UZMA Bhd has been rated a ‘buy’ in an initiation report by Phillip Capital Holdings Sdn Bhd as it stands out as a key beneficiary of Petronas Activity Outlook 2024-26 in the well plug & abandonment (P&A)  hydraulic workover unit (HWU) space.

“We like Uzma for its competitive advantage as an innovative solutions provider, beneficiary of the Petronas Activity Outlook, and its ongoing energy transition effort, which is expected to be a recurring income stream generator,” it said in a research note released today (Jan 12).

It has a 52-week target price of RM1.30. The stock was trading at 89.5 sen at 3pm today. Its 52-week high was 94 sen and low at 54 sen.

Uzma started out as a geoscience and reservoir engineering (GRE) consultancy service company in 2000 and has undergone rapid growth in the energy and technology industry.

It has established itself as a niche, innovative, and cost-effective solution provider that provides services across the exploration, development, and production value chain, the report said.

According to the Petronas Activity Outlook report, the number of well P&A work completed in 2023 stood at 45 wells, far exceeding the projected 28 wells, while the number of wells slated for decommissioning was expected to decline slightly to 38 wells in 2024.

“Nevertheless, the forecast represents a 36% increase compared to the projected number from the previous year. The outlook for well P&A work remains robust over 2025-26, with an average of 50 wells per year and expected to benefit Uzma,” it said. – TMR