Hibiscus Petroleum Berhad
Sensitivity Analysis for Oil Price Impact to Hibiscus
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.
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Discussions
2 people like this. Showing 6 of 6 comments
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
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
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
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
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