• Overview. Hibiscus Petroleum (Hibiscus) 4QFY22 core PATAMI surged to RM218mn thanks to new earnings contribution from Repsol’s Malaysia asset as well as higher oil price. Revenue almost triple to RM868mn as oil sales volume grew to 1.4mn bbls (4Q21: 0.8mn bbls; 3Q22: 0.5mn bbls) on the back of higher realised oil price that jumped to USD120/bbl (4Q21: USD69/bbl; 3Q22: USD101/bbl).

• Key highlights. Average daily production declined slightly by 5% to 18.7k boepd (3QFY2022: 19.6k boepd) on lower average uptime at PM3 CAA PSC which underwent rectification works. The uptime in 4QFY22 was lower at 91% with production rate of 8.9k boepd as compared to 96% uptime and 9.7k boepd in 3QFY2022.

• Against estimates: Inline. FY22 core PATAMI rose by multi-fold to RM348mn underpinned by strong 4QFY22 result. This is largely in line with our forecast, making up 108% of our FY2022 estimate.

• Annual maintenance. The company is conducting its annual planned maintenance activity at North Sabah field which is expected to be completed in September 2022. Concurrently, Anasuria FPSO also underwent offshore turnaround beginning 17th June 2022 which was subsequently completed on 17th Jul 2022.

• Reserves. The company ended FY22 with 59.4mn bbls of 2P oil reserves and 70.2mn bbls of 2C oil resources.

• Outlook. The company targets to sell 4.4-4.7mn bbls oil and 2.8mn boe of gas in FY23. This is 25% and >100% growth over 3.5mn bbls oil and 1.3mn boe of gas sales respectively in FY22. In the long run, it targets to achieve production of 35k-50k boepd by 2026.

• Our call. We maintain a BUY call on Hibiscus with a higher DCF-derived TP of RM1.30 (from RM1.17) as we roll-over our valuation to FY23. At current price level, we see significant upside given its success to deliver sales growth supported by high oil price.

Source: BIMB Securities Research - 25 Aug 2022