Jasper Investments

Jasper Investments: Upstream reported that Jasper has sold off one of its 2 jack-up rigs now under construction at Keppel yard. The 2 KFELS B Class rigs were ordered in Dec 10 and Apr 11 at a cost of US$180m each. Rig prices have risen since and the latest order placed by KazMunayGas for a similar rig was worth US$242m, this being the first newbuild by KepCorp’s Caspian yard. We currently do not have further details on the reported sale but assuming Jasper sold the jack-up rig for US$220m, this will translate to a potential US$40 gain or 1.2¢ per share and lift the book NAV by US1¢ to US10.1¢. Of note, the group has been in the red ink for the past 5 consecutive years, including the most recent loss of US$87.2m for FY12. Even after stripping out goodwill accounting of US$55.8m, the group was still bleeding at the operating level and will perhaps turn profitable only when the remaining rig is completed and becomes operational either late 2012 or mid-2013. Technically, the stock has been in a consolidation mode over the past 12 months, finding support at around the 6¢ level.