Q2 FY2024 Results Briefing Webcast

Summary

The transcript details a financial briefing by Hibus Petroleum for Q2 FY2024, highlighting a significant quarter with the company's first achievement of over 22,000 barrels of oil equivalent per day in production. Despite a dip in oil and condensate sales, the company produced more oil and gas than the previous quarter. They remain on track to meet their 2024 sales target of 7.5 to 7.8 million barrels oil equivalent. Financially, they reported a revenue of $62.76 million, influenced by lower oil prices, and declared a second interim dividend of 2 cents per share. The briefing also covered operational updates, reserve and resource numbers, and future growth strategies, including potential acquisitions and the importance of maintaining a strong financial foundation. The company is actively exploring new opportunities and is committed to doubling production by 2026, with a focus on the right assets at the right price. Management also addressed concerns about geopolitical risks and the importance of health and safety, legal regulatory stability, and long-term decommissioning considerations in their investment decisions.

Takeaways

• 📈 The company achieved a significant milestone by producing above 22,000 barrels of oil equivalent per day for the first time in Q2 2024.
• 📉 Despite higher production, the total oil and condensate sold was lower compared to the previous quarter due to the timing of offshore tankings.
• 💰 Revenue for the quarter decreased by 15.9% to 627.6 million ringgit, primarily due to lower oil prices.
• 📊 The company is on track to meet its 2024 sales target of between 7.5 and 7.8 million barrels of oil equivalent.
• 🌐 Exploration drilling has commenced with four targets, and the first two have been completed with data analysis underway.
• 🇲🇾 In Malaysia, the North Saba field has seen significant production improvements following drilling activities and maintenance completion.
• 🇬🇧 The UK cluster has submitted a concept select report for the Fine field and has acquired five new blocks in the Central North Sea.
• 🔋 The company declared a second interim dividend of 2 cents per share for the fiscal year 2024 and has completed a share buyback of 3 million shares.
• 📊 Operational costs have slightly improved in some areas due to higher production numbers, contributing to maintaining a profit margin exceeding 50%.
• 🎯 The company is actively looking for acquisition opportunities to close the gap towards its 2026 target of 35,000 to 50,000 barrels of oil equivalent per day.
• 🌟 The company emphasizes the importance of health and safety, regulatory stability, and geopolitical risks when considering new investments or acquisitions.

Q & A

What was the significant achievement in the first quarter of the financial year 2024 for Hius Petroleum?

The significant achievement was that it was the first quarter that Hius Petroleum achieved above 22,000 barrels of oil equivalent per day in terms of production.

What was the total oil and condensate sold in the second quarter of the financial year 2024 compared to the previous quarter?

The total oil and condensate sold was a bit lower in the second quarter compared to the previous quarter, which was mainly due to the timing of the off-takes.

What was the revenue generated for Hius Petroleum in the second quarter of the financial year 2024?

The revenue generated was 627.6 million ringgit, which was lower than the previous quarter, primarily due to lower oil prices.

What is the target for the full financial year 2024 in terms of dividends per share?

The target for the full financial year 2024 is to provide at least 7.5 cents per share in dividends.

What were the highlights of the exploration drilling activities in the recent quarter?

The highlights include the commencement of exploration drilling with four targets in total. The first two targets have been completed and analyzed, and drilling is currently ongoing for the third target.

What is the status of the Te West project?

Drilling for the Te West project is set to commence in the middle of the financial year 2025, with the first oil targeted towards the end of the calendar year 2025.

What improvements were noted in the production levels across the producing assets?

There was a significant improvement in production on the back of completed planned maintenance activities. Notably, the wells drilled in 2023 in Peninsula have contributed to the production increase.

What is the current operational cost per barrel of oil equivalent (Boe) for the North Saba and Peninsula assets?

The unit operating cost slightly improved in North Saba to about $30.7 per barrel, while for Peninsula, it is $26.75 per Boe.

What was the impact of the drilling campaign on the Kinabalu PSC in terms of net production numbers?

The drilling of two infield wells completed in 2023 led to a significant improvement in net production numbers, increasing from 2,700 barrels per day in the previous quarter to 4,096 barrels per day in the last quarter.

What is the company's strategy for acquisitions to achieve the 2026 target of 35,000 to 50,000 barrels of oil equivalent per day?

The company is continuously prospecting the market for acquisitions that fit their criteria of being the right asset at the right price and at the right time. They aim to close the gap of approximately 10,000 barrels of oil equivalent per day to meet their 2026 target.

What factors does the management consider when assessing the risk of acquiring assets in different regions, such as geopolitical and legal regulatory risks?

Management considers several factors including geopolitical risks, stability of the legal framework, long-term decommissioning rules, and the company's ability to survive if an asset has to be written off due to unforeseen circumstances. They aim to avoid situations where force majeure measures may be invoked and ensure the company can stand on its feet even if an asset fails.