KUALA LUMPUR: With oil prices currently stable at above US$60 a barrel, analysts expect it will provide further upside to Hibiscus Petroleum Bhd’s earnings.
Public Investment Bank (PublicInvest) said the oil company has sold about 797,914 barrels of crude oil in the first half of its financial year 2019 at an average realized oil price of US$68.45 per barrel for its Anasuria Cluster asset.
For its second quarter of the financial year, 274,015 barrels of crude oil were sold at US$58.08 a barrel, it added.
“The asset achieved average uptime of 94 per cent in the second quarter and average daily oil equivalent production rate of 4,416 boe a day,” PublicInvest said.
This represents the highest production rate achieved since the acquisition in March 2016, largely driven by the contribution from the GUA-P2 side track well which commenced in September 2018, it added.
For North Sabah, PublicInvest said the asset sold 888,910 barrels of crude oil including 293,624 in the second quarter of financial year 2019, at an average realised oil price of US$76.15 a barrel.
As a result, Hibiscus Petroleum’s total revenue of RM525.1 million in the first half of the financial year was higher by over 100 per cent year-on-year.
In tandem with higher revenue, the group reported a core net profit of RM148.7 million during the period against RM33.2 million in the first half of financial year 2018.
“We remain positive on Hibiscus Petroleum’s long-term earnings outlook given its ongoing initiatives to constantly increase production levels in enhancing shareholder value,” PublicInvest said.
PublicInvest has affirmed its “outperform” call on Hibiscus Petroleum with an unchanged target price of RM1.73.
BIMB Securities Research said recent recovery in oil prices could be an immediate catalyst to Hibiscus Petroleum’s share price in the near term.
“We expect earnings to pick up in the second half of its financial year 2019 in anticipation of North Sabah output normalising and production ramp up at Anasuria’s GUA-P2 well which were kept below maximum rate to ensure stabilized production over the longer term,” it said.
BIMB has a “buy” call on Hibiscus Petroleum with a target price of RM1.60.