KingKong_Doll, no, not cashing out. I am going to sink or swim with the Repsol deal. I just do not believe, the fundamental will lose to chart..., 3X production gain!!!! Even should oil price drop back to 70s, there is still the increase of 3X production!!!!

The constant buying and selling for chartist, I wonder whether they have consider the incidental costs (commission, stamp duties).

On Friday last, Hibiscus signed an agreement with FIPC (Repsol's subsidiary that hold the assets being acquire) to assist in the transition to Hibiscus (ensure continuous smooth operation). NOW, Hibiscus would not sign such a deal if the completion of the acquisition is not near.

Indeed good luck and peace.

well KingKong_Doll, it appears that whatever calculation, it is a useless endavour. Fundamental does not play any part at all. It is all hype now. Currently, it is not sexy. Later, may become a bit sexy or not at all. Sad really.

@sheep, chart...

So the acquisition of Repsol's assets does not play a part at all in the valuation. It is a worthless / pointless acquisition, the highly likely increase of production by 3 times has no value at all...

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)

Yes, interest over 8% is too high. With financial institutions extremely adverse to oil & gas projects can only be good for oil price.

Thank you for reading. Hope that it is useful.

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.

twynstar, thank you for the tax info and appreciated the promo...

The alternative is for Exxon to carve out its Malaysian asset into smaller bits to sell.

At US$ 2 to 3B, there are no local (O&G) players.

PTT could have the free cash flow.

Shell also selling one of its Sarawak field: https://www.thestar.com.my/business/business-news/2021/07/22/shell-launches-sale-of-stakes-in-malaysian-oil-and-gas-fields--document. But as a non-operator, it is not so attractive.

Since Hibiscus might raise a US$300m bond, there might be another asset buy around the corner.

KingKong_Doll, thanks. My bad for not reading the report from Ambank. As for the other O&G companies, as I stated before are not producer at all and therefore subjected to ITA.

Ambank is not wrong. The majority of companies under O&G sector are not in the upstream sector, they are all in the service sector and do not produce any oil at all. So they will pay tax accordingly to ITA.

Thank you DJThong for the clarification. For persons still unsure - https://www.petronas.com/mpm/malaysia-oil-gas-landscape/taxation-regime

What would be interesting will be Q1FY22, it will be a whooper y-o-y.

Hmmm, error413, it is Annual Report, typing too fast...

DragonG, further thoughts - the tax issues would not affect the valuation of Repsol purchase, it is a cash-flow issue. And should LDHN wins the case and depending on tax evaluation criteria used by Hibiscus, if similar (to Repsol), Hibiscus would face an additional tax bill too.

This may explain the rather huge proposed Bond quantum of USD 110m (RM 450m) - USD 300m.

DragonG, thank you. I missed that. It is an income tax issue. Yes many companies big and small had been hit with additional tax. Tenaga comes to mind. Big sum (tax).

kakiminyak, thank you for your clarification, appreciate it and also your insight to the potential revaluation of crude oil price.

Yes, do not panic, just monitoring, thank you.

kakiminyak, where did you read that Nord Stream 2 can be used to transmit oil, please share?

Just come across this by Vaclav Smil written for JP Morgen 2021 Annual Energy Paper : http://vaclavsmil.com/wp-content/uploads/2021/06/JPM2021.pdf

Sobering facts are provided on the illusion (should be delusion) created about renewable energies.

Peace.

It is stated in the Report (Investor material Oct 21) posted on Hibiscus site - page F-12.

Yes, a bank loan might have lower interest, however, the terms might be too onerous. I think that the 7.18% indicated might be the top, maybe 5% would be fair since it is a US$ bond. Thus should interest be that low or lower, Hibiscus might then issue more to capture the low interest.

Also, a circular for the Bond was issued as per page F-3.

Thank you for reading.

Thank you for reading. Appreciate the feedback.

Here is more madness of the Greenies: https://www.investing.com/news/commodities-news/britains-fossil-fuel-dilemma-in-the-spotlight-as-climate-talks-near-2647476

Thank you Windy1974 for the kind word. You can get the regional peers courtesy from AmInvest: https://klse.i3investor.com/servlets/staticfile/435336.jsp

Sorry, it will be best that you create your own spreadsheets for the various variables, with or without Repsol assets. In this way, you will be able to appreciate / get a handle which variable(s) is / are important.

Thank you once again for reading.

linheng, thank you for reading.

Hamsip, appreciate if you will advise what is c16, thank you.

Glaceau - compared with Hibiscus, what is the investment merits for Carimin, does it produce oil (or gas), if yes, is it going to increase its production by 3 times within 3/6 months?

twynstar, thank you for the Repsol valuation insight for Jan 2020. Yes, indeed there will definitely be a negative goodwill either Q2FY22 or Q3FY22.

Looking forward to the realization of the value towards the end of this year for the completion of the Repsol deal.

Titan, why do you not believe the management of Hibiscus that said that they will not issue anymore CRPS / private placement for the Repsol acquisition?

Thank you Windy1974 for your rational. Indeed it is not wrong and not necessary 100% right. But correct rational all round. Thank you for sharing.

As an aside, the Repsol's asset might be "accounted" starting Q3 & Q4 FY22 (Jan - Jun 2022), as such, the net profit could be north of RM 450m.

Windy1974, appreciate how you arrived at a value of RM1 based on oil price usd60-70, thank you.

Where is it announced that AGM is on the 11 Oct 21, thank you.

twynstar - indeed that is correct. Hibiscus has goodwill with the big boys.

However, there appear to be doubt on the funding of the final payment to Repsol that is now estimated to be just US 100 million from Hibiscus itself. Lets review the situation:

The balance usd 112.5-15(deposit)=97.5 would be from (free) cash-flow of the Repsol assets being acquired that accumulated since 1 Jan 2021, the sales and purchase agreement effective date. This 97.5x4.2=RM409.5m should be well within the acquired assets capability. Please note that the natural gas price has appreciated a lot since.

At the end of FY2021 (30 June 2021), Hibiscus itself had RM136+177=313m. That is, within these 4 to 5 months from 1 Jul 2021 onward, Hibiscus (free) cash flow would need to accumulate RM 107m (exch 4.2).

Of course, Hibiscus would not use all the cash, I would not. So bank loan would / should be utilized. How much, now that is a multi-million question. I speculate about RM 50M bank loan.

Thus I believe Hibiscus will not issue any fresh CRPS for the Repsol deal as mentioned in the youtube session.

Also, I do not see Hibiscus buying anymore asset now. The window for cheap asset sales has closed. Proven wrong here would be most welcomed.

PEACE.

On 9 September 2020, Hibiscus announced the issuance of CRPS and the rational for this issuance is on page 17. It is very clear that right issue was considered and it will be too dilutive should an acquisition be not concluded.

Please for those still debating on this dilution issue, the CRPS was and is the correct route. CRPS is also open to all shareholders of Hibiscus but must meet the criteria of a "high net-worth". This meant that should an acquisition be not concluded, the money so raised would be returned to those subscribers. Therefore, there is holding risks involved.

Should the aggrieved, after going through the circular so issued (and also approved through an EGM) still feel unhappy, please stop and move on, it is life shortening otherwise, thank you very much.

PEACE.

Warren Buffett responded Jeff by saying, “Because nobody wants to get rich slow.” -
twynstar, thank you very much. I think this explain most of "investors" now.

And your advises on investing in the O&G is most pointed. I would add that it will be the investment of a lifetime too (for me, a mid-60s, at least).

Happy investing and peace.

If issuing new shares can always double current production, it is most welcome, even for minority shareholders.

Do carry out proper due diligent before dismissing it as totally negatives.

Maybe "investors" are still not sure because it took about 18 months for the North Sabah deal to complete (Oct 2016 to Apr 2018).

Then Hibiscus was a nobody and it was a first where a "novice" is buying. Before, it was a major buying from another major.

Today, Hibiscus is known to Petronas and the wavier/expiry of pre-emption rights by Cargali (& PVEPC) was quickly obtained as announced on 14 Jul 2021, a mere 1+ month from S&P announcement on 4 Jun 2021. Remember Carigali is 100% owned by Petronas - Petronas would have given approval to Carigali to proceed with the wavier.

The remaining steps would be EGM and Petronas (& PetroVietnam) approval. These two steps would be mere formalities, so the closing of this Repsol deal would be end of 2021/early 2022.

As I have written before, this deal is Hibiscus buying another Hibiscus. The value accretion is there. Do your own due diligent.

Have a good Sunday, peace.

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.

twynstar - Hibiscus will not issue CRPS......

Appreciate how you come to such a conclusion, thank you.

supersaiyan3 - thank you for reading and the feedback.

Hafid, could you please elaborate. As long as I remember, the government of the day has always announced that Malaysia economy is open.

soojinhou, I share the same sentiment as you.

Captain Mabel Sparrow, many thanks for the insights and explanation.

Captain Mabel Sparrow, I am certain most of your battleships will clear some high seas, perhaps some may sink (Silent Mary Barakah for instance), but I may be wrong.

An interesting omission is "Enterprise" Dayang. Care to share "Sparrow" views on this omission ....

Thank you.

Happy investing.

Everyday, we are inundated with so much information that it is almost impossible to pin-point the direct/actual cause of the rise or fall in share price of any particular company.

Mr. Market is sure one fickle minded person, but to attribute the current price movement to the seeking of extension for the Private Placement is really stretching one's imagination a lot given the current low oil price which can be directly caused by the concern of demand that is being destroyed by the lock-down of virtually the whole of China to combat Covid 19 from spreading.

The concern should be, if the oil price remain low longer (for good half of 2020 or more), will Petronas and the oil majors cut back their maintenance, development, etc.? If the answer is affirmative, then FY2020 would be less profitable and revenue much less than FY2019. Maybe, just maybe this is what Mr Market is concern about and not some fund raising exercise with or without warrant.

Happy investing.

paperplane - you also like OTB?

The seeking of extension for the Private Placement (PP) to 26 August 2020 might be due to the poor sentiment arising from the coronavirus (now known as COVID-19) that deflate demand by some estimates to be at least 3 Mbpd. Some said it is nearer to 1 Mbpd. I have no idea.

However while the PP is part of Dayang group debt restructuring, it was approved earlier at the AGM held on 22/5/19. That is Dayang had been having a PP for the past several years and always approved during the several past AGMs. This provided flexibility to the management to raise further fund (if and when necessary).

IMHO, the extension (or postponement, or delay) is a good thing as it shows that Dayang does not need the fund currently. The cash flow is very good - 3rd quarter, Dayang had RM 266M in hand.

Nonetheless, a PP also means that there must be someone(s) ready to come up with cash to subscribe. The PP price normally will be not more than 10% discount to the 5-day VWAMP (volume weighted average market price) preceding the price-fixing date. For example, today is price fixing date, the 5-day VWAMP yesterday is about 2.83, then 10% discount will gives 2.55 x 96,480,983 PP shares = RM 246 M.

For information, Dayang need not issue all 96,480,983 PP shares, it can be in several tranches OR NOT ISSUE PP AT ALL.

Yes, the cash so raised (from PP) can be used to reduce SUKUK, working capital, etc., the PP subscribers will want to know whether there will be any gain for them, otherwise why subscribe while keeping the cash in money market earns about 3% pa or in bond will earn about 5% with much less risk.

Overall it is good that PP is postponed, less dilution.

Happy investing.

Yes, there is no reputation. ICON management knew that the oil price was to go down and still went ahead with the IPO in May 2014. The many financiers also knew about the tanking oil price but ignore it and loan millions to ICON. The nine corner stone investors - Tan Sri Chua Ma Yu, government-linked funds Lembaga Tabung Haji and Permodalan Nasional Bhd, and the usual cadre of fund management firms, such as Hwang Investment Management Bhd, Maybank Asset Management Sdn Bhd and Nomura Asset Management Sdn Bhd were also of ill reputation and invested.

And they knew the coronavirus was coming way back in 19 Aug 2019 when ICON announced the restructuring.

Yes these were all persons with ill reputation, out to con retailers. Please do not subscript then, what the point of even posting any comments at all if one just refuses to consider the prevailing conditions then and now.

Nonetheless, have a good day.

The financiers rights shares issued - 262,059,095, and warrants - 65,514,768. Assume convert all warrant to shares, total financiers shares will be 327,573,863 ONLY.

Now there will be further shares to be issued to financiers called the Exchange Shares. These Exchange Shares will be issued 4 to 8 years from today.

Nonetheless, the number of Exchange Shares is estimated at 639,097,912. Thus the total possible financiers shares NOW is 327,573,863. And 4 to 8 years later (2023 to 2027), it will be 966,671,775, assuming the financiers have not sold their shares.

This is much less than the 2 billion shares mentioned to be financiers shares.

Really appreciate if one is to comment, please comment with correct fact.

Yes, 2,354,370,200 shares will be issued to all shareholders and this is 2x pre-consolidated 1,177,185,100 shares or 100x consolidated shares.

The major shareholders irrevocably undertake to subscript up to 1,385,714,285 (minimum) and 1,742,857,142 (maximum) i.e. RM 145.5 million to RM 183 million. Please do give due consideration to this undertaking.

The fear that the major shareholders and financiers will "DUMP" their shares on 20 Feb is IMHO, misplaced. Put yourself in their shoes - would you do it? There is the reputation at stake - after going through the hardship to raise fund just to dump the shares, especially the financiers - they will lose more than the amount of loan that was offset (by accepting shares in kind for RM 27.5 million NOW and RM 75.4 million 4 to 8 years later).

Now whether the O&G industry will "tank" or not, should be the main question to ask to determine whether to subscript or NOT if one is to "invest".

Also based on the minimum amount to be raised, RM 183 million, and main shareholders has agreed to come up with RM 145.5 million, ONLY RM 37.5 million need to be raised from retailers (you and me), i.e. ONLY 357,142,856 rights shares with 89,285,714 warrants. NOW, the "dumping" of shares would most likely be ONLY 357 million shares and NEVER ever be 2 billion shares.

Hopefully this put some perspective to the issue at hand.

Happy investing.

Quickgain, thank you for the clarification on warrant that will be given free with the rights share. Indeed should the warrant be price at RM 0.005, then this would be an opportunity for one to invest. The warrant exercise price is RM 0.165 for one "mother" share and the exercise period is 8 years. Maybe the price upon listing of warrant maybe higher than RM 0.005, need to look at valuation of warrant - more study.

Thanks.

Quickgain, appreciate if you will show how by applying for excess shares will reduce cost below 10.5 sen.

Looking at the RSF (Rights Subscription Form), one still need to pay 10.5 sen per excess share applied for, IT IS NOT FREE.