Bumi Armada Gets Notice Of Termination For Armada Claire FPSO

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  • Bumi Armada’s wholly-owned subsidiary Armada Bainaves has received a notice of termination for the charter of Armada Claire floating, production, storage and offloading (FPSO) unit from Woodside Energy Julimar.

  • The FPSO unit has been in operation in the Balvanes Field, off north-western Australia, since delivering its first oil in August 2014.

  • The group has stated that the termination notice was not valid and tantamount to a cancellation for convenience or alternatively a repudiation of the contract by Woodside Energy Julimar.

  • The group intends to fully enforce its rights under the contract including initiating legal proceedings against Woodside Energy Julimar for its unlawful purported termination of the contract.

 

Significance: Following the announcement, Hong Leong IB Research has downgraded the group to “Hold” (from “Buy”) with a lower target price of Rm1.01 (from RM1.17). The research house said a more likely scenario would be settlement off court through renegotiation of the contract terms involving charter rate discounts or deferment of monthly payments.