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Date Articles
24 September 2018
SPANGEL
Hibiscus completed its first infill drilling project at Anasuria with sidetracking the P2 well at Guilemot A field (GUA-P2) in early Sep 2018. We expect the well to contribute no less than 500 bpd of additional barrels, bringing Anasuria average oil production to 4,000 bpd (net to Hibiscus) in FY19.
30 August 2018
SPANGEL
Hibiscus Petroleum’s (Hibiscus) reported headline profit of RM203.7m (+92% YoY) largely driven by a negative goodwill amounting to RM206.3m. Excluding this coupled with other exceptional items, FY18 core net profit jumped by 192.8% YoY to RM65.2m on the back of a 50.9% increase in revenue. The results were below our and consensus expectations making up only 48.3% and 91.6% respectively. The variation on our part was due to our expectation of two lifting in June 2018 from Anasuria field. For the first three quarters in FY18, performance was solely contributed by its Anasuria asset while the 4QFY18 was mainly aided by the North Sabah field upon completion of its acquisition on 31st March. There were no offtakes during the quarter from Anasuria as it was postponed to 2nd July 2018 due to operational efficiencies and safety concerns. FY19 will undoubtedly be a more exciting year as there will be full contribution from the North Sabah asset and higher levels of production from both assets at a combined value of about 9,500bbls/day, coupled with the steady-state in crude oil prices at USD60-70/bbl. Our Outperform rating on the stock is reaffirmed with a higher DCF derived TP of RM1.73 (RM1.08 previously), largely on account of higher crude oil prices assumed (USD60/bbl vs USD50/bbl) and changes in production and reserves assumptions.
22 February 2018
SPANGEL
Our sector’s top pick. We believe earnings will be significantly stronger in 2HFY18, supported by the completion of recent enhancement works on Anasuria Cluster and an ongoing oil price rebound. Moreover, the impending completion of the acquisition of North Sabah EOR PSC, slated for end-3QFY18, will more than double its earnings in FY19 and this will provide further icing on the cake to our FD core EPS CAGR forecast of 102% over FY17-20F. As a pure oil & gas exploration and production player, Hibiscus is the best Malaysian proxy to rising oil prices
22 February 2018
SPANGEL
Hibiscus Petroleum’s 1HFY18 pretax profit of RM22.8m was higher 30.6% YoY, reflective of higher average crude oil prices recognized during the period, which could otherwise have been higher if not for certain operational challenges encountered during the quarter under review. Reported net profit was 76.0% lower YoY however, due to a huge reversal in deferred tax liabilities in the previous corresponding period (1HFY17). While we continue to believe completion of the North Sabah deal is on hand, we are now only accounting for a quarter’s contribution from the asset, resulting in FY18 forecasts being lowered by 49.9% but which will have no effect on our sum-of-parts based valuations. We understand the accounting treatment post-completion of the North Sabah deal would be akin to the Anasuria acquisition, in which a relatively large negative goodwill amount could be recorded. We remain positive on Hibiscus’ long-term prospects given its ongoing initiatives to constantly increase production levels in enhancing shareholder value. Our Outperform call is affirmed, with TP lifted slightly to RM1.08 (RM1.06 previously) as we roll over our DCF-based valuations to FY19 while also making slight adjustments to our forex and crude oil price assumptions.
22 February 2018
SPANGEL
Hibiscus’ 2QFY18 came in below our expectation as production was interrupted by a temporary hiccup, exacerbating production decline due to a planned total shutdown of the Anasuria FPSO. As such, 2QFY18 core EBITDA fell 23% yoy to RM31.2m, negated by higher ASP and inventory drawdown. Revenue rose 21% yoy as it sold 275k bbl (comprise of estimated net production of 186k bbl and 90k bbls from inventories) of crude oil at US$62.9/bbl (1Q17: 299k bbl @ $41.7/bbl). Overall, 1H18 core profit was only 29%/16% of ours/consensus FY18 estimate respectively.
12 January 2018
SPANGEL
We recently met with Dr. Kenneth Pereira, Managing Director of Hibiscus Petroleum, and discussed the evolution of Hibiscus Petroleum’s business from the US$100/bbl oil era in 2014 (see our previous note on the company), to its survival during the tough years for the oil industry of 2015-16, to now being a ~3200 bpd producing company (U.K. North Sea assets with attributable 2P reserves of 22.7 mmboe) with what management sees as upside potential via its: (1) recently acquired (completion targeted by Mar-18) Malaysia EOR asset, North Sabah (attributable 2P reserves of 31 mmboe); and (2) exploration assets in Australia (recoverable resources of 50.9 mmboe in a “low case” scenario).
8 January 2018
SPANGEL
Initiate coverage on Hibiscus Petroleum (Hibiscus) with BUY call. Our TP of RM1.48 is derived using the DCF method which only accounts for its active upstream production assets namely the Anasuria Cluster and North Sabah EOR PSC but excludes Hibiscus’ Australian assets. The collapse of oil prices in 2014 was a blessing in disguise for Hibiscus as it managed to undertake opportunistic acquisitions of the Anasuria Cluster in North Sea and the North Sabah enhanced oil recovery (EOR) production sharing contract (PSC). The completion of the acquisition of the Anasuria Cluster in Mar 2016 led to a turnaround from an FY16 core net loss of RM145m to an FY17 core net profit of RM29m. The impending completion of the acquisition of North Sabah EOR PSC, slated for end-1QCY18, will more than double its earnings in FY19. Recent enhancement works on Anasuria Cluster and an ongoing oil price rebound provide further icing on the cake that underpins our FD core EPS CAGR forecast of 102% over FY17-20F. As a pure oil & gas exploration and production player, Hibiscus is the best Malaysian proxy to rising oil prices.
06 December 2017
SPANGEL
Hibiscus Petroleum (Hibiscus) has received Petronas Carigali Sdn Bhd’s (PCSB) unconditional consent under the joint operating agreement (JOA) to the assignment of Shell’s 50% interest in the 2011 North Sabah Enhanced Oil Recovery (EOR) production sharing contract (PSC). We are elated by this news, knowing that the deal is another step closer to completion. Our current valuation of Hibiscus includes the North Sabah acquisition based on its proven and probable (2P) reserves only, which we believe would add another RM0.48 to the Group’s underlying fair value of RM0.58. With this announcement, our Outperform call with TP of RM1.06 premised on our sum-of-parts valuation is reaffirmed further, as we believe the acquisition has an even higher probability of coming to pass now.
29 November 2017
SPANGEL
Hibiscus Petroleum’s (Hibiscus) 1QFY18 revenue improved to RM58.2m (+6.4% YoY, -21.8% QOQ) while recording a core net profit of RM12.8m, supported by higher average prices recorded for oil sold in the quarter (1QFY18: USD51.54/bbl vs. 1QFY17: USD45.21/bbl). This quarter however saw about 15 days of shutdown for initiatives undertaken to improve daily oil production rates up to c.5,000bbls/day net oil to Hibiscus by FY20. Numbers were weaker sequentially, but will see better results 2Q onwards with additional production of c.665bbls/day from the Anasuria Cluster due to the recent enhancement projects, while also assuming higher oil price levels. 1QFY18 net profit estimates are deemed in line albeit only meeting 5% of ours and 7% of consensus’ estimates, due to our inclusion of the North Sabah acquisition which we assume to begin contribution 2HFY18. We remain positive on Hibiscus with an Outperform call and an unchanged TP of RM1.06 premised on our sum-of-parts valuation. Our valuation includes the upcoming North Sabah acquisition based on its proven and probable (2P) reserves only, which we believe would add another RM0.48 to the Group’s underlying fair value of RM0.58.
26 September 2017
SPANGEL
We continue to like Hibiscus as it provides direct exposure to the upstream business which is poise to benefit from the recovery in crude oil prices.

We remain excited with its earnings prospect over FY18-20F on the back of higher production from Anasuria and the potential structural growth arising from the new PSC role in North Sabah.

Maintain BUY call with a revised DCF-derived TP of RM0.85 (from: RM0.65, WACC: 9.0%). Our strong conviction on Hibiscus is also underpinned by its business model which is focused on acquiring quality producing assets from major oil companies.
20 September 2017
SPANGEL
Possible for chart pattern breakout. Attempted for breakout of range trading channel, HIBISCS is poised for further upside should resistance level of RM0.470 be genuinely broken. Bullish RSI and MACD indicators signal reasonable entry level, with anticipation of continuous improvement in both momentum and trend in near term to lift price higher to the subsequent resistance levels of RM0.510 and RM0.550.
20 September 2017
SPANGEL
Hibiscus Petroleum (Hibiscus) continues to deliver production from its first producing field, the Anasuria Cluster in UK with average c.3500bbls/day, anchoring its position more prominently amongst its oil peers. We remain positive on the Group's performance, reaffirmed by its ability and perseverance to continue securing producing assets. In October 2016, the Group announced another milestone, the conditional sale and purchase agreement (SPA) for the Group to acquire the 50% stake of the North Sabah Enhanced Oil Recovery (EOR) PSC. We are initiating coverage on Hibiscus with an Outperform call with a TP of RM1.06 premised on our sum-of-parts valuation. Our valuation is based on the relative undervaluation of Hibiscus' Anasuria Cluster asset valued at RM0.58 based on our DCF valuation with an 11.0% WACC, and after close review of its upcoming North Sabah acquisition based on its 2P reserves only, we believe would add another RM0.48 to the Group's fair value.
07 August 2017
SPANGEL
We initiate coverage on the small cap upstream producers namely Hibiscus Petroleum (BUY, TP: RM0.65) and DNeX (HOLD, TP: RM0.60). These companies have common exposures to the Anasuria oilfield cluster in the North Sea.

We prefer Hibiscus Petroleum over DNeX as the former is a full-fledged exploration and production (E&P) company with cash-generating assets. While most oil and gas services companies struggle to retain and secure new jobs Hibiscus Petroleum has opted to grow within the upstream segment which is less dependent on the capex spending of oil majors.

The headwinds in oil and gas market had opened the doors for Hibiscus to acquire assets at bargain prices. Hibiscus has capitalised the low oil price environment well to acquire two late-life oilfields namely the Anasuria cluster and the North Sabah Enhance Oil Recovery (EOR) Production Sharing Contracts (PSC) while DNeX has acquired a 15% stake in Anasuria cluster via Ping Petroleum.
09 January 2017
SPANGEL
Hibiscus Petroleum has come away from its special purpose acquisition company (SPAC) status to qualify as a O&G production and development company. We believe contributions delivered from its first producing field, the Anasuria Cluster in UK, has anchored its position more prominently amongst its oil peers. We are thus reviewing Hibiscus, premised on the undervaluation of its Anasuria Cluster asset valued at RM0.60 based on our DCF valuation with an 11.0% WACC. There is also further potential upside, with the conditional sale and purchase agreement (SPA) for the Group to acquire the 50% stake of the North Sabah Enhanced Oil Recovery (EOR) PSC, a partnership with Petronas Carigali which seems within reach, expected latest mid-2017. As a sweetener to the acquisition if successful, the deal structure will recognize contributions to the Group back-dated from 1 January 2017 onwards.
05 September 2016
SPANGEL
Hibiscus Petroleum Berhad ("Hibiscus") is Malaysia's first listed independent oil and gas (O&G) exploration and production (E&P) company. Hibiscus Petroleum was listed on the Main Market of Bursa Malaysia Securities Berhad in July 2011 as the first Special Purpose Acquisition Company (SPAC). Since then, Hibiscus is also the only SPAC in Malaysia successful in acquiring a Qualifying Asset (QA).
15 July 2016
SPANGEL
On Aug 6, 2015, Hibiscus Petroleum Bhd (Hibiscus) and Ping Petroleum signed two sale and purchase agreements to acquire Shell and Esso's interests in the Anasuria Cluster in the North Sea, UK for USD105m (RM420.0m). Hibiscus' portion of USD52.5m (approximately RM210.0m) equates to 50% of the interests while Ping Petroleum holds the remainder. The deal also included infrastructure related to the cluster, which includes the Anasuria floating, production, storage and offloading (FPSO) vessel.
20 July 2015
SPANGEL
With an active exploration and appraisal programme, as well as potential acquisition of production assets, in line with its balanced approach to its portfolio, Hibiscus is well placed to capitalise on the current operating environment and the eventual upswing in prices when they occur. We initiate coverage with a BUY recommendation and a MYR1.78 Target Price.
30 July 2013
UOB
We understand that drilling on Oman Block 50 (HIBI's 35%-owned associate, Lime Petroleum Plc (LIME), has a 64% stake in this block) is scheduled to commence in Sep 13. As Oman Block 50 has an estimated 200m barrels of prospective recoverable resources, striking oil is key to the rerating of HIBI's share price. On the other hand, HIBI's JV partner, Rex International (Rex Intl), will be listed on Singapore Exchange's Catalist Board on 31 Jul 13. Should Rex's IPO listing be well received, there could be a positive spillover effect on HIBI's share price.
04 July 2013
UOB
Listed in Jul 11 as the first Special Purpose Acquisition Company (SPAC) in Southeast Asia, Hibiscus Petroleum (HIBI) focuses on investment in small- to medium-sized oil and gas fields in the Asia and Oceania regions. HIBI completed its first investment in April 2012 through the acquisition of a 35% stake in Lime Petroleum Plc (Lime), which owns the rights for exploration and production for four concessions in the Middle East and five in Norway. HIBI subsequently acquired a 13% stake in Australian-listed 3D Oil Ltd (3D Oil) and recently formed a JV partnership with Rex South East Asia Ltd to identify exploration and production (E&P) opportunities in the Asia Pacific region. While HIBI has yet to produce its first barrel of oil, some of its explorations have yielded promising results.
28 June 2013
RHB
We recently visit Hibiscus Petroleum (HIBI), the first special purpose acquisition company (SPAC) listed on Bursa Malaysia. After speaking with Management, we came to the conclusion that the company's share price may be worth MYR1.18 to MYR2.77. We believe that the stock may suit the needs of investors seeking: i) to participate in the long-term uptrend in oil prices and ii) potential discovery of oil in the company's oil concessions.
18 November 2011
RHB
Since its listing on 25 Jul, Hibiscus's share price briefly rose to a high of 61.5 sen on 1 Aug before buying interest wanes (as seen in the decline in trading volume during the period), pushing the share price down to a low of 52 sen in early-Aug.
15 November 2011
RHB
Qualifying acquisition identified. Less than four months after it was listed, Hibiscus announced its "qualifying acquisition" (QA) involving a 35% equity stake in an early-stage exploration company called Lime Petroleum with three assets in the UAE and Oman. The acquisition is a combination of new equity injection into Lime and vendor shares from Rex Oil & Gas Ltd (Lime's originator for the Middle East assets and owner of proprietary exploration technologies). The total cash consideration of US$55m (or RM172.1m) meets the minimum requirement of RM168m to be spent for the QA under the SPAC listing requirements. The proposal - subject to approvals from Securities Commission and shareholders (excluding management's 20%) - is expected to be completed by 1HCY12.
03 October 2011
HWANGDBS
The only SPAC in Malaysia. Hibiscus Petroleum (Hibiscus; Bloomberg: HIBI MK, Market cap RM228m) is the first special purpose acquisition company (SPAC) to be listed in Malaysia. It aims to establish itself as an O&G exploration and production (E&P) company.It has no operations or income generating business at the point of IPO, but the proceeds raised would be utilised to make acquisitions aligned to its objective of becoming a junior independent O&G E&P player in the near to medium term.
26 July 2011
RHB
Arbitrage opportunity. We believe the market mispriced the shares of Hibiscus Petroleum, Malaysia's first SPAC listing yesterday. At the close of trading on its first day of listing, the share price was at RM0.535, or 28.7% below the IPO price of RM0.75. The Hibiscus warrants closed at RM0.14. Together, the two instruments have a combined value of RM0.675, i.e. at the 90% refund value as stipulated under the Securities Commission's SPAC listing rules...
11 July 2011
RHB
First SPAC in Malaysia. Hibiscus Petroleum will be the first "Special Purpose Acquisition Company (SPAC)" to be listed on Bursa Malaysia. SPACs are companies which have no operations or income-generating business but undertake an IPO for the purpose of raising funds for a qualifying acquisition (QA) i.e. to acquire operating companies or businesses. The company intends to establish itself as junior independent oil and gas with E&P assets that are low to moderate risk (either onshore and/or in low-risk shallow water) predominantly in South Asia, Middle-East, East Asia and Oceania regions...