Hibiscus Petroleum Berhad

Sensitivity Analysis for Oil Price Impact to Hibiscus

Lau333
Publish date: Wed, 27 Sep 2017, 06:44 PM
Lau333
0 28
Sharing insights-Malaysia's first listed independent oil & gas exploration and production company
Following Message

Any increase in oil price will go straight to the bottomline after deducting for tax and royalty.   Details on royalty/tax comparison on Anasuria/North Sabah can be found here. 

 

Every $1 up in oil price:

Anasuria -> $1.00 - 30% Tax rate = $0.60 to P&L

North Sabah -> ($1.00 - 10% Royalty) x 30/100 Profit Sharing x (1-38% tax rate) = $0.167 to P&L

 

Production runrate as follow:

Anasuria = 3.5kbpd

North Sabah = 8kbpd (assuming normal decay rate and no investment due to pending sales from North Borneo's sales factsheet of 9kbpd)

 

Hence, for every $5 increase in oil price, (Note that the Brent crude oil has increased from around $50 to $58 per barrel)

Anasuria = $5 per barrel x 3.5kbpd x 365 x $0.60 profit/bbl x 4.2 USD/MYR = RM16.1m

North Sabah = $5 per barrel x 8kbpd x 365 x $0.167 profit/bbl x 4.2 USD/MYR = RM10.2m

 

Therefore, total increase = RM28.3m

 

Being a small scale operator, Hibiscus is dependent on outside service provider (Petrofac, as in Anasuria), which is likely to increase service charges in tandem with oil price increase.  

Assuming net realisable per dollar of oil increase is 80%,

Net impact to P&L = 80% x RM28.3m = RM22.6m or 1.5 sen per share.

 

Conservatively assigning a PE 10, impact to Hibiscus's share price increase per US$5 dollar oil price increase = RM0.015 x 10 = RM0.15. 

 

Disclaimer: This is a simplified sensitivity analysis intended as a guidance for investor to value the share price of Hibiscus. For educational purpose only and is not a recommendation to buy or sell.

 

HIBISCS (5199)
Related Stocks
More articles on Hibiscus Petroleum Berhad
Lau333// 3Q2018 Preview for HIBISCUS

Created by Lau333 | May 16, 2018

HIBISCS: A sneak peek into the upcoming 1Q2018(F) result through DNEX

Created by Lau333 | Nov 22, 2017

Hibiscus just missed out the September oil rally.

Created by Lau333 | Oct 08, 2017

Shell Trilogy: The Final Call

Created by Lau333 | Sep 22, 2017

Shell Trilogy: The Great Sale

Created by Lau333 | Sep 20, 2017

Why should Hibiscus just sell off West Seahorse?

Created by Lau333 | Sep 18, 2017

HIBISCS:Is the trendline breakout a signal of a reversal of the 6 months long downtrend?

Created by Lau333 | Sep 16, 2017

Hibiscus: Examine the share price through technical (TA) lense

Created by Lau333 | Sep 15, 2017

Is there a correlation between Hibiscus share price with Brent Oil?

Created by Lau333 | Sep 14, 2017

Discussions
2 people like this. Showing 6 of 6 comments

VenFx

The Lau333

For providing us the sensitivity analysis for the
Brent price vs Bunga Raya share price

2017-09-27 22:53

supersaiyan3

Fair enough.

2017-09-28 09:25

OrlandoOil

North Sabah -> 30/100 Profit Sharing x (1-38% tax rate)

30% profit sharing 38% tax rate Where do u get tis from?

2017-09-28 09:43

Lau333

OrlandoOil, the term specific to North Sabah PSC was not disclosed by Hibiscus to BURSA, citing confidentiality reason. The premise for modeling the profitability and price sensitivity under PSC term was articulated in my previous post, i.e ” Shell Trilogy: The Last Call. ”
You may refer to links below for further information on PSC:
https://hub.globalccsinstitute.com/publications/assessment-capture-and-storage-potential-co2-co-produced-natural-gas-south-east-asia/a52-malaysian-psc
http://www.ccop.or.th/ppm/document/CAWS4/MalaysianPSC.pdf

2017-09-28 19:19

OrlandoOIL

Lau333 d tax rate for North Sabah sld not b 38% but 25%

Petroleum income tax

Petroleum income tax is imposed at the rate of 38% on income from petroleum operations in Malaysia. An effective petroleum income tax rate of 25% applies on income from petroleum operations in marginal fields with effect from 30 November 2010. No other taxes are imposed on income from petroleum operations.
08/10/2017 22:11

2017-10-08 22:14

Lau333

OrlandoOil, At first I thought EOR qualify for marginal field tax rate. But I have no evidence of so despite extensive online search. So to be on the conservative side, I choose to use higher rate.

Quote:
The qualified marginal field is a specific area determine by the Minister, and is a field in a petroleum agreement area that has potential crude oil reserves not exceeding 30 million stock tank barrels or natural gas reserves not exceeding 500 billion standard cubic.
Unquote:

http://www.ey.com/Publication/vwLUAssets/Malaysia_provides_tax_incentives_to_encourage_marginal_oil_field_development/$FILE/2013US_CM3369_Malaysia%20provides%20tax%20incentives%20to%20encourage%20oil%20field%20development.pdf

2017-10-09 18:34

Post a Comment