Christmas coming, winter coming and then CNY coming. All within 3-4 months. US data shows brent oil build-up but the gasoline, kerosene, and diesel are at an all-year low. I think refinery refined less due to high fuel price and hope that brent price will drop. So now they are operating at a minimum stock but if demand catches up due to holiday and winter, they have no choice but to refine more brent oil into fuel. This might create a demand for brent.
O&G players may form consortiums to bid for Exxon Mobil’s Malaysian assets --November 17, 2020 16:00 pm +08
SEVERAL local oil and gas (O&G) companies are understood to be interested in acquiring Exxon Mobil Corp’s assets in Malaysia, which are up for sale, but are said to be more comfortable forming consortiums to bid for these assets because of the hefty price tag of US$2 billion to US$3 billion (RM8.26 billion to RM12.39 billion).
According to its website, these assets produce oil and gas under four PSCs with Petronas and are responsible for about a fifth of oil production and about half of the natural gas supply to Peninsular Malaysia.
Exxon warns some assets may be at risk for impairment due to climate change ---November 4, 2021
Exxon Mobil Corp (XOM.N) on Wednesday said for the first time in a securities filingthat some of its oil and gas properties may face impairment due to climate change.
Anyone read the budget 2022? Check out the lampiran 21 Galakan Cukai Bagi Projek Late-Life Assets Untuk Industri Petroleum Huluan, page 127. It greatly benefit hibiscus.
Galakan Cukai Bagi Projek Late-Life Assets Untuk Industri Petroleum Huluan ( kedudukan semasa ) :
1) Kadar cukai pendapatan diturunkan daripada 38% kepada 25%
2) Elaun modal dipercepatkan daripada 10 tahun kepada 5 tahun;
3) Pengecualian duti eksport ke atas produk petroleum yang dikeluarkan.
Cadangan: 1) Elaun Modal Dipercepatkan dalam tempoh 2 tahun
2) kerugian daripada aktiviti decommissioning dibenarkan dibawa ke belakang (carryback losses) untuk diserap dengan pendapatan bagi 2 tahun taksiran berturutan sebelumnya (consecutive immediate preceding year). Baki kerugian yang tidak dapat diserap akan diabaikan
Tarikh Kuat Kuasa : Bagi Kontrak Perkongsian Pengeluaran Late-Life Assets yang diberikan mulai 1 Januari 2020 hingga 31 Disember 2029.
The tax reduction of 13,% will greatly benefit Hibiscus. I'm not able to quantified the benefits of the other incentives. Mayb some tax expert can share. I think the repsol purchase might also benefitted from the budget 2022.
Titan, indeed should Repsol assets (or NSabah too) be considered late-life assets, then the reduced tax rate is most welcomed. As usual - devil is in the details, what constitute late-life?
I can appreciate what the government is trying to do - incentivizing operators to continue production. So, maybe Exxon or Shell might reconsider selling.
Just says that every year ur business profit get tax 24%, of course you try ur level best to see what can deduct tax or deferred it. Suddenly gomen say this yr i reduce to 15% la. Wat do u think? Once in a lifetime opportunity leh. Of course will run full production and see how to convert to profit loh.......betul o not?
By doing the same things, you already gain additional 14% profit wor. Mana u mau cari....
Just keep till the end of next year and collect your profit. Oil price high. Purchase of repsol. Tax reduction from 38% to 24% + other incentives as well. It looks like that section of the budget was purposely done for Hibiscus. I'm not sure who else benefitted from it....lol
Unless developed countries were to finance developing countries green energy supply system, there's little chance developing countries can forgo crude oil or coal, not to mention natural gas that most developed countries are using right now. The sad truth now, though, is developed countries have failed to commit to financing these projects, only to lecture them to comply while developed countries are those that consume the most carbon now. It's like the rich in developed countries CLAIMED that they don't mind higher taxes so long their money goes into good use when they are currently paying the least, what a joke!
Oil spare capacity to diminish as jet demand returns, Aramco says
"The industry's spare capacity, currently at 3-4 million barrels per day (bpd) is providing some comfort to the market, however, my concern is that the buffer ... might diminish, especially next year when demand is expected to pick up further," Nasser told the Nikkei Global Management Forum.
"Expanding capacity in our industry takes around 5-7 years, and there is not enough investment in the world to increase capacity, this is a huge concern," Nasser said.
Amazing QR with reference to the EBITDA! Heard that the Ebitda was estimated based on 60 + per barrel and now brent is hovering about 83-84! I believe next round of QR will be bombastic!
Profit is maximum oledi coz critical components in anasuria oil field no stock n not yet replace , management no mention when can settle problem. Profit wil Only boom after complete repsol deal .. Cash increase , cashflow maintain strong ..
Glance through the QR report. On the bright side, the last QR, the selling price was between $70-75, and the production rate of 81%. Next QR, the selling price should be 80 to 85% and the production rate should be around 90%? Meaning got 20% room of improvement loh....lol....
Update from AmBank after an analyst briefing with management yesterday: Hibiscus will not be proceeding with a proposed 5-year US$ bond issuance for the proposed US$212.5mil Repsol acquisition as the interest rates offered by financial institutions ranged over 8% which management deemed excessive given the company’s B1 rating from Moody’s Investors Service and B+ from S&P Global Ratings. Instead, the group expects the deal to be funded from operational cash generated from the proposed Repsol assets commencing on 1 January 2021, US$80mil Trafigura prepayment facility (which has a more acceptable implied interest rate of below 4%) extension to Dec 2023 and RM204mil convertible redeemable preference shares which were issued in November last year. In 1H2021, the combined Repsol assets registered an EBITDA of US$80mil when Brent crude oil prices averaged at US$65/barrel vs over US$80/barrel currently. The group hopes to secure the necessary approvals from the Malaysian and Vietnamese authorities to complete the Repsol deal by January 2022.
Investment Highlights We maintain our BUY recommendation on Hibiscus Petroleum (Hibiscus) with an unchanged sum-of-parts-based fair value of RM1.18/share. This already assumes the value accretion from the proposed acquisition of Repsol’s assets commencing in January 2022 and reflects a premium of 3% from our ESG rating of 4 stars.
It also implies an enterprise value (EV)/proven and probable reserves (2P) valuation of US$6.70/barrel, half of EnQuest's US$13/barrel and 57% discount to regional average of US$16/barrel.
We maintain our forecasts following an analyst briefing yesterday with these salient highlights: Hibiscus will not be proceeding with a proposed 5-year US$ bond issuance for the proposed US$212.5mil Repsol acquisition as the interest rates offered by financial institutions ranged over 8% which management deemed excessive given the company’s B1 rating from Moody’s Investors Service and B+ from S&P Global Ratings.
Instead, the group expects the deal to be funded from operational cash generated from the proposed Repsol assets commencing on 1 January 2021, US$80mil Trafigura prepayment facility (which has a more acceptable implied interest rate of below 4%) extension to Dec 2023 and RM204mil convertible redeemable preference shares which were issued in November last year. In 1H2021, the combined Repsol assets registered an EBITDA of US$80mil when Brent crude oil prices averaged at US$65/barrel vs over US$80/barrel currently.
The group hopes to secure the necessary approvals from the Malaysian and Vietnamese authorities to complete the Repsol deal by January 2022. If the deadline is missed, the sale and purchase agreement can be extended to June next year without incurring any penalties. In our view, a delay may be positive for Hibiscus given the continued accumulation of cash arising from the Repsol assets’ operations.
The group is currently pitching for an FPSO-based development plan for its 87.5%-owned Marigold and Sunflower (M&S) fields in Licence P198 at the North Sea vs Ithaca Energy’s tieback solution to the Repsol/Sinopec JV’s Piper B platform that could defer first oil by a year to 2025. While awaiting the decision of UK’s Oil & Gas Authority for the M&S development plan, Hibiscus remains on an accelerated schedule to develop its 70%-owned Teal West discovery in Licence P2535 which will deploy a subsea pipeline tieback to the nearby Anasuria FPSO. Teal West, which has 4mil barrels of oil reserves, is still targeted to achieve first oil by late 2023. Even though Hibiscus’ 1QFY22 production volumes were affected by Covid 19 execution delays in the 50%-owned North Sabah production sharing contract and subsea riser malfunction in Anasuria, output is expected to improve going forward. North Sabah’s production is poised to normalise as average uptime improved from 81% in 1QFY22 to 91% in October 2021, raising daily net production from 5,311 barrels to over 6k barrels. North Sabah will continue to be the main earnings generator, accounting for 78% of the group’s 1QFY22 net profit, lower than 89% in FY21 on Anasuria’s improved earnings.
We remain positive on Hibiscus’ proposed acquisition of Repsol’s assets for US$212.5mil cash, still aimed for completion by January 2022. Recall that this will triple the group’s daily production to 26.8K barrels of oil equivalent and increase its 2P reserves by 72% to 81mil boe. Based on the EV for the group’s expanded 2P reserves, Hibiscus is currently only trading at US$4.60/barrel, at an unjustified discount of 65% to its closest peer, UK-listed EnQuest and 70% of regional average (Exhibit 3).
Vaclav Smil: Distinguished Professor Emeritus at the University of Manitoba and a Fellow of the Royal Society of Canada (Science Academy) - Moving Away from Fossil Fuels (https://www.youtube.com/watch?v=kxjiIoZoO0w)
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Posted by KingKong_Doll > 2021-11-05 08:12 | Report Abuse
Christmas coming, winter coming and then CNY coming. All within 3-4 months. US data shows brent oil build-up but the gasoline, kerosene, and diesel are at an all-year low. I think refinery refined less due to high fuel price and hope that brent price will drop. So now they are operating at a minimum stock but if demand catches up due to holiday and winter, they have no choice but to refine more brent oil into fuel. This might create a demand for brent.