NEW YORK, July 29 (Reuters) - Oil prices settled up more than $2 a barrel on Friday as attention turned to next week's OPEC+ meeting and dimming expectations that the producer group will imminently boost supply. Brent crude futures contract for September, which expire on Friday, jumped more than $3 a barrel during the session and then pared gains to settle at $110.01 a barrel, up $2.87, or 2.7%. The more active October contract was up $2.14, or 2.1%, at $103.97. U.S. West Texas Intermediate (WTI) crude futures settled at $98.62 a barrel, rising $2.20, or 2.3%, after jumping more than $5 a barrel.
Hibiscus Petroleum Bhd along with its subsidiaries is engaged in exploration and development of oil and gas. It has operations in Middle East, Norway and Oceania regions. Repsol S.A. is a Spanish multinational energy and petrochemical company based in Madrid. It is engaged in worldwide upstream and downstream activities. The company announced on 1st June 2021 that it has agreed to sell its operated assets in Malaysia and in Block 46 CN in Vietnam to Hibiscus Petroleum. Hibiscus Petroleum Bhd said on Tuesday (Jan 25) that its indirect wholly-owned subsidiary Peninsula Hibiscus Sdn Bhd had successfully completed the acquisition of the entire equity interest in Fortuna International Petroleum Corporation (FIPC) from Repsol. Hibiscus Petroleum noted in a statement that out of the purchase price of US$212.50 million (about RM890.06 million), the net amount paid at completion was US$123.65 million after taking into account various adjustments, including the deposit paid of US$15 million. The company also made the following announcements: Hibiscus expects threefold increase in o&g output due to Repsol deal (Repsol Exploración, S.A) Repsol Asset Acquisition: Completed the trans formative acquisition on 24 January 2022. Assets are expected to almost triple the Group’s net daily oil, gas and condensate production. New Group Vision and Mission: Aim to achieve target production of 35,000-50,000 boe/day. Hibiscus Petroleum has good profit growth prospect and undervalued based on 2 factors: 1 Acquisition of Rapsol assets in Malaysia and in Block 46 CN in Vietnam to Hibiscus Petroleum. 2 Due to the Ukraine-Russia conflict, oil and gas prices are surging up higher and higher as shown on the chart below.
Hisbiscus reported EPS 15.32 sen for the quarter ending March and EPS 2.42 for its previous quarter ending December 2021. Its next quarter ending June should be much better because of its new acquisition of Rapsol’s assets and the increased oil production due to the Ukraine war. When the company announces its result before the end of August its share price should shoot through the roof.
AmanahRaya started Buying SAP. Next week Velesto is next in line ( possibilities High ). Expect 2Q results Revenue to be much higher than last Qr. Possible Rigs utilisation 65--70% compare to 30% last Qr
Velesto rebounded from its weakest quarter in 1Q21 with utilization rate rising to 39% in 1Q22, boosting its revenue by 76% YoY and paring down its losses by 24%.
We believe Velesto is on the cusp of turnaround as it has secured a long term 2 1 1 year contract with Petronas for all its rigs. Besides that, higher regional DCR relative to local DCR would reduce competition from foreign players for local projects, in our view.
Reiterate our BUY call on Velesto with a TP RM0.28. Velesto risk-to-reward is really attractive given its stock price that is currently lagging crude oil prices.
Asset Utilisation Rate Rebounded Off its Low
Velesto recorded a marked improvement in 1Q22 after revenue jumping by 76% YoY to RM77.4m on the back of higher jack-up rig utilisation rate (UR) of 39% (vs 1Q21: 28%). While this is still less-than-optimal for UR, it helped to reduce its core loss by 24% YoY to RM46m (1Q21: LAT RM61m). Notably, 1Q21 UR of 28% was its weakest since the start of the pandemic in April 2020.
The Worst is Truly Over…
We expect a much stronger 2H22 earnings as the company has secured new work orders for its NAGA 2 and NAGA 6 rigs from Vietnam and Petronas Carigali. We believe this will push its UR to above 70% which will help the company to record quarterly profits from 2H22 onwards. Overall, we see light at the end of tunnel for Velesto after it secured a long-term 2 1 1 years umbrella contract from Petronas for all 6 rigs beginning 1Q22. Note that Velesto is the sole rig provider that has secured this type of contract from Petronas. Thus, any work order from Petronas will directly translate into revenue, though the overall utilisation would still depend on Petronas’ drilling schedule as well as availability of the rigs. Notwithstanding that, full asset utilisation is likely in near future as demand is projected to be strong. Based on Petronas Activity Outlook 2022-2024, Petronas expects demand for jack-ups to stand at 9/9/16 units in FY22F/FY23F/FY24F. On top of that, rising demand from the Middle East has led to tight supply in South East Asia (SEA) - resulting in higher daily charter rate (DCR) in the region as compared to local DCR. We gathered that regional jack-up rig marketed UR stood at 92% vis-à-vis 73% for local rigs in April 2022. There are more idle rigs in the region being reactivated including Sapura Energy’s tender rigs which confirms a tight market condition.
Maintain BUY call with TP of RM0.28
Reiterate our BUY call on Velesto with unchanged TP of RM0.28 pegged at 1x FY22F P/B. We believe Velesto’s turnaround is around the corner premised on (i) rising demand for jack-up rig and therefore, recovery in UR and (ii) normalise COVID-19 cost to improve bottom line as the country enters into endemicity.
Velesto Energy - Jack-up Market is Booming Publish date: Tue, 05 Jul 2022, 04:44 PM Velesto rebounded from its weakest quarter in 1Q21 with utilization rate rising to 39% in 1Q22, boosting its revenue by 76% YoY and paring down its losses by 24%. We believe Velesto is on the cusp of turnaround as it has secured a long term 2 1 1 year contract with Petronas for all its rigs. Besides that, higher regional DCR relative to local DCR would reduce competition from foreign players for local projects, in our view. Reiterate our BUY call on Velesto with a TP RM0.28. Velesto risk-to-reward is really attractive given its stock price that is currently lagging crude oil prices. Asset Utilisation Rate Rebounded Off its Low
Velesto recorded a marked improvement in 1Q22 after revenue jumping by 76% YoY to RM77.4m on the back of higher jack-up rig utilisation rate (UR) of 39% (vs 1Q21: 28%). While this is still less-than-optimal for UR, it helped to reduce its core loss by 24% YoY to RM46m (1Q21: LAT RM61m). Notably, 1Q21 UR of 28% was its weakest since the start of the pandemic in April 2020.
The Worst is Truly Over…
We expect a much stronger 2H22 earnings as the company has secured new work orders for its NAGA 2 and NAGA 6 rigs from Vietnam and Petronas Carigali. We believe this will push its UR to above 70% which will help the company to record quarterly profits from 2H22 onwards. Overall, we see light at the end of tunnel for Velesto after it secured a long-term 2 1 1 years umbrella contract from Petronas for all 6 rigs beginning 1Q22. Note that Velesto is the sole rig provider that has secured this type of contract from Petronas. Thus, any work order from Petronas will directly translate into revenue, though the overall utilisation would still depend on Petronas’ drilling schedule as well as availability of the rigs. Notwithstanding that, full asset utilisation is likely in near future as demand is projected to be strong. Based on Petronas Activity Outlook 2022-2024, Petronas expects demand for jack-ups to stand at 9/9/16 units in FY22F/FY23F/FY24F. On top of that, rising demand from the Middle East has led to tight supply in South East Asia (SEA) - resulting in higher daily charter rate (DCR) in the region as compared to local DCR. We gathered that regional jack-up rig marketed UR stood at 92% vis-à-vis 73% for local rigs in April 2022. There are more idle rigs in the region being reactivated including Sapura Energy’s tender rigs which confirms a tight market condition.
Maintain BUY call with TP of RM0.28
Reiterate our BUY call on Velesto with unchanged TP of RM0.28 pegged at 1x FY22F P/B. We believe Velesto’s turnaround is around the corner premised on (i) rising demand for jack-up rig and therefore, recovery in UR and (ii) normalise COVID-19 cost to improve bottom line as the country enters into endemicity.
KUALA LUMPUR (Aug 10): Velesto Energy Bhd announced that it had completed the offline capabilities upgrading works for NAGA 5 and NAGA 6, making them the first Malaysian jack-up drilling rigs to be equipped with offline capabilities.
The offline capabilities of the two jack-up rigs will reduce the total time spent on wells, as the rigs are able to do multiple scopes of activities while drilling, said Velesto in a statement on Wednesday (Aug 10).
With fewer rig days per well, Velesto said the offline capabilities will help to bring down the overall drilling project cost for clients, and indirectly reduce the industry’s emission footprint. The oil and gas offshore drilling services provider said these upgrades will cater to clients’ requirements, and increase the competitiveness of these rigs during contract bidding.
“This is the first time that Velesto has carried out upgrades for its jack-up rigs. Given the current upward trend in the drilling segment, the successful completion could not be timelier. It also reflects our commitment to our clients in driving performance through operational excellence, while ensuring the highest level of safety.
“The offline capabilities will further strengthen Velesto’s value creation as a local company on a par with global players, offering sustainable competitive advantages,” said Velesto president Megat Zariman Abdul Rahim.
Earlier this year, NAGA 5 secured a work order from PTTEP HK Offshore Ltd, and NAGA 6 from Petronas Carigali Sdn Bhd.
NAGA 5 commenced its operations in July, while NAGA 6 is expected to commence operations towards the end of August, within Malaysia, upon the completion of the upgrades.
At the time of writing on Wednesday, Velesto was up half a sen or 6.67% at eight sen, giving it a market capitalisation of RM620.73 million.
Good news ! meaning two more rigs Naga 5 & 6 to be called upon opeperation in July & August ! Hope they can achieve UR of at least 70% then only got hope of delivering profit !! If more contract won, UR reach 90% and above with good prevailing charter rate of at least USD100,000 per day (with strong USD some more for currency gain) , TP RM0.30 is coming soon !!!!
bring down to 6 c then fry fry and fry to 11 c, syok sendiri with 5 c margin.. then tomorrow the unknown editor story teller bring up with fake news to investor about rising price for trap newbies to holland.. very not good ethic..
Velesto got long way to go before reach the TP target. Still in initial recovery stage. Can expected good TP return next year onward only....except the reality. Just collect as much as you can and harvest it next year.
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daneilchoong
141 posts
Posted by daneilchoong > 2022-07-27 09:35 | Report Abuse
velesto also pnb punya ka.push la