KUALA LUMPUR, Nov 23 — Hibiscus Petroleum Bhd will continue to be a clear beneficiary of a higher crude oil price environment in the medium term as the industry is now in a severely under-invested phase due to expectations for record-high oil demand next year.
The group aims to achieve first oil from its SF30 Waterflood Phase 2 in the North Sabah production sharing contract, where the development entails six water injectors and five infill wells, in early-2025, as well as its Teal West field in the North Sea in the second half of 2025, Maybank Investment Bank (Maybank IB) said in a note today.
“From yesterday’s results briefing, Hibiscus guided that its offtake volume in the second quarter financial year 2024 (2Q 2024) will be slightly lower at 1.9 million barrels of oil equivalent (boe).
“Coupled with highly likely lower average crude oil prices over October-December 2023, we expect the group to rake in slightly weaker profits in 2Q 2024. However, on a full-year basis, we are looking at an earnings per share (EPS) growth of 7.0 per cent year-on-year,” it said.
Hong Leong Investment Bank (HLIB) deems that Hibiscus’ 1Q 2024 results to be within its full financial year estimates as Hibiscus will likely deliver lower profits in the coming quarters due to lower guided offtake volume.
“We maintain our FY2024 forecasts but cut our FY2025/2026 earnings by 17.4 and 7.9 per cent respectively, as we previously imputed contribution from Teal West starting from the middle of FY2025. Due to the expected delay of first oil, we now assume Teal West to achieve first oil in FY2026.
“We believe that Hibiscus is a compelling case and is conspicuously undervalued given its strong foothold in the upstream energy sector,” it said. — Bernama
