KS Energy

KS Energy: announced its entry into Mexico with the signing of a MOU with one of Mexico’s renowned conglomerate Empresas ICA. KE Energy’s 80% owned subsidiary, KS Drilling, will set up a jointly controlled entity (JCE) with ICA, to provide drilling services and heavy capital eqpt for the offshore oil and gas exploration mkt in Mexico. By 2014, the JCE is expected to initially require two new high spec jack-up drilling rigs valued at ~US$240m each. Back in May 2011, KS Drilling ordered two jackup rigs from Cosco for an aggregate cost of US$388m, scheduled for delivery some 27 and 32 months later. Should these rigs be sold to the Mexican JV, KS Energy may reap estimated one-off pretax gains of ~US$36.8m (~5.6¢/sh) from the sale. Similar to Keppel’s latest yard venture, KS Energy may ride the wave of upstream investment that is expected to take place in Mexico. Mgt believes this marks a new milestone for KS Energy and is confident that there are many more working opportunities together with ICA.