As we know, Hibiscus is a special purpose acquisition company (SPAC), established on 2011 without any core assets. It is very difficult for this kind of company to borrow money from bank due to high fluctuation of Brent oil price and high bankruptcy rate of small oil and gas companies.
In order to acquire valuable assets, Hibiscus has no choice and has to get money from shareholders by issuing plenty of private placements and CRPS for past 10 years. This will cause massive dilution number of shares inevitably.
So, I think this is a very big turning point for Hibiscus if they able to buy Repsol assets without issuing any private placement or third tranche of CRPS
twynstar - Thank you for the you-tube link. Indeed, should the oil price remain at current level to the end of the year, the free cash flow would be excellent. And the need for further CRPS would be low to nil.
Let’s assume that there is no any private placement or third tranche of CRPS for Repsol acquisition.
1) After full conversion of 2nd tranche CRPS, total number shares of Hibiscus will be around 2,012 millions shares.
2)For FY 2019, the average net oil production rate was 8356 barrels per day, with North Sabah average realised oil price of USD73 per bbl, and Anasuria UK with average realised oil price of USD 67 per bbl. This helped Hibiscus to generate revenue RM 988 millions, net operating cash flow RM 496 millions and net profit RM 230 millions. The margin of net profit was 23.28% ( 230 ÷ 988 x 100%)
3) For Repsol assets, Dr Kenneth did mention that the average operating costs (“OPEX”) per barrel is around USD15, which is almost same with opex of North Sabah and Anasuria. So it is safe to say that the margin of net profit of Repsol assets also around 23.28%
4) After Repsol acquisition, the total average net oil production rate will increase to 26800 barrels per day. For conservative calculation, if the average realised oil price around USD 60 per bbl for FY2022, Hibiscus will be able to generate revenue 26800 x 365days x USD 60 x RM 4.1 ( conversion rate) = RM 2,406 millions. If the margin of net profit is 23.28%, that means Hibiscus will make net profit of RM 560 millions
5) With total number shares of 2,012 millions and net profit of RM 560 millions, EPS of Hibiscus will be around 0.2783. With current stock price of RM 0.64, the PER will be 2.30. The average PER of KLCI and oil & gas industry is around 16 currently.
Past 2 days news: Saudi Arabia stock market record high. Top Oil companies huge dividen payout and massive shares buy back plan. Thanks to stable and high oil prices for past 6 months.
Alas, hibiscus share price has not rallied according to crude oil price in the recent crude rallying to 70+. Past record suggests hibiscus should be valued above 0.90 when crude is above 70. So, there must be reasons behind this. All I can think of (1) current hibiscus asset is recently found not to worth so much (2) repsol deal is not favored by fund managers or pissed off fund managers in the fund raising process (3) future crude oil price will fall below 60, and soon. I believe market will recover even if covid-19 cases rise to new high cause most people won't be able to last another 6 months lock down. Personally, tend to believe (2) being the reason. Still holding on to my hibiscus, can only hope the repsol deal will bring good earning result going forward with meaningful dividend
Yes, backdoor PM will resign on Monday ! So, the new government will bring new hope and new confident to all the local & foreign investors enter into our market !
So, I think started from tommorrow, KLSE will have a big uptrend toward 1,800 to 2,000 pts !
Hibiscus tommorrow will spike to above 0.70 and T.p by end of Aug 2021=> break above 0.80 T.p by end of Dec 2021=> break above RM1.50 T.p by end of Mar 2022=> break above RM2.00 T.p by end of Jun 2022=> break above RM3.00
Superb, almost all the economy is re-open for start business started from tommorrow, Monday, 16-8-2021 ! KLSE really will started booming tommorrow onwards !
Based on the Repsol Acquisition Presentation Slides published on Hibiscus Petroleum website, the target completion of Repsol Acquisition asset will be Q4 2021.
"There have been positive developments in the Group over 4Q FY2021. Conditional agreements for a transformative acquisition were executed," group managing director Kenneth Gerard Pereira said.
"The Repsol asset acquisition is expected to almost triple the Group’s average net daily oil, gas and condensate production to 26,800 barrel of oil equivalent per day in 2022," he added.
Does this means Next quarter onward will see Repsol oil in the QR already?
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Posted by zhangzuode > 2021-08-02 18:28 | Report Abuse
twynstar - Hibiscus will not issue CRPS......
Appreciate how you come to such a conclusion, thank you.