th Oct today is 7.46/unit. Excellent!
One of the FPSO vessel for the Mero-3 project is provided by MISC Berhad. MISC has been contracted by Petrobras to supply the floating production, storage, and offloading (FPSO) vessel for this significant deep-water project in the Santos Basin, Brazil.
Mero 3, as it is known colloquially, is currently operational since September 2024 and has the capacity to produce 180,000 barrels of oil and compress 12 million cubic metres of gas per day. It will increase the overall production of the Mero Field to 590,000 barrels of oil per day.
FPSO vessel build by MISC is a very large vessel that can garner a daily charter rate of USD800k/day (estimated) which is equivalent to the income of 12 LNG carriers or 20 petroleum tankers. That is certainly impressive by any standard, to be able to charge this daily amount for the next 22 years!
Under the contract, the MISC FPSO has a 22.5-year firm charter period from the date of final acceptance by client Petrobras.
In short, MISC has hit the jackpot and with the success of delivering Mero 3 FPSO vessel, they will be hunting for a few more FPSO business in 2025. This will sit well with MISC shareholders. Very Nice!
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StockTrooper : thank you for this insight
Value Hunter OP StockTrooper : MISC Berhad currently operates 12 Floating Production, Storage, and Offloading (FPSO) vessels. The jackpot is Mero-3 FPSO. The FPSO is engineered for a 30-year operational lifespan without the need for dry docking, according to MISC Berhad. MISC build it and lease it to Petrobas to operate.The best part that was not highlighted before, it is forecast 60% of the world future FPSO contracts will originate from Brazil and Suriname.
Value Hunter OP : There are approximately 220 FPSO vessels currently in operation, on order, or available worldwide. The forecast for FPSO contracts between 2021 and 2025 indicates that Brazil and Guyana/Suriname will account for more than 60% of the FPSO contracts awarded during this period. MISC has a proven track record to deliver a very large FPSO for an international company like Petrobras. The opportunity for future wins are there.
102324582 : if the future earning are so good,why investor including EPF keep selling the share?drop from around RM8 ti today RM7.5 within around a mth only.
Value Hunter OP 102324582 : Usually instituition players invest and sell based on their logic. For them possibly their average cost is nearer to the IPO price of RM1.00 when it was first listed back in 1992. EPF as to date hold 11% which is approx 507million units. Their share trading logic is not like us retail investors that is for sure. Only recently 23rd oct they just acquired approx 180k units of MISC shares. So who knows why EPF still want to acquire MISC shares. Maybe they like the Mero 3 contract too.
Value Hunter OP : MISC prove to be resilient and is now gaining traction. It is still undervalued based on today price
Value Hunter OP : Congratulations those who have pick it up at the dip last week.
StockTrooper Value Hunter OP : thank you for strengthening the conviction sir