Ezion

Ezion: halt to be lifted at 9am.
As discussed yday, Ezion has signed a JV agreement with ASX-listed Buccaneer Energy which has operations based in Houston, for the joint ownership of a jack-up rig with the Alaska Industrial Development and Export Authority (“AIDEA”). Pursuant to the JV Agreement, Ezion and Buccaneer will each provide US$2.5m in sh/h equity into Kenai Offshore Ventures (KOV) for a 50/50 stake in the JV vehicle...

KOV has secured a contract worth US$109.5m (US$21.9m p.a. or a dayrate of US$60,000) to provide a jack-up rig to support the offshore oil and gas activities in the Cook Inlet in Alaska, USA for 5 years. The project which is expected to commence by end-FY11 has obtained the approval and support of the state of Alaska. On the basis of a 30-35% gross margin, the contract would add around S$3-4m to Ezion’s bottom line annually from FY12 onwards...

Market may view this development positively, as Ezion will now have exposure to a new segment in rig leasing. Moreover this paves the way for Ezion to provide its offshore support services in a new geographical area that holds several underexplored offshore oil and gas prospects.
Most analysts maintain their ratings and target prices pending a mgt briefing later.
Pre-halt, Street is already a unanimous Buy with recent TP ranging btwn $0.79-1.10.