Cyprus contract awarded - THE TIMES OF MALTA

Friday, June 29, 2018, 06:38

Medserv has announced that it has signed a second contract with a multinational oil and gas corporation (TEKMOR note: ExxonMobil most likely) to provide shore base logistics services for exploration activities taking place offshore Cyprus.

To provide these services, the company will be setting up additional logistics facilities in the port of Limassol. It is expected that this contract will be serviced through the group’s internal resources.

Medserv also supports the offshore activity of ENI in the region. The award of this contract is another major step to broaden the group’s oil and gas client portfolio and establishes the company now in eight countries as tendering activity continues.

Medserv's two major investors look to sell their shares - TIMES OF MALTA

Tuesday, May 1, 2018, 09:13

More than 65 per cent of the oil and gas service company available for purchase

Medserv's two major shareholders are seeking to offload their shares in the oil and gas service provider, they announced late on Monday.

Malampaya Investments Limited and Anthony S. Diacono have informed the company's board of directors that they intend to source a strategic purchaser to acquire their respective 34.33 per cent and 31.17 per cent shareholding.

Sourcing a strategic purchaser should "accelerate and further supplement the Group’s growth and internationalisation strategy," the two shareholders said in a company announcement. The company's board of directors share that view, they noted.

The process to find a purchaser is still at a very early stage, and the company noted that there is no certainty that one will be found or an eventual deal concluded.

Medserv’s interim statement highlights delays in Q4, strong 2018 - TIMES OF MALTA

Friday, November 24, 2017, 07:49

Medserv’s update issued to the market highlights that the group’s business pipeline remains robust with a strong outlook for 2018, while earnings for the second half of the reporting year are lower than forecast due to delays in projects both in integrated logistics support services (ILSS) and oil country tubular goods (OCTG).

Further to the company announcement, Edison Investment Research also issued an update where they state that although the project delays will see H217 miss expectations, contracted projects underpin their FY18 estimates and for this reason this remains unchanged. The DCF-based fair value provided by Edison currently stands at €1.64 per share. The full Edison report may be viewed on the company’s website.

The group reported that the second ILSS base recently opened in Cyprus will become fully active in the coming month. Four to five wells are expected to be drilled in the waters offshore Cyprus in the next 12 months. Medserv Cyprus will support the upcoming exploratory drilling campaign planned by ENI Cyprus from both its shore bases in Limassol and Larnaca.

The group’s Cypriot subsidiary has also recently participated in a tender for the provision of ILSS to a second International Oil Company (IOC) which is planning to drill next year.

Medserv to service Eni Cyprus for two more years - TIMES OF MALTA

Limassol Port

Friday, July 14, 2017, 09:44

Contract extension announced
Malta-based oil and gas logistics firm Medserv and Italian oil company Eni have activated a contract extension which will ensure the Maltese company continues to provide operational base support services for Eni Cyprus Ltd for another two years.

The deal, inked with Medserv (Cyprus) Ltd, includes the provision of dedicated facilities and services in the port of Limassol whilst still maintaining the base facilities in Larnaca port.

The two companies had first signed a three-year deal in June 2014, with the contract allowing for a two-year extension. Medserv (Cyprus) Ltd was set up in 2011 to provide logistics and support facilities for the oil and gas sector in the eastern Mediterranean basin.

Challenging period for Medserv - TIMES OF MALTA

Thursday, April 20, 2017, 00:01

Edward Rizzo

On April 5, Medserv plc published its 2016 financial statements as well as its updated Financial Analysis Summary which included the 2017 financial forecasts. Moreover, the UK-based research house, Edison Investment Research, published an updated view on Medserv followingthese announcements.

The 2016 results are reflective of the volatile industry in which Medserv operates as various industry-wide factors adversely impacted the group’s performance. Moreover, for the first time, the 2016 financial statements also included the contribution from the Mets Group following the acquisition of the Middle Eastern Group of Companies in February 2016.

Medserv renews major contract - TIMES OF MALTA

Sunday, August 7, 2016, 00:01

Medserv has successfully concluded the renewal of one of its major contracts with an international oil company operating offshore North Africa for another two years.

Medserv will provide fully integrated logistics and shore base services from its base in Malta. The project relates to the continuation of the Bahr Essalm offshore gas field development in the central Mediterranean. This major natural gas field project includes the installation of subsea structures, engineering, as well as extensive diving and implementation campaigns. A range of vessels will be involved, including pipe laying and diving support vessels.

Medserv results exceed targets by 38% - TIMES OF MALTA

Thursday, March 24, 2016, 00:01

Medserv has reported a profit before tax of €6 million representing an increase of 38 per cent over forecast. Reported group revenue for the year was €42.2 million.

The group said that its performance in 2015 was attributed to a number of factors, including the strong business flow conducted out of Malta in support of the ongoing operations offshore Libya, and to the performance of Medserv (Cyprus) Ltd which continues to service ENI out of the company’s shore base in Larnaca. Finally, engineering and maintenance services continued to grow in 2015.

As the global oil and gas sector continues to suffer from the effect of oversupply of oil to the market, the company has refocused and moved ahead with its investment plans to ensure it can continue to be of service to its growing list of blue chip customers in the Mediterranean and beyond.

A ‘boring’ proposition - THE TIMES OF MALTA

The yard in Sharjah can handle storage, inspection,
maintenance and repair of pipes.

Thursday, February 25, 2016, 06:01 by Vanessa Macdonald, Sharjah, UAE

You might think that – if you excuse the pun – a pipe storage facility would be boring.

In fact, it might cross your mind that it is a rather strange investment for Medserv to make. And not just any investment but a $45 million one, doubling its size overnight.

It turns out, however, to be a very smart move indeed. Middle East Tubular Services was founded in 2006 and like the entrepreneurial spirit of Medserv’s executives, its founder Paul Hayward, with Peter Howes, saw opportunity and went for it.

METS has pipe storage yards in Sharjah in the United Arab Emirates, since 2010 at Basra in Iraq and since 2012 in the Sohar Free Zone in Oman, just 4.5 kilometres from a port on the Indian Ocean, employing around 160 people overall.

Medserv seeks bond, equity funding expansion strategy | The Times of Malta

Thursday, December 31, 2015, 00:01 by Edward Rizzo

Medserv’s need for further funding was first disclosed to the market on October 8 when the company announced that it entered into a conditional share purchase agreement for the acquisition of the three METS companies for a total of $46 million. In this detailed announcement, providing information on METS and the terms of the proposed transaction, Medserv had clearly indicated that it aims to finance the acquisition through a mix of debt and equity financing.

The announcement did not provide details on the debt already within METS and how the $46 million will be split between an equity injection by existing or new shareholders and total debt funding. In the circular to shareholders, sent in anticipation of the extraordinary general meeting that took place on December 3, it was mentioned that the minimum amount of the additional equity would be of €15 million.

Finally on December 21, Medserv announced the terms of the rights issue and the bond issue after obtaining approval from the MFSA.

I will not go into the details of the bond and rights issues, the pricing of these issues or the merits behind the decision taken by the executive directors. Instead, my article is intended to shed light on Medserv’s ambitious growth strategy.

Shortly after the MFSA approval of the Dual Issue Prospectus, Medserv held an information meeting for financial intermediaries and chairman Anthony Diacono provided a detailed overview of the intended plans going forward.

Diacono started off the presentation by explaining the current services portfolio of Medserv. The core business to date has always been the support services provided to international oil and gas companies via the logistics bases. Currently, Medserv operates from its base in Malta supporting two International Oil Companies (IOCs) and other subcontractors; it provides support to ENI Cyprus via a three-year agreement (extendable for a further two years) from its base in Larnaca, Cyprus; and in 2015 it provided port facilities in Greece, mainly to assist a client in the safe anchorage of vessels.

Another service which was always provided to international oil and gas companies was the manufacture of drilling fluids which are required during exploration and/or production programmes. This ‘mud-mixing’ facility is available at the bases in Malta and Cyprus.

Recently, Medserv branched out into the provision of maintenance and engineering services. Over the past two years Medserv was awarded a number of contracts to provide maintenance services to platforms being used offshore Libya. Another contract awarded to Medserv some months ago via the Tripoli office will extend into 2016.

In 2014, Medserv also invested a sizeable sum into Malta’s largest solar farm as it installed 8,000 PV panels across its Malta base generating annual revenue of circa €520,000.

The long-term plan of Medserv is to increase its geographic presence, strengthen its portfolio of services and expand its customer base further with additional international oil and gas companies and subcontractors.

The strategy therefore continues to focus on strengthening the core business, i.e. the support services provided to international oil and gas companies via the logistics bases. Apart from the present facilties in Malta, Cyprus and Greece, Medserv is seeking expansion into other regions. During the meeting, the chairman confirmed that Medserv is currently seeking a strategic partner to set up a base in Egypt after it was approached by two major IOC’s ahead of some important tenders being issued. This coincides with the announcement made by ENI a few months ago that it discovered the “largest ever” natural gas field in the Mediterranean Sea offshore Egypt.

The ‘supergiant’ well (the Zohr field) is the largest gas discovery ever found in Egypt, as well as in the Mediterranean Sea, and could become one of the world’s largest natural gas finds. It was also reported in the international press that the Egyptian General Petroleum Corporation agreed with ENI to start producing from the Zohr gas field by 2017.

Earlier this year, Medserv had also mentioned the possibility of works in Portugal. The chairman stated that a tender was submitted and if it is awarded to Medserv, a temporary ‘pop-up’ base will be set up to assist the IOC in the exploration of one well. Although this may not be a sizeable contract at the outset, it could become more beneficial should the exploration prove successful.

A possible expansion of another support base, this time in the Caribbean, would be more sigfnicant in terms of geographic expansion. The chairman claimed in the recent meeting that a tender for the setting up of a logictics support base in Trinidad & Tobago had been submitted to support the large operation of BP involving several offshore platforms and drilling activities. Medserv is reportedly now also on the global list of approved logistics contractors of BP. This will also help to reduce Medserv’s current dependency on ENI given the significant work by this IOC in the Mediterranean. The prospectus also indicates that earlier this year Medserv made a proposal to the National Energy Corporation of Trinidad to provide and operate a mud plant and bulk silos/brine plant within one of their ports.

Meanwhile, the imminent acquisition of METS fits in perfectly with Medserv’s long-term plans since it helps in widening its geographic presence and achieves diversification in its service portfolio, given the focus on precision engineering. It also extends the client base given the various blue-chip clients utilising the services of METS.

Medserv also aims to explore a number of cross-selling opportunities via the METS acquisition. One of the main attractions of the acquisition is the ownership of the VAM licence in two of its locations allowing METS to provide pipe threading services. This is reportedly a very highly specialised offering and the licence is difficult to obtain given stringent criteria including expertise and volumes of pipes to be serviced. Following the acquisition of METS, Medserv are confident that they will be able to obtain such a licence also for the Malta base within 18 months. This will enable Medserv to introduce this service across the Mediterranean region thus opening a new line of business in a region where exploration and production activity in the oil and gas sector is expected to boom in the next couple of years.

Another cross-selling opportunity is the manufacture of drilling fluids, which is a core competence of Medserv and which is currently not provided by METS.

Additionally, via the METS acquisition, Medserv also intends to explore the possibility of providing services to the major IOCs seeking to work on new projects in Iran. Iran is the world’s fourth-largest holder of crude oil reserves and some very significant exploration/ production contracts (both onshore and offshore) will be available to the IOCs once economic sanctions are lifted in early 2016.

During the EGM held on December 3, which was convened to approve among other resolutions the METS acquisition, a number of shareholders present questioned the financial benefits expected from this imminent acquisition in the Middle East, especially given the business downturn experienced over the past two years. Unfortunately, no additional information on the current trading performance was provided in the Dual Issue Prospectus published last week.

In the coming months Medserv’s shareholders will be eagerly awaiting the publication of the company’s 2015 financial results to get to know the extent of the superior financial performance achieved compared to earlier forecasts for the year and more importantly the publication of the Financial Analysis Summary due by June 30, 2016 providing the financial projections of the Medserv Group for 2016. This should also include the initial contribution from METS. Moreover, shareholders will be expecting news on developments related to the company’s ambitious growth strategy as well as further updates with respect to possible strategic investors following the EGM held on October 12 which authorised the directors of Medserv to divulge confidential information to such investors.

Rizzo, Farrugia & Co. (Stockbrokers) Ltd (RFC) is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report.

© 2015 Rizzo, Farrugia & Co. (Stockbrokers)Ltd. All rights reserved.
Edward Rizzo is a director at Rizzo, Farrugia & Co. (Stockbrokers) Ltd.

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