August 13, 2008

Modec Soars on TSE on Oil Facility Deal

Tokyo, Aug. 12 (Jiji Press)--Modec Inc. shares surged on the Tokyo Stock Exchange Tuesday thanks to the firm's announcement of a large oil production system contract.

The issue remained buoyant above 3,200 yen in the afternoon session after rising to as high as 3,350 yen, or 8.4 pct, in the morning.

Modec said Monday that it will supply a floating production, storage and offloading, or FPSO, system capable of processing more than 120,000 barrels of oil per day to Tullow Ghana Ltd., an affiliate of British oil developer Tullow Oil PLC, for use at an oil field off Ghana.

Investors hunted Modec, which specializes in the designing and construction of offshore floating structures, on expectations that the deal will help lift its earnings.

Goldman Sachs said in a report that Modec's recurring profit in the year to December 2009 is expected to rise to 11 billion yen from the earlier forecast of 10.5 billion yen on the back of the contract. Goldman also raised its stock price target for Modec to 5,100 yen from 5,000 yen.END

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