OREANDA-NEWS. Amidst declining demand in Europe, China and the Energy renaissance within the United States,  the price of WTI Crude Oil has fallen 43.2% while the price of Brent Crude Oil has fallen 46.0% in the 2014 year through to 16 December.

Like most businesses involved in the extraction or processing or resources, companies in the oil and gas fields exploration, production or development use multiple companies to provide auxiliary support services to keep them operational. Hence the offshore support services sector include a comparatively large number of companies.

This resonates with listings on Singapore Exchange (SGX) – which lists three times as many companies involved in offshore support services than companies involved in oil exploration & production. According to Global Industry Classification Standard (GICS), the 32 offshore support services range from as many as eight different sub-industries which include construction & engineering, electronic components, industrial machinery, marine, marine ports & services, oil & gas drilling, oil & gas equipment & services and trading companies & distributors. The 32 stocks that represent the offshore support services segment, have generated an average decline of 13.4% in total return over the year thus far.

The table below details the 32 stocks sorted according to market capitalisation.

Name SGX Code Market Cap: S\$M Price Change MTD (%) Total Return YTD (%) GICS Sub Industry
EZION HOLDINGS 5ME 1610.0 -23.0 -43.5 Oil & Gas Equipment & Services
PACC OFFSHORE SERVICES HOLD*** U6C 955.5 -9.5 -53.0 Oil & Gas Equipment & Services
PACIFIC RADIANCE T8V 537.1 -13.5 -10.8 Oil & Gas Equipment & Services
EZRA HOLDINGS 5DN 524.3 -19.5 -60.9 Oil & Gas Equipment & Services
MERMAID MARITIME PCL DU4 402.7 -14.9 -41.1 Oil & Gas Equipment & Services
CH OFFSHORE C13 363.1 8.4 33.7 Oil & Gas Equipment & Services
SWISSCO HOLDINGS ADP 345.8 -33.1 -26.7 Oil & Gas Equipment & Services
CIVMEC P9D 340.7 -6.8 -12.5 Construction & Engineering
CHARISMA ENERGY SERVICES 5QT 268.0 -10.3 -67.1 Construction & Engineering
GAYLIN HOLDINGS RF7 251.9 -0.9 -6.1 Oil & Gas Equipment & Services
CHUAN HUP HOLDINGS C33 247.6 0.0 7.6 Electronic Components
VALLIANZ HOLDINGS 545 241.9 -13.6 -61.2 Oil & Gas Equipment & Services
AUSGROUP 5GJ 229.5 -10.1 64.0 Construction & Engineering
EMAS OFFSHORE *** UQ4 224.2 -26.1 -48.3 Oil & Gas Equipment & Services
KS ENERGY 578 209.7 -7.0 -19.2 Trading Companies & Distributors
FALCON ENERGY GROUP 5FL 190.9 -9.6 -36.3 Oil & Gas Equipment & Services
SWIBER HOLDINGS AK3 177.9 -7.9 -53.6 Oil & Gas Equipment & Services
MTQ CORP M05 157.7 -11.3 -10.4 Oil & Gas Equipment & Services
XMH HOLDINGS M9F 119.4 -5.2 -17.2 Trading Companies & Distributors
KIM HENG OFFSHORE & MARINE H*** 5G2 110.8 -12.4 -34.7 Marine
ATLANTIC NAVIGATION HOLDINGS 5UL 93.8 0.0 14.2 Oil & Gas Equipment & Services
SINWA 5CN 75.7 -6.3 27.9 Marine Ports & Services
SBI OFFSHORE 5PL 74.9 -39.4 138.3 Trading Companies & Distributors
VIKING OFFSHORE AND MARINE L 557 63.7 -7.0 -49.7 Oil & Gas Equipment & Services
NORDIC GROUP MR7 41.2 -20.8 -0.5 Industrial Machinery
JASPER INVESTMENTS FQ7 29.6 -22.2 -84.9 Oil & Gas Drilling
KTL GLOBAL EB7 27.9 -8.8 90.0 Trading Companies & Distributors
IEV HOLDINGS 5TN 26.3 -0.7 -54.4 Oil & Gas Equipment & Services
JAYA HOLDINGS J10 23.9 -26.2 -8.7 N/A
JASON MARINE GROUP 5PF 23.3 -10.2 46.1 Marine
HOE LEONG CORPORATION ** H20 22.3 -8.3 -64.1 Trading Companies & Distributors
HEATEC JIETONG HOLDINGS * 5OR 12.3 0.0 14.1 Oil & Gas Equipment & Services

Source: Bloomberg (Data as of 15 December 2014) * YTD from 16 Dec 2013, ** YTD from 20 Dec 2013, *** YTD from IPO price.

These 32 stocks have a combined market capitalisation of S\$8.0 billion. The five largest capitalised offshore support services stocks are Ezion Holdings, PACC Offshore Services Holdings, Pacific Radiance, Ezra Holdings and Mermaid Maritime Public Company. Together, they have a market capitalisation of S\$4.0 billion which represented half of the combined market capitalisation of the 32 stocks. These five stocks averaged 16.1% price decline in December thus far.

Ezion Holdings

Ezion Holdings develops, owns, and charters offshore assets; and provides offshore marine logistics and support services to the offshore oil and gas industries. The company operates through Offshore Logistic Support Vessels’ Services, and Liftboats and Jack-Up Rigs’ Services segments. On 6 November 2014, the company reported profit for the quarter ended 30 September 2014, increased 28.9% year-on-year, from US\$38.2 million to US\$49.2 million. Ezion Holdings has a market capitalisation of S\$1.6 billion which is the largest capitalised stock among the 32 offshore support services stocks. The company generated 43.5% loss in the year-to-date total return.

PACC Offshore Services Holdings

PACC Offshore Services Holdings provides offshore marine services in Singapore and internationally. The company’s Offshore Supply Vessels segment supports midwater to deepwater operations of rig and oilfield operators in the exploration, development, construction, and production phases. It operates anchor handling tug supply vessels and platform supply vessels that provide towing and positioning drilling rigs, and materials transportation services. On 14 November 2014, the company reported net attributable profit for the quarter ended 30 September 2014, decreased 30% year-on-year, from US\$21.0 million to US\$14.6 million. PACC Offshore Services Holdings has a market capitalisation of S\$955.5 million and generated 53.0% loss in the year-to-date total return from their IPO on 25 April 2014..

Pacific Radiance

Pacific Radiance owns and operates offshore vessels in Asia, Africa, Australia, and South America. It operates through three divisions: Offshore Support Services Business, Subsea Business, and Complementary Businesses. The company owns, manages, and charters offshore vessels for the offshore oil and gas industry. On 13 November 2014, the company reported profit for the quarter ended 30 September 2014, increased 35% year-on-year, from US\$10.6 million to US\$14.3 million. Pacific Radiance has a market capitalisation of S\$537.1 million and generated 10.8% loss in the year-to-date total return.

Ezra Holdings

Ezra Holdings Limited provides integrated offshore solutions for the oil and gas industry. The company operates in three divisions: Subsea Services, Offshore Support Services, and Marine Services. The company operates in Singapore, Southeast Asia, Australia, India, Africa, Norway, the United Kingdom, and the Americas. On 24 October 2014, the company reported profit after tax for the 12 months ended 31 August 2014, decreased 16% year-on-year, from US\$64.1 million to US\$54.0 million. Ezra Holdings has a market capitalisation of S\$524.3 million and generated 60.9% loss in the year-to-date total return.

Mermaid Maritime Public Company

Mermaid Maritime Public Company, together with its subsidiaries, provides subsea and drilling services for the offshore oil and gas industry primarily in Southeast Asia, and the Middle East. Its services include subsea inspection, repair, and maintenance; subsea infrastructure installation support; subsea remotely operated vehicle support; subsea emergency callout service and salvage; subsea cable laying; offshore drilling and workover services; and accommodation rig services. On 26 November 2014, the company reported profit for the year ended 30 September 2014, increased 193.4% year-on-year, from US\$15.4 million to US\$45.3 million. Mermaid Maritime Public Company has a market capitalisation of S\$402.7 million and generated 41.1% loss in the year-to-date total return.

Best Performers in 2014 year-to-date

Among the 32 offshore support services stocks, the five best performing stocks in terms of 2014 year-to-date total returns were SBI Offshore, KTL Global, AusGroup, Jason Marine Group and CH Offshore. They have a combined market capitalisation of S\$718.7 million and averaged 74.4% year-to-date total return.

SBI Offshore

SBI Offshore markets and distributes offshore rig equipment to customers in offshore and marine industry. It operates in three segments: Marketing and Distribution; Design, Engineering, and Fabrication; and Contract Revenue. The company markets and distributes its products in Singapore, China, Southeast Asia, Europe, and the United States. On 14 August 2014, the company reported gross profit for the six months ended 30 June 2014, increased 32% year-on-year, from US1.7 million to US\$2.3 million. SBI Offshore has a market capitalisation of S\$74.9 million and generated 138.3% year-to-date total return, which was the highest among the 32 stocks.

KTL Global

KTL Global supplies rigging equipment and related services to customers in the offshore oil and gas, and marine and construction industries worldwide. It operates in three segments: Offshore Oil and Gas, Marine, and Others. It is also involved in the inspection and certification of lifting equipment, and certification of wire ropes; and property investment business. On 11 November 2014, the company reported profit from operations, net of tax for the quarter ended 30 September 2014, increased 24.4% year-on-year, from S\$750 000 to S\$933 000. KTL Global has a market capitalisation of S\$27.9 and generated 90.0% year-to-date total return.

AusGroup

AusGroup provides asset maintenance, fabrication and manufacturing, and construction services to the natural resource sectors in Australia, Singapore, and Thailand. The company offers complex, heavy, and precision fabrication services; construction services, such as structural, piping, mechanical, and installation, as well as offshore construction services. On 10 November 2014, the company reported gross profit for the quarter ended 30 September 2014, increased 39.8% quarter-on-quarter, from AU\$9.3 million to AU\$13.0 million. AusGroup has a market capitalisation of S\$229.5 million and generated 64.0% year-to-date total return.

Jason Marine Group

Jason Marine Group is engaged in the provision of design, supply, integration, installation, test, commission, maintenance, and support of marine communication, navigation, and automation systems for the marine and offshore oil and gas industries. The company operates through Sale of Goods, Rendering of Services, and Airtime Revenue segments. On 6 November 2014, the company reported profit attributable to owners of the parent for the six months ended 30 September 2014, increased 84% year-on-year, from S\$1.1 million to S\$2.0 million. Jason Marine Group has a market capitalisation of S\$23.3 million and generated 46.1% year-to-date total return.

CH Offshore

CH Offshore provides marine support services to the oil and gas industry in South East Asia, the Middle East, the Americas, Africa, and Russia. It is involved in the ownership and chartering of vessels. The company provides various services to the offshore oil and gas industry, including offshore construction support; support services to offshore drilling rigs and installations. On 30 October 2014, the company reported revenue for the quarter ended 30 September 2014, increased 14.9% year-on-year, from US7.9 million to US\$9.1 million. CH Offshore has a market capitalisation of S\$363.1 million and generated 33.7% year-to-date total return.