Posted by VenFx > 2017-09-22 22:51 | Report Abuse

Lau333,
thanks you for your thoroughly research shared.

Hibiscus is hot cake vs your fact sheet.
Interesting to see how market would reach then.

I have a feeling that Hibiscus would ride up big way, upon the necessary consolidation complete.

However, the volatility expected to be great .

Posted by Lau333 > 2017-09-23 13:01 | Report Abuse

Fatimah, I do concur with VenFx. Hibiscus will be volatile. The ride will be bumpy, depending on how and when the North Sabah deal eventuate. I don’t have a target price for you but caution is strongly advised as per the content of my write-up. Buy on weakness and do not chase high.

Venfx, thank you for supporting my write-up.

Posted by Micht > 2017-09-30 19:05 | Report Abuse

The PSD is based on a 50:50 basis. And if below 10kbpb/day, profit sharing shall be on a 50:50 basis. Yet, you're now basing 30% profit from 50% portion?

Please correct if I'm wrong.

Posted by Lau333 > 2017-09-30 21:34 | Report Abuse

2011 North Sabah Enhanced Oil Recovery Production Sharing Contract was entered between PETRONAS and a 50:50 joint venture between Sabah Shell Petroleum Company and Petronas Carigali. No, the 50:50 is NOT the profit sharing ratio but is the equity ratio in the joint venture between Sabah Shell & Petronas Carigali.

Actual Profit sharing between PETRONAS & the joint venture is not made available to BURSA and hence estimate of 70:30 is used, which is based on "revenue over cost" PSC sliding scale. See link below

https://hub.globalccsinstitute.com/publications/assessment-capture-and-storage-potential-co2-co-produced-natural-gas-south-east-asia/a52-malaysian-psc

Posted by Lau333 > 2017-09-30 21:40 | Report Abuse

Meaning 70% of profit goes to PETRONAS and the balance 30% to the joint venture. Since Sabah Shell (to be taken over by Hibiscus) only has 50% share, then the profit attributed to Shell is only 50% of 30% share of profit of the joint venture (total output 18k barrel per day). I’m not able to find any information that production below 10k is given special rate of 50:50. Anyway, this is irrelevant since the joint venture TOTAL production 2015 is 18kbpd, which is over 10k (of which 9kbpd belongs to Sabah Shell).

Under PSC term, the government is enjoying 3 slices from the barrel pie, i.e Royalty, profit attributed to PETRONAS (in the form of dividend) and finally taxation.

Posted by Lau333 > 2017-09-30 22:08 | Report Abuse

Fatimah, PSC is good for the country as the government get the biggest slice.

If you are asking in the context of Hibiscus share price, what I can say is that Hibiscus paid (or is going to pay) a good price for the assets, whether it translates into better share price for Hibiscus especially after nearly 40% increase is another matter...

Posted by Micht > 2017-10-03 08:56 | Report Abuse

50% of 30% share of profit? Technically, you're saying Hib only have a share of 2700 barrel per day of 18000, but to share 50% of capex and opex. It is a very bad business for anyone to go into.

Are you sure you've got this right? You're now saying a whole different story from the bank research. This is a serious matter if what you're saying is right.

Posted by Lau333 > 2017-10-03 21:52 | Report Abuse

The 2700 bbl/day production that you quoted is still subjected to taxation...
Consider that in Iraq, contractors are paid fix fee US$2 per barrel, it is not too bad as with PSC you share more if the oil heads north.

The data source and the analysis are both provided and explained. Is my story really very different from those bank research? On the contrary, I think it’s congruent. Taking BIMB report that was shared in Hibiscus forum as example (table 3 & table 4):
Anasuria Fair Value (derived from DCF) for 2018, premised on 55 USD/bbl and 3800 bbl/d production, is RM 0.468
North Sabah Fair Value for 2018, premised on same oil price with 8000 bbl/d production, is RM 0.581

Shouldn’t North Sabah deserve a much higher Fair Value since the production is twice as much in comparison with Anasuria?
Not all profit are equal…

Posted by Lau333 > 2017-10-03 22:39 | Report Abuse

From the report by Public Investment Bank:
Anasuria: RM 0.58 (DCF with WACC=11%)
North Sabah: RM 0.48 (2C reserve only)
North Sabah is given a lower valuation despite higher production.
Again, not all profit are equal....

Posted by OrlandoOIL > 2017-10-08 22:13 | Report Abuse

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

Posted by Jon Choivo > 2018-11-27 23:51 | Report Abuse

This is fantastic. I was just too stupid to even go and read it.

Congratulations.