Niki, thanks for sharing.

Niki, is it confirmed Wednesday for QR and lunch time release again?

The price of Natural Gas is almost $8 now, up more than 100% this year alone.

Again my query, the figures in EBITDA and not Profit After Tax. Last quarter, EBITDA was $140M and Profit After Tax $48M.

For once, at 1.34 its put doubt on the shorties now. Cut their losses or fight on?

They keep telling us the EBITDA figures. Last quarter, EBITDA was $140M and net profit $48M. Something to keep an eye out for.

They gave us the EBITDA figure and not the net profit in the Repsol deal. When you sell your car, you tell the buyer the good features of it and not the rest.

$100 high in 2014 is not equivalent to $100 in 2022. Price of a roti canai in 2014 is definitely not the same in 2014 compared to 2022.

I read the Maybank TP 1.70 and the research was done on 28 pages of information, not just an A4 sheet.

Watch out for this quarters profit. The Repsol dividend of $320M will be recorded as a capital gain and this may inflate their profit to more than $500M for the first 3 months of 2022.

I am curious how they will report the more than RM300M dividend from Repsol in their quarterly profit statement.

Page 48 of the Annual Report released last week clearly states they paid 38% based on the Petroleum Tax Act 1967 and it amounted to $63.2M for FY21.

The biggest plus this week was the unexpected 1 sen dividend. It indicates they have the Repsol deal financing accounted for and surpluses to reward the shareholders.

If they had a rights issue or Private Placement, the price would have been the low 4s. No bank was going to give o&g any loans back then. In hindsight, it is easy for us to be critical of them now.

The CRPS price was based on the 5 day closing average price back in November or December. Existing shareholders had ample opportunity to buy at 0.48 in the open market then.

Niki, what's the news on the appeal against Woodside? Its been going on for quite a while.

From The Straits Times



BUSINESS
Hibiscus Petroleum to rake in RM1.1bil from Fortuna Int Petroleum

By Ayisy Yusof
June 7, 2021 @ 1:31pm
Hibiscus Petroleum Bhd (HPB) has the potential to earn about US$255 million (RM1.1 billion) in net cash inflow over the next five years once the acquisition of Fortuna International Petroleum Corp (FIPC) from Repsol Exploración SA (Repsol) materialise by the end of 2021.
Hibiscus Petroleum Bhd (HPB) has the potential to earn about US$255 million (RM1.1 billion) in net cash inflow over the next five years once the acquisition of Fortuna International Petroleum Corp (FIPC) from Repsol Exploración SA (Repsol) materialise by the end of 2021.
KUALA LUMPUR: Hibiscus Petroleum Bhd (HPB) has the potential to earn about US$255 million (RM1.1 billion) in net cash inflow over the next five years once the acquisition of Fortuna International Petroleum Corp (FIPC) from Repsol Exploración SA (Repsol) materialise by the end of 2021.

The oil and gas (O&G) exploration and production company also estimated earnings before interest, taxes, depreciation, and amortisation (EBITDA) contribution of US$135 million (RM558.8 million) from the Spanish asset in the calendar year 2022.


Managing director Dr Kenneth Pereira said the transformative acquisition is expected to enhance HPB's financial ability to reinvest into the existing asset portfolio and expand its growth prospects by acquiring high-quality production assets while paying dividends to reward its shareholders.

"Over the last six months, we have been bidding for this asset. Thankfully, the oil prices also rebounded into a reasonable range now for us to be able to enjoy some upside from this asset," he said at a virtual press conference on Saturday.

Pereira said oil prices have bounced to about US$72 per barrel despite the ongoing Covid-19 crisis globally, as aircraft around the world are still grounded and many economic activities are hampered by the efforts to contain the virus.

"At the time when we were bidding for the FIPC asset, oil prices ranged between US$55 and US$65 per barrel but now nearing US$72 per barrel.

"We believe oil prices still hold at a strong level. If the pandemic issues get resolve gradually across the world, we believe oil prices may trend a bit higher," he added.

To recap, HPB issued a single-tier interim dividend of 0.5 sen per share for the financial year ending June 30, 2021, despite lower oil prices at the time ranging from about US$55 to US$60 per barrel.

HPB's indirect unit, Peninsula Hibiscus Sdn Bhd, has acquired FIPC for US$212.5 million (RM879.5 million) after entering into a conditional sale and purchase agreement (SPA) with Repsol on June 1.

HPB said the acquisition is a unique opportunity for the company to acquire a high-quality asset portfolio comprising five production sharing contracts (PSC) in Malaysia and Vietnam.

The acquisition also allows the company to collectively assume Repsol's role as the operator for PM314 with a 60 per cent stake, PM305 (60 per cent), 2012 Kinabalu Oil (60 per cent), PM3 CAA (35 per cent) and Block 46 (70 per cent).

The acquisition involves five PSCs in Malaysia and Vietnam, involving 205 wells and 17 platforms, while Peninsula Hibiscus will be taking on Repsol's role as operators.

Corporate finance head Joyce Vasudevan said HPB would not be raising a full amount of US$212.5 million to complete the acquisition but rather generate funding via banks borrowing and Islamic convertible redeemable preference shares (CRPS).

"Currently, we have about RM200 million accrued from CRPS. We believe it will not be an issue for us to raise another up RM250 million, possibly via CRPS, to close the acquisition deal. HPB will generate the remaining balance from banks borrowing as part of the acquisition's settlement," she said.

Joyce said HPB is a debt-free company and have a strong cash flow from its acquiring assets.

"Hence, we can take on more debts," she said, adding that the company has no plan to raise funds via a rights issue.

"We have sufficient funding ability through other sources. However, we also don't want to unnecessarily burden our shareholder by doing a rights issue at this time," she added.

HPB has guided to keep its gearing below a comfortable level of 0.3 times in the future with expected borrowing of up to RM300 million after acquiring FIPC.

Translation from Nanyang

Kenneth Pereira, the managing director of Dahonghua Petroleum, said at a press conference on Saturday: "The EBITDA contributed by the new assets is equal to twice the current average."

He continued that Safflower Petroleum will obtain an EBITDA of RM213.3 million in the 2020 fiscal year; if the above-mentioned RM558.8 million is combined, the EBITDA in 2022 will be close to the level of RM800 million.

In addition, the company also estimates that the new assets can bring in a net cash inflow of US$255 million (approximately RM1.1 billion) between 2021 and 2025.

Kenneth Pereira explained that once more funds are obtained, existing assets will be invested to increase oil and gas production.

He does not rule out that he will purchase more new assets in the future to expand the company's asset portfolio.

"However, at this stage, we will focus on handling the transfer procedures and execution of Repsol assets."

"We need to handle the work at hand carefully."

On the other hand, the information provided by Safflower Petroleum shows that, according to the estimation of RPS Energy Consulting Co., Ltd., the total value of the above assets is US$285 million (approximately RM1,176.48 million).

The price of the assets purchased by Safflower Oil is US$212.5 million (approximately RM877 million), which is equivalent to a discount of approximately 25%.

Kenneth Pereira said: “It can be seen that Safflower Petroleum has purchased high-quality assets at an ideal price. Compared with other cases of Malaysian oil companies acquiring assets, this is already a very low price.”

Three-fold increase in natural gas production

On the other hand, according to the information provided by Dahonghua Petroleum, after purchasing the above assets, the company's daily net oil and condensate production will double from the existing 9,000 barrels to 18,500 barrels.

Including natural gas, it can produce 26,800 barrels of oil equivalent (BOE) per day, which is about three times higher than the current 9,400 barrels of oil equivalent.

Balancing the oil portfolio

Kenneth Pereira also said that through the acquisition of the above-mentioned assets, the flag of the natural gas field can be used to better balance the asset portfolio of Safflower Oil.

"Previously, we only focused on oil production and had very limited involvement in natural gas. Therefore, we wanted to expand our footprint in the natural gas field through this acquisition."

Looking back at history, Safflower Oil announced on the 2nd of this month that it would invest US$212.5 million to acquire Repsol’s exploration and production assets in my country and Vietnam.

Among them, they include 35% of the Malaysian offshore PM3 CAA production sharing contract (PSC), 60% of the 2012 Kota Kinabalu Petroleum PSC, 60% of the PM305 PSC, 60% of the PM314 PSC, and Vietnam's Block 46 CN 70% of the shares.

This corporate event is also part of Repsol's streamlining of global operations and exit from the Malaysian market.

Related acquisitions are expected to be completed by the end of this year.

Will not reduce the willingness to pay dividends

Safflower Petroleum pointed out that this asset acquisition will not reduce the company's willingness to pay dividends in the future.

Kenneth Pereira said that as long as the oil price is still at an ideal level, which benefits Safflower Oil, the company will have the incentive to continue to pay dividends, and even pay higher dividends.

"Whether or not dividends are paid, or how many dividends are paid, depends on oil price trends."

He also said that thanks to the steady recovery of global economic activity, oil prices will remain at an ideal level in the next few years.

On the other hand, the funds to purchase assets come from the issuance of convertible redeemable preferred shares (CRPS), internal financing and bank loans.

As for the purchase of the above assets, how will it affect the debt level of Safflower Oil?

Kenneth Pereira estimates that after the completion of the acquisition, the company's total debt will increase to the level of 200 million to 300 million ringgits.

"As of fiscal year 2020, the company's debt ratio is about 0.04 times. We will try our best to maintain debt at this comfortable level."

He also explained that the company will not raise funds through the issuance of rights shares. "We already have enough funds. Moreover, it is not easy to raise funds by issuing rights shares."

On behalf of the Board, HLIB and CIMB wish to announce that Dr. Kenneth Gerard Pereira (“Dr. Kenneth”) had on 8 October 2020, declared his intention to participate in the book-building exercise to be carried out in relation to the Proposed Private Placement of CRPS by subscribing in cash for a minimum of 8,000,000 and up to 50,000,000 CRPS at an issue price of RM1.00 per CRPS.

No one is going to loan $1b unless they know they have a good chance of getting their money back.

It's a drainage contract and the perfect start. Shows gabungan is on their radar when the big stuff gets awarded in time to come.

Been almost 5 months since I was last here. Again, my concern is exactly the same as expressed by the both the IB. Excluding LRT3, the projects in hand amount to $300m and no new wins since GE 2018. The GK management must be half asleep as they have not enlighten the IB they have multi billion contracts exclude LRT3 and dont deserve a SELL at 50 sen call.

I've noticed the OCBC trend too. They're quite aggressive, hundreds of thousands of shares daily.

Maybe I am wrong but my recollection MRT2 is constructed by MMC/Gamuda.

It cant be too much on their plate. When their share price was at $4, they had the inflated $31b LRT3, bidding for the $40b MRT3 and for HSR as well.

I am interested in the uncompleted $1b MRT2 works you mentioned. Where can I find this information?

Maybe they are reading the comments here when I mentioned previously the SBB of 20k and 30k daily are an insult to the minority shareholders.

SHQuah, you are right again. However, poject cost cut in almost half and PDP to fixed price cuts the fatty meat out and what's left are the lean trimmings. Still money to be made but no longer the good old days.

Philip, Aug 2018 LGE announced in Dewan Rakyat a full contract termination of LRT3 will cost the government $4.2b in compensation cost.

Oct 2018 PH confirmed the go ahead of LRT3 but at almost half its original price, from $31.65b to the current $16.6b. The implementation concept of the project will also change from PDP to a fixed price contract regime.

TKH would have preferred the $4 2b payout in which gkent pockets half.

However, I do reckon the current valuations are quite attractive.

The LRT3 contract was initially cancelled by PH and LGE. However, after discovering the compensation cost from the cancellation was astronomical, they reawarded it back to Gkent/Mrcb with changes to it. If the compensation clause wasn't there, it'll be a different story altogether.

This is more like it. Show the public via SBB the downside is limited.

Look at what supplemental agreements on MRT2 has on Gamuda's share price in the last 2 trading days.

You are so right. The SBB is to support the closing price as some vested interest parties have nominee accounts and it is done for their own interest.

To be fair, Philip wont have the LRT3 margins but TKH will have some preliminary figures by now. If the margins are as good as some suggest, spend $10m of the $200m in the bank and SBB 200k daily. Assuming at $1 a share, you'll need 50 trading days to do it. SBB 20k shares like today is an insult to the minority shareholders.

SuperPanda, Datuk Kamaruddin took your advice and added some warrants.

Amzarb44, if tomorrow they get one, it won't be below $1 anymore.

If LRT3 is going to give gkent such a boost, dont SBB 10k or 20k or even 50k. SBB 100k or 200k daily. Show the public you have confidence in your own company.

The days of gk at $3-$4 was because they had LRT3, MRT3 and bidding for HSR as well.

We'll see a rebound soon but its unlikely to be sustainable. Everytime we sell into a rally, we are ALWAYS able to buy it back at a lower price.

NEW future earnings pushes up share prices. When one has nothing to announce for almost 2 years, this is what happens. Even a small new water meter contract will push gk up from its oversold position.

That's why this very second, we have buyers at 0.905 and sellere ar 0.91. They have a difference in opinion.

Philip is good. He argues his case with facts and not personal banter. No point having a 'syok sendiri' forum and the share price keeps declining.

Maybe a more concrete response could have been the RTS is up for review in a few months time. HSR maybe scheduled back on track too and TKH did mentioned in the last quarter report they were actively on the lookout for tenders in neighbouring countries. MRT3 may also be on the horizon.

Shareholders want to invest in a Mini-Gamuda, not a water meter company with a LRT3 project.

My point is LRT3, SBB, bank balances all are old news. Gkent didn't suddenly collapse. It has been systematically sold down in the last 12 months from 1.38 to 0.92 as its fail to offer shareholders anything new post LRT3. Even with LRT3 profits coming, a lot are waiting for the opportunity to exit the door. UNLESS of course you know what, we also have A B And C supplementing our profits. Water meters alone arent gonna cut it.

So the HK and Singapore winning tenders really were the water meter ones from 2017? Sigh! I thought they were new developments we didnt know about.

I am really interested in the Singapore and Hong Kong tenders. Can you please provide a link to them? Thank you.

In late 2018 and early 2019, they were aggressive in their share buybacks, always hundreds of thousands every day. In the last 6 months, that ability has reduced to tens of thousands, the capability of a retail investor.

My issue is still their inability to win any open tenders. Win at least one even if it's a $10m one and keep the ball rolling. Show us without your golfing buddy, you'll still competitive in the real world.

There can be no other official announcement except for a denial.

Dividends are paid out of retained earnings and not profits. The jar of honey has reduced from $400m to $200m in 2 years. LRT3 earnings have already been factored into its current price as it's not some tender which they just won.

Exclude LRT3, only $300m worth of projects in hand. That's what happens when you do nothing for 1i8 months.