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.

Outlines

00:00

😀 Introduction and Q2 2024 Financial Results Overview

The video script begins with an introduction by Liy Ling, VP of Corporate Development, who is joined by various team members including the CFO and VP of Economics and Business Planning. They discuss the release of the company's Q2 2024 financial results and operational updates. The company has achieved a new production milestone of over 22,000 barrels of oil equivalent per day. There's a mention of a slight decrease in total oil and condensate sold due to timing of offtakes, but overall production has increased. Financially, the company generated a revenue of 627.6 million ringgit, influenced by lower oil prices. A second interim dividend of 2 cents per share is declared for the fiscal year 2024, and the share buyback of 3 million shares has been completed.

05:00

📈 Operational and Financial Performance for Q2 2024

The second paragraph focuses on the operational and financial performance of the company during the second quarter of the fiscal year 2024. It highlights that the realized oil and condensate price was $90 per barrel, with an integrated gas price of about $70 per barrel of oil equivalent (Boe). The company sold 1.8 to 1.9 million barrels of oil equivalent, and is on track to deliver approximately 7.7 million barrels of oil equivalent for the fiscal year. The production and unit operating costs are discussed, with improvements noted in several assets. The company's operational highlights include Kinabalu PSC's significant improvement due to drilling activities and the PM3 CA PSC's sustained oil production. Exploration activities are also covered, with updates on drilling targets and participation in licensing rounds.

10:02

🌟 Reserves and Resources Update

The third paragraph provides an update on the company's reserves and resources. It details the 2P (Proven and Probable) reserves and 2C (Contingent) resources for the Habiscus group as of January 1, 2024. The total 2P oil and condensate reserves are reported to be around 60 million barrels of oil equivalent, with 49.9 million barrels being oil and condensate, and 11 million barrels being gas. The 2C oil resources are estimated at 59 million barrels, mainly from the Marold field. The paragraph also discusses the company's forward plans, including the development of assets in the UK and the expectation of first oil from the Te West project by the end of 2025.

15:04

📊 Profit Margin and Balance Sheet Analysis

The fourth paragraph delves into the company's profit margin and balance sheet. Despite a decrease in revenue due to lower oil prices and a reduction in offtakes in North Saba, the company has managed to maintain a profit margin exceeding 50%. The operational results have improved significantly, particularly due to the completion of planned maintenance activities in the Malaysian PSC. The depreciation and amortization of non-current assets have increased, which has slightly impacted the profit margin. The tax situation is stable, and the company has a healthy cash position, allowing it to support capital expenditure programs and consider new opportunities.

20:06

🎯 Future Projections and Growth Strategy

The fifth paragraph outlines the company's projections for the current year and its growth strategy. The company is on track to meet its production guidance of 7.5 to 7.8 million barrels of oil equivalent for the fiscal year, which represents an improvement over the previous year. The company has provided detailed breakdowns of oil and gas deliveries and is actively seeking acquisitions to achieve its 2026 target of 35 to 50,000 barrels of oil equivalent per day. The company is also focused on organic growth through projects like Teal West and sf30 water flood, and it emphasizes the importance of securing the right assets at the right price and time.

25:07

🏗️ Project Updates and Exploration Activities

The sixth paragraph provides updates on important projects for the next year, including Teal West and sf30 water flood, and emphasizes the commitment of significant capital expenditure to these projects. The company is also actively scanning various opportunities for acquisitions, with a focus on being funded and ready to make bold statements about their financial capabilities. The paragraph also touches on operational improvements, maintenance catch-up post-COVID period, and the importance of keeping unit production costs at current levels while maintaining asset integrity and uptime.

30:09

🤝 Acquisition Strategy and Exploration Insights

The seventh paragraph discusses the company's acquisition strategy and its approach to exploration. The company is looking to close a gap of about 10,000 barrels of oil equivalent per day to meet its targets and is actively seeking the right assets at the right price. It also addresses the company's satisfaction with reserve replenishment activities and its commitment to exploration, including drilling activities and the pursuit of new resources. The company's approach to risk assessment, considering geopolitical and legal regulatory risks, is also highlighted.

35:10

🔍 Exploration Wells and PM3 CAA Extension

The eighth paragraph provides insights into the company's exploration wells, noting that while some data is available, technical work and partner agreement are necessary before definitive statements can be made. It also addresses the progress of the PM3 CAA extension, with regulatory meetings held and a key principal agreement aimed to be in place by the end of the year. The importance of timely agreement to avoid deferred developments and potential production drops is emphasized.

40:12

🌐 Geopolitical Risks and Asset Considerations

The ninth paragraph focuses on the company's considerations regarding geopolitical risks and legal regulatory stability when assessing potential assets or blocks. It discusses the importance of evaluating long-term decommissioning rules and the potential impact on the company's ability to survive if an asset were to go wrong. The company's approach to risk assessment and its commitment to transparency are highlighted, with the mention of releasing the webcast recording of the briefing on their website.

45:13

📅 Closing Remarks and Upcoming Webcast Release

The final paragraph consists of closing remarks from the company, thanking participants for attending the briefing and reminding them that the recording will be available on the company's website the following day. The company encourages any further questions and wishes everyone to stay safe.

Keywords

💡Barrels of Oil Equivalent (BOE)

Barrels of Oil Equivalent is a unit of measurement used in the oil and gas industry to quantify the energy content of different hydrocarbons on a common basis. It is used to simplify comparisons between different types of hydrocarbons, such as oil, condensate, and natural gas. In the script, the company discusses achieving production of over 22,000 BOE per day, which is a significant milestone.

💡Revenue

Revenue refers to the income generated from the sale of goods or services. It is a key financial metric that indicates a company's financial performance. The script mentions a decrease in revenue primarily driven by lower oil prices, which impacted the company's financial results for the quarter.

💡Interim Dividends

Interim Dividends are payments made to shareholders during a company's fiscal year, in addition to the final or annual dividend. They provide investors with an income stream and can be an indicator of a company's financial health. The script notes that the company declared a second interim dividend of 2 cents per share for the fiscal year 2024.

💡Exploration Drilling

Exploration Drilling is the process of drilling into the earth to discover new reserves of oil or gas. It is a critical activity for oil and gas companies seeking to grow their reserves and production capabilities. The script highlights that the company initiated exploration drilling and completed two targets, with analysis of the data underway.

💡Reserves and Resources

Reserves are the quantities of oil and gas that are economically and legally available for extraction at a given time. Resources, on the other hand, are the total quantities of hydrocarbons available, which may include reserves as well as other potential quantities that are not yet commercially viable. The script provides an update on the company's 2P reserves and 2C resources, reflecting their production strategy and potential for future growth.

💡Production Cost

Production Cost refers to the total expenses incurred in extracting and processing oil and gas. It is a critical factor in determining the profitability of an operation. The script discusses unit operating costs, which slightly improved in certain areas due to higher production numbers, indicating better operational efficiency.

💡Capital Expenditure (CapEx)

Capital Expenditure refers to funds used by a company to acquire or upgrade physical assets, such as property, industrial buildings, or equipment. In the context of the script, CapEx is mentioned in relation to the sf3 water flood project and other developments, which are essential for increasing production and maintaining the company's asset base.

💡Share Buyback

A Share Buyback is when a company repurchases its own shares from the market, which can increase the value of remaining shares and is often seen as a sign of financial confidence. The script indicates that the company has set aside a budget for share buybacks and will be opportunistic in its approach, depending on market conditions.

💡Operational Metrics

Operational Metrics are the measures used to assess the efficiency and effectiveness of a company's operations. They can include production levels, costs, and other performance indicators. The script provides operational highlights and metrics for each of the company's producing assets, which are crucial for understanding the company's performance.

💡Financial Year (FY)

A Financial Year, or Fiscal Year, is the 12-month period used by businesses to calculate their financial performance. It may or may not align with the calendar year. The script references FY 2024, during which the company is providing guidance on production, dividends, and other financial expectations.

💡Maintenance Activities

Maintenance Activities refer to the routine work performed to keep equipment and facilities in good working order. In the script, the company mentions completing planned maintenance activities, which is essential for ensuring the reliability and safety of their operations.

Highlights

The company achieved a production milestone of over 22,000 barrels of oil equivalent per day for the first time.

Total oil and condensate sold was lower this quarter due to timing of offtakes, despite increased production.

Sold 0.7 million barrels of oil equivalent of gas, marking a 14.1% increase.

On track to meet the 2024 sales target between 7.5 and 7.8 million barrels oil equivalent.

Revenue generation of $62.76 million, primarily affected by lower oil prices.

Declared a second interim dividend of 2 cents per share for the fiscal year 2024.

Completed a share buyback of 3 million shares, retaining them as treasury shares.

Exploration drilling initiated with four targets; the first two have been completed and data analyzed.

Submitted the concept select report for the Fine Field to the authorities and awaiting feedback.

Successfully acquired five blocks in the Central North Sea during the 33rd UK offshore licensing round.

Drilling for T West is set to commence in mid-2025, with first oil targeted for the end of 2025.

Significant improvement in production for North Saba and Peninsula due to completed maintenance activities and contribution from wells drilled in 2023.

Unit operating costs slightly improved in Nor Saa due to higher production numbers.

Drilling of two infield wells in Kinabalu PSC in 2023 led to a significant increase in net production numbers.

Net average production rate in PM3 CA PSC sustained due to the H4 drilling campaign.

1P reserves and 2P resources numbers updated as of January 1, 2024, with TP reserves at approximately 60 million barrels of oil equivalent.

The company aims to double production by 2026 and is actively looking for acquisition opportunities to achieve this target.

Share buyback activities are ongoing, with a set budget for this financial year, and the company is opportunistic about it.

Exploration activities are expected to continue, with a focus on cost recovery mechanisms and potential farm-ins to high-chance blocks.

The company is focused on health and safety, operational excellence, and maintaining a strong balance sheet while pursuing growth opportunities.

Transcripts

evening everyone and Kai to those

celebrating thank you for joining us for

the hius petroleum quarter 2 Financial

year 2024 analyst and F managers

grouping I'm liy Ling VP of corporate

development and I'm joined by our CFO

yep

c b taker our VP of economics and

business

planning Dr Pascal hos our country HTE

Malaysia and Vietnam Joyce wasu dwan our

head of corporate finance and Andrew

Fernandez from my team our managing

director Dr P Perera will join us

shortly after his board meeting has

ended we are also accompanied by the

team from F PR our recently appointed IR

partner believe you would have received

email invites from them for this

briefing and to those who check in

earlier Andrew and myself are very much

on board for ir and yes I'm grateful to

still have my job this afternoon release

our results and on our website you'll

find our corporate and business update

CBU uh which details out our financial

and operational updates press release

and this briefing slides which can also

be found in this Zoom chat we'll kick

off with the presentation followed by

the FAQ if you have any questions type

them in the chat or raise your hand and

we'll call on you to unmute and ask your

question so I'll pass this over to

Pascal

now all right

thanks evening everybody thank you for

joining us this

late let's

let's dive in straight away so I get the

pleasure of giving you the highlights of

a quite an exciting

quarter uh to start off with just want

to highlight that uh this was the very

first quarter that we've actually

achieved above 22,000 barrels of oil

equivalent per day in terms of

production um the total oil and

condensate sold uh is a bit lower this

quarter compared to the previous quarter

but as uh pretty much just a matter of

timing of the off Tes yeah so we

actually produce more oil than in the

previous quarter

um we also produce more gas yeah so we

sold .7 million barrels of O equivalent

of gas which is 14.1%

increase uh just to highlight that we're

still on track to hit the potential year

2024 sales Target between 7.5 and 7.8

million barrels oil

equivalent okay so in terms of the

financials we generate a revenue of six

27.6 million

ring down over previous quarter which is

primarily driven by lower oil

prices the Ia reached

3253 R also is roughly the same

percentage lower compared to the

previous

quarter uh on the back of these results

we declared a second inter dividends of

2 cent per share for fiscal year

2024 and we've now completed the share

by back of 3 million shares that have

been retained as treasury

shares so in total uh in terms of

dividend we' declared 4 Cent so far and

the target is for full Financial year

2024 to provide at least 75 7.5 Cent per

share

divid terms of projects highlights yeah

this this last quarter we kicked off

exploration drilling yeah uh we're total

we're Drilling

four targets the first two Targets have

been completed and the data has been

analyzed as we speak currently drilling

the third

target um in terms of the UK um the

concept select report for the fine field

has been submitted to the authority the

nsda so we're waiting on feedback on

that

report on top of that uh recently we

participated in the 33rd UK offshore

licensing rounds and we were

successfully five blocks in the Central

North Sea all complimenting um our

existing assets there

already terms of T West the update there

is that drilling is to commence in the

middle of gendar year

2025 with first oil targeted towards the

end of calendar year

2025 okay and with that I hand it over

to uh to defa give you operational

Financial thanks

Pascal um so let's U go through the

operational highlights and operational

metrics for each of the psc's uh before

we hand it over to Cy for the financial

highlights so this slides uh gives you

an operational highlights for all of our

producing assets um so on a on habiscus

for habiscus group as fcal stated uh we

produced 22,000 barrels of oil

equivalent per day that's our net

production of oil condensate in

gas in terms of realized price

uh we our realized oil and condensate

price was $90 per barrel and once we

integrate the gas it's roughly about $70

per

Boe total volumes of oil condensate and

gas which we have sold in this quarter

was 1.8 or 1.9 million barrel of oil

equivalent combined quarter 1 and

quarter 2 for FY 2024 we have sold

roughly about 3.9 million barrel of oil

equivalent and we are we are on track to

deliver close to 7.7 million barrel of

oil equivalent so remaining 3.8 million

barrel of oil equivalent would be sold

in quarter three and quarter four going

for the bottom we are showing the

production and unit operating cost um so

overall the production level in all of

the uh the producing assets have

improved anasua more or less very

similar to what we produced last quarter

but in nor saba and Peninsula

significant Improvement in production on

the back of basically the um the last uh

planned maintenance activity has been

completed and then uh in Peninsula

espically the wells which we drilled in

2023 the contribution from all of the

wells have been realized right so in

notaba we produced

5,133 U barrels per day anasua 2,100

barrels per day barrels of oil

equivalent per day Peninsula is

14,940 barrels of oil equal per day our

unit operating cost uh is slightly

improved in nor SAA because of higher

production numbers so roughly about 30.7

us per barrel um anasua is $

32.97 per Boe and Peninsula is

26.75 US per

Boe okay let's go to the next slide so

this is this this particular slide is uh

for Kinabalu PSC so we are going to

cover Kinabalu pm3 CAA nor saba and

anasua for producing assets so in

Kinabalu

PSC um two significant um with drilling

of two infield Wells completed last year

in

2023 uh we have seen significant

Improvement in net production numbers um

now it's last quarter it was 4 96

barrels per day compared to previous

quarter was 2,700 barrels per

day uh and and as a result of it net

Opex per barrel has reduced uh

significantly okay let's go to the next

slide okay uh pm3 CA

PSC um so the net average production

rate is 10,532 barrels of oil equivalent

per day

which is on the back of the sustained

oil production from the

H4 drilling campaign of the wells which

we drill last year in

2023 the Opex per barrel Opex per barrel

of oil equivalent um is more or Lessing

slightly increased to

27.1 n compared to the previous quarter

um because of some one of uh plan

maintenance activities in uh in spec

specifically related to both fso which

we run so in terms of the life extension

projects um which were

done and also we delivered higher gas

sales in compared to compared to the

last year due to the plan due to the

completion of the pl maintenance

activities let's go to the next slide

then so the North Saba uh we produced

5,13 three barrels per day uh

significant Improvement in production

net production for North Saba uh is is

coming from two key factors one

is we are drilling sf3 so so we are

spending capex on sf3 water FL Phase 2

project so all of these capex has helped

us to increase our entitlement to close

to 36 37% in this particular uh

water

um and of course second is the

completion of the maintenance

program um going back to the exploration

um activities which Pascal was talking

about there are three targets two

Targets have been completed drilling

third target uh and then we will uh with

all of the data being reviewed by our

subsur okay let's go to the next slide

it is UK an

cluster so in anasua we produced

2,118 barrels of oil equival but very

much similar to our last quarter uh we

completed our 15 days uh plan shutdown

activity at anasui

PSO net Opex Barrel you will see slight

increase um increase by about4 to5 per

bu Bas Bas basically related to one of

health and safety related in inspection

activities which we had to do that um

coming to the the forward plans in terms

of our UK development assets to the te

West uh first oil expected in the

quarter 4 calendar year

20125 fine field fine discovered asset

which we acquired from Rapid um so we

have we have submitted our concept

select report to nstda the fine is also

candidates to tie back to

anasua so very similar to what we are

trying to do in Te West te West well

will be would be tie back to anasua Appo

and in next few years we would do the

same for the fine discovered fine that's

that's objective in addition we have

been awarded uh five blocks um in UK

noty all proximity to the mar gold field

just to kind of aggregate all of those

discoveries around marold

period okay let's go to the next slide

so this slide shows uh the reserves and

resources numbers basically 2 p reserves

and two resources for habiscus uh group

all of these numbers are net to habiscus

group so our total uh 2p oil and

condensate reserves as a 1 January

2024 previously we were showing the

reserves and resources numbers as at 1

July 2023 now what we have done is we

have subtracted the actual oil gas and

condensate production from the previous

uh previous reported reserves and this

is the updated numbers so as of 1 July 1

January 2024 our TP

reserves um stands roughly about roughly

about 60 million barrel of oil

equivalent out of its 49.9 is oil and

condensate and 11 million barrel of oil

equivalent is gas resar

on the third column third bar we are

showing this is 2C oil resources which

is 59 uh million barrel of oil 59

million barrel barrel of oil

predominantly coming from 33 million

Barrel biggest contributor is the mar

gold uh followed by followed by our

Australia and then

nor let's go to the next slide so I will

hand it over to Cy thanks DEA uh good

evening everyone

[Music]

um now I think you've heard from uh dear

um and also from Pasa earlier that they

have generated quite favorable

operational performance during the

quarter and heating above 22,000 Boe per

day for the first time in one quarter

but uh that did not really translate

into the sales volume as as you are

aware that our sales volume is uh you

know depends on the timing of the Optics

so um that place fairly big part in the

in the revenue that we have recorded for

the quarter uh you can see that in the

first uh the chart on the left far left

um Revenue went down by

15.9% uh and that's really because uh in

North Saba when you compare against the

last preceding

quarter uh they had um two offs uh

generating close to about 550,000

barrels whereas this time around it was

about 350,000 so that's really again

timing nor sa in a particular Financial

year you would um expect them to

generate about five off takes uh so that

two so one quarter will always have two

and that was the last quarter so hence

you will see this uh particular um I

mean this is the main reason really uh

that we also highlighted that oil prices

that we have realized for all the sales

uh is a little bit was a bit lower

compared to last quarter but but but I

say lower is not like low uh it's not

low really our average oil price for the

quarter was 9021 and that's that's

fairly High actually uh but if you

compare to last quarter uh it was

touching almost 100 and hence that also

if you compare the two quarters then you

get this particular

trending okay and so along with that um

I move to IA the the thing is with I if

you look at the quantum it is lower uh

but if you look at the I margin despite

lower oil prices or uh for oil and gas

prices we have

actually um managed to uh

maintain a margin to be uh to be to to

exceed 50% so 52.6 this time around uh

last time around against 51.8 in the

second quarter so um and the quantum

that have gone down is really because of

the lower Revenue but um the reason why

we could maintain our profit margin uh

importantly is because our operational

results have improved quite

significantly during the second quarter

uh in the first quarter we've conducted

and completed all the U plan maintenance

activities particularly in the Malaysian

PSS uh so that was uh uh conducted prior

to

October uh and I think DEA also alluded

to two Wells from uh two new infu wells

this year this financial year um but the

impact was full fully recorded only in

Q2 because one of them was in August and

one of them came online in October so uh

the full impact of these two infs were

uh were were were recorded in the second

quarter and uh there there are no

maintenance I mean there's nothing um

really one of uh adverse activities uh

from operational

perspective uh from a p perspective

there is a little bit lower uh profit

margin compared to last quarter now

that's despite Marin being quite

consistent that's really because um in

tandem with the higher production levels

particularly in Kinabalu and

pm3 uh the depreciation and mization of

our non-current assets have also

increased so non-cash in nature uh and

hence there is this uh Dro in uh decline

in P margin compared to the beta margin

um on the tax front no surprises uh to

highlight this

quarter okay so the next next page now

this one uh Compares buy asset or buy

cluster of assets the

um selling price um the Opex per barrel

oper Boe net Opex per barrel oper Boe uh

and the uh I margin for each quarter um

from 1 Q fi 20 from the last Financial

year on

uh and what what you can see is this

since we quite the Peninsular group of

assets um our profit margin has always

exceeded 50% that's the margin has

always exceeded 50% um regardless of

where the oil price is and uh we have

always be able to maintain um the

operations to a good extent because of

the scale of that uh uh cluster of

assets they're big enough to actually

sustain all the um any adverse operation

um or or you know uh activities uh North

Saba quite similar uh we have

uh been achieving almost always above

40% uh in the past uh six

quarters and uh in anuria I think as we

all know anria is a bit more what you

call it bit more

um it it it is more fluid so when the

oil prices uh go higher your profit our

profit margin will be also quite uh will

increase more sharply and hence you can

see that our beta margin uh

is can can can go up to 60 to 70% in the

past and this quarter because of some

additional cost in Cur for some HC

health and safety related activities it

was close to

%. so in all very profitable quarter uh

cross all

plus so then that brings us to the

balance sheet High um another so another

good quarter obviously and that brings

our shareholders funds to be about

2.9 Million RM um slightly increased

from the last quarter as well and also

from uh because of the positive

contribution from all of our groups um

using

assets um you will see that there is a

debt I think we've highlighted this

before this is the term loan that we

have undertaken uh but the bance the

balances are reducing and we have making

uh the repayments um have been made as

per schedule and that resulted in a net

cash position to the group of close

close to 500 million as at 30th uh 31st

December

2023

okay so that's a healthy cash position

actually and that allows us

to support our capital expenditure

programs internally and if we find any

um right opportunities then you it also

allows us to um to partake in those

uh okay I think that's the the next

section would be Ken good evening

everyone thank you very much for joining

us sorry I'm a bit late joining this but

you know straight into

the but to present all the good news so

um yeah so I think uh just to kind of

talk a little bit about what we are

expecting to deliver this year I think

generally you would have seen from the

results uh at the moment things going a

little slow we are we are on track to

deliver on our our on our guidance for

production uh we we gave guidance that

we would be somewhere in the range of

7.5 to 7.8 million barrels of oil

equivalent for the year the financial

year uh that is up from 7.1 million

barrels of oil equivalent that we

delivered last year at this point in

time as we see it we hope we will get

somewhere in the range towards the

higher side of that guidance probably

around the 7.7 markets what we're

targeting at this point in time but you

know that all the same an improvement on

on last year uh in terms of kex uh also

um we've got projects in nor Saba

Kinabalu uh we are funded for the capex

the number looks a little bit um a

little bit scary but important to say

that we are funded and all of these

projects hopefully we'll be delivering

some uh increases in production and

we'll see that next year okay so it

looks a large number but the important

thing is we we will not have to do any

kind of equity raise to fund this kex

it's all will be from internal

funds uh dividends we have given

guidance again 7.5 cents per share for

on on on the Consolidated share basis so

um uh you know and uh hopefully that is

going to uh it's a 20% increase from

last year Financial year 2023 so

hopefully U hopefully oil prices stay

stay strong uh this next year we will

look at something a bit even more

aggressive but for now this is the

guidance we're able to

provide um the following slide we're

just giving some gr Gran granularity on

on our production schedule so that you

can work on your models um just kind of

saying exactly where the production is

coming from whether it's oil or gas uh

and uh already we also are are

disclosing here what has actually been

already delivered for January the month

of January that's already been delivered

and you will be able to see how we build

up that number of 7.7 million barrels in

the last in the last column there uh in

yellow uh that 7.7 million barrels how

it's how it's uh being built up over the

next few quarters what we try to do uh

and we're not super successful all the

time on it but we try not to have too

many

uh of takes and this is when we sell the

caros of oil in the same week in the

same month because then sometimes as the

oil price moves we might expose

ourselves to a little bit more

volatility so what we try to do is we

are trying to um smooth it out over the

years so that's the kind of agenda that

we have what we've also done on this

chart I'm not going into every sell

every number in every sell but the

important thing is uh the team has given

a breakdown of you know what what are

oil deliveries and what are gas

deliveries and the 7.7 million barrels

how much of it is oil so you can then

Park uh you can you can then compute an

oil revenue from that and you can also

compute the gas Revenue you can you have

the breakdowns so hopefully you find

that helpful and you'll find this chart

useful I

think in terms of growth um you know we

we are we are always in we're always

prospecting the market looking to U help

us achieve our 2026 Target of 35 to

50,000 barrels of oil equivalent per day

that's going to be more than double

where we are today so to get to

somewhere in the the midpoint range

we'll have to double up production so so

we are always looking for an acquisition

production will uh organic growth

production will only take us a certain

amount of the way so um we are going to

um also be all the time looking for for

um uh some kind of attractive asset to

buy uh and and there are some there are

some processes ongoing around the region

and all of them are of interest to us so

we we keep we keep looking but it's it's

not about getting asset it's about

getting the right asset at the right

price for us it's got to be in the right

in the right uh phase of its own life

cycle for for us to be able to add value

and make an impact so it's important for

us uh important projects for next year

will be teal West to deliver some some

production and also the sf30 water flood

you know a lot of kexs is being

committed to these projects so they will

have to deliver the numbers in terms of

production but will not get us to our

Target so somewhere along the line over

the next between now and 2026 we will

have to try to close uh and it's not

going to be one deal that brings the

Silver Bullet it may have to be a couple

of deals that take us there okay so uh

the team is working hard scanning

scanning the various opportunities to to

see whether uh they would work for us

and and it's also nice that we have some

unused uh facilities in terms of funding

so when we go to buy assets uh we are

not telling the vendor it's subject to

some funding process we are able to to

make some pretty uh you know bold

statements about doing being funded to

do something so that's that's also

pretty good

thing I think then on the last last um

last slide I think I think it's the last

slide so um how come I got the most

number SL me and Deepa getting the most

number slides yeah so anyways um yeah so

we are we're trying to um you know we're

working on all fronts um the the growth

strategy very very important very very

clear across the company everybody's

aligned towards this uh singular mission

to double production by 2026 we are

backed by a lot of development

opportunities within the company but at

the same time because um there are there

are acquisition opportunities we are

also looking looking at those uh we've

been doing some nice work on the

operations so

ERS are you can see the production is

increasing uh we have also caught up a

lot of the the maintenance you can see

some of the unit production costs have

increased we've had to catch up on a lot

of Maintenance that was deferred from

the covid period I think we just about

got now so I think uh hopefully we'll be

able to keep our our unit production

cost at at these type of levels uh and

keep the Integrity of the assets High

and the and the up times high as well in

terms of U Capital uh the cash flow

statement the balance sheet are are are

telling a reasonably good story uh cash

balance is is reasonably strong the cash

flow quite strong and and we've got some

unutilized fac facilities and and and

the facilities that we have utilized as

well not not a huge gearing ratio at

this point in time so we're quite

comfortable with that uh we are working

we are we've kept a continuous flow of

dividends since we started paying

dividends so we will try to keep that

going for

2024 we like I said we' have provided

some guidance on where we will be for

financial year

2024 and uh yeah the valuation is the

only thing disappointing we feel it

needs to we need to work hard you know

trying to improve it against our peers

uh there seems to be a lot of and compar

against UPS lot of opportunity for

upside so you know that's for you to do

your

work we can only do our work and and we

hope that there will be some uh some

interest in the market you

know

on you know there's also one more thing

that seems to be happening in the market

right now and that is uh

I think there is irrespective of all the

the ESG and climate change activism and

all of that people are now beginning to

understand that oil and gas is an

important part of the energy mix it's

becoming and and more and more um

prominent people are are saying making

more and more bold statements about this

so I think that's very important so

hopefully very and you can see I mean

Warren Buffett keeps increasing his

stake in the oil companies yeah yeah he

he keeps doing it the big mergers that

you see in the US I mean why why are

these big mergers happening because they

want to have the scale to be able to be

extremely competitive in this market and

and and and do things in a Consolidated

way have Consolidated strategies and

another reason why it's happening is

because of the security risk in the

Middle East I think uh I think uh you

know the the Western World wants to have

a a secure source of energy and they

want to know where where it's it's going

to come from so I think that's also

important interesting to see that in the

last two weeks Germany committed to a

huge uh 10 gaws of power electricity

Supply coming from combined gas turbines

gas generation and and they 10 gaws okay

so this is a country that was committed

to Renewables uh completely uh

decommissioned its nuclear facilities

and now going back to gas turbines and

you must ask yourself 10 gaw of

electricity from gas turbines where is

the gas coming from and and uh they

building now even the the LG import

terminals to accept to receive that gas

so so they need reception centers for

the gas so it's going to come from

somewhere be imported so uh and and

there's going to be demand so I think uh

surely surely over the next uh I would

say 10 years our industry We Believe

will still be strong so I think I think

with that I I include conations and

hopefully all the others are ready to

take your

questions

yeah going to the Q&A so I think there's

a there are three questions from John Po

from insights the first one is over the

medium term it seems that the growth

will come from many infield and some new

blocks are there

Brown fields that deem attractive on the

radar for the team what will be the size

of recation that's comfortable for hus

without an equity raise

or um okay so I think I'll do this

together with Pascal and deart probably

and and please chime in okay but I

think long and short is as I said we are

the the target has been set for us

35,000 to 50,000 equivalent a day by

2026 uh within our own P folio we will

probably get to somewhere in the range

of what 28 30,000 barrels of oil

equivalent a day if we do all our

development activities by that time so

there's going to be a gap to close uh we

are determined to close that Gap and

meet our objectives therefore at some

point we will make some

Acquisitions uh the process we are

looking all the time and there are

processes ongoing in different parts of

the region right now but not to say

we're in it or whatever but we we are

definitely interested to to

participate and what has always been

important for us is to get the right

asset at the right price and at the

right time because right right price and

right time come together okay uh Right

Price Right Time important okay because

um you you can't pay at the peak of the

oil prices and all of that kind of stuff

so it's got to be a reasonable

transaction uh I I so I guess the answer

is yes we looking at Acquisitions all

the time okay yeah is there a size of

acquisition that's comfortable for H

visus without an equity

rise there is s well I mean

uh think we know what we are trying to

achieve in terms of a Target we're

trying to close a gap of about 10,000

bar of oil equivalent a day actually

that's what we're trying to do so I

think let's start with what is the

objective and if it's a good transaction

it should be reasonably uh debt fund I

think we can still find money in from

the market for debt so it's got to be

reasonably debt fundable and and I think

it's in everybody's interest including

some of the management here not to not

to have too much of

dilution and the second question is is

the management satisfied with the

reserve replenishment activities that

planned over the next three to five

years I mean for the first time a long

time we're actually drilling

exporation we're actively seeking for

new resources to add to our

portfolio and if you remember that's how

we started as a company it's essentially

exploration now added it back to our to

our work program um besides that of

course the development activities we're

actively developing the sf30 water FL

which been add significant number of

barrels and we have additional

developments in the pm3 area as well so

yeah in terms of activities it's it's

actually quite a high level compared to

where we were before so the in terms of

resources I think we have plenty the bag

to to develop over the next five to

seven years okay and the third question

is will share buy back continue

throughout fy2 24 and fy2 at this

prices we have a certain trold that we

thinking about and we are opportunistic

about it um and we have set aside budget

to undertake share BuyBacks for this

financial year we um and we will

continue to monitor our share price

and John I hope that answered your

question raise his hand Dr you want to

unmute yourself and say your

question hey um hi hi everyone um just a

quick follow up on the exploration

talk uh so going forward should we

expect more exploration and would it

only be done under the um the cost kind

of sharing mechanism or would we also be

open to um taking out all of you know I

guess underwriting the the expenses

ourselves yeah so um I think um that

that's a good observation because um the

exploration work we are doing now uh we

drill the B latara well last

year under hibiscus Malaysia and it came

in above expectations and it was

immediately put into production it was

it was planned in such a way that it

immediately was was tied into the

production Network and started producing

right away so that was very successful

well it's it's been the subject even of

a case study for for Petronas they they

bring it up a few times now and uh now

we we are working on on the uh the not

the nor Saba nearfield exploration

opportunities this one will not be TI if

if it's successful and the results are

good then we will we will not be able to

tie these in right away they will need

further work uh and and that that those

studies and all these things are you

know we we will have to do them in due

force and make the announcements but

next year there is the bua ASA well uh

in Peninsula Malaysia sorry this year

I'm I'm still thinking 2023 next month

we're going to be drilling Bas so that's

another exploration opportunity all of

these Wells that we have drilled from

last year to this year are all cost

recoverable so we we've kind of worked

very hard to get them all all in the

cost recovery bucket so so uh our our

exposure is limited okay now uh

regarding uh real kind of rank

exploration opportunities where we take

up new blocks and and and do some

exploration uh that will

only only happen if we Farm into blocks

where we feel that the that there's

going to be really a high chance of

success or at all there are going to be

tieback opportunities to infrastructure

which is already nearby and and which

maybe we are operating I think that

could potentially be a a scenario we we

have to think about that

uh maybe in the in the midterm I

wouldn't say it's something we're going

to do tomorrow but we will think about

that in the midterm has our financial

Foundation gets stronger we will be able

to do that but uh it is it is clear that

you

know it it's not at these oil prices

you're not going to be able to get easy

opportunities you're going to have to

step out a little bit of your comfort

zone of our comfort zone and take a

little bit of near field exploration

some like what we're doing in not Saba

it's clear because oil prices are $75

$80 everybody is thinking let's hold on

to them and and and generate some cash

so uh unless you're willing to to step

out a little bit and and do a little bit

of exploration to really enhance value

it is difficult can imagine to buy an

asset and to recover enough money uh to

make that that acquisition uh you know V

viable and and and become a good appli

so okay um no thanks thanks uh and

regarding the UK um what I think there

was five uh what is it called there was

five blocks right would any of them add

to your reserves or uh

resources yeah so the the blocks that we

have the crown the crown license adds to

our add to our contingent resources

Kil Ramy uh block will add to our

resources so yes uh they are adding to

our resources okay but it's not there

yet right in the we we have not put the

numbers yet because we need to do some

technical work but there are wells been

drilled and discoveries made and our our

gut feeli is that they will they will

add to the Consol Consolidated volumes

of the marold area to make it a more

exciting uh uh area to kind of invest in

okay great and last question for me is

regarding this exploration um Wells so

I'm just going to be a bit cheeky here

but you've drill two already or I guess

almost three wouldn't you have already

some sort of data on like the flow rate

like would you already know if it's uh

you know if it's interesting or not at

this

point

um yes and no we I

mean you you have to do the technical

work the partners have to agree and and

then when you come out uh you know it's

not us it's it's ourselves the partner

and and also the the regulator all have

to agree that there that those technical

work is sound and and this is the answer

uh we are not quite there yet let's just

say that for now okay great thank you

har from menu live you have a question

okay um Can management talk about the

progress of extension of pm3 CAA is

there some kpi in order to get the

extension yes um so this is actually

actively ongoing at the moment um we

recently in January we had a um

essentially regulatory meeting with both

p and

all parties agre that the aim is to

cap actually key principal agreement in

place by this

year we set an internal Target to try

and achieve this faster than the end of

the year but B out of our hands you know

exactly where we want to be but uh We've

also kind of set the bar uh to the point

where everybody understands that longer

it takes to get the U the principal

agreement in

place uh

the longer uh ESS developments will be

deferred which will cause a drop of

production eventually so no nobody's

interest I think all parties are now

working quite diligently to trying to

reach a point where we can

sign I hope that answers your question

T from Trident analytics um there's a

question what is the one thing that can

keep the management awake at

night those

who

well firstly are we

[Laughter]

sleeping yeah say what keeps you

away you got to make sure that

everybody's always focusing every day

health and

safety John hi John you want to unmute

yourself hi good

evening perhaps this is a question

directed to Dr Ken and Dr SC um I I like

the observation that uh Dr Ken mentioned

about going beyond what is a comfortable

risk um I just like to get your thoughts

on perhaps geopolitical risk around the

region in terms of you know um if there

were blocks available let's say in

Vietnam or

whatsoever in terms of your risk

assessment to take on those blocks um

how does geopolitical risk actually take

you account Vietnam is just an example

but when you guys look at blocks that

are you know existing Brownfield maybe

not so prolific uh World geopolitical

tensions actually play a vital role in

deciding and determining whether there's

a good price

not um yeah it always does uh two things

actually one geopol geopolitical risk

and the other is uh legal regulatory

risk you know how stable is the legal

the legal framework in the country in

case something goes wrong uh is there a

decent court system in the country first

at at that level we look at it and then

obviously on a regional level we do look

at you know a few things we look at uh

we look

at I would say apart from the regulatory

list we're looking at Regional

geopolitical race like all the stuff

that you talk about we don't want to

ever get into position where we have to

call Force measure on something we don't

want we want to try and avoid that so

all of that we we also look at you know

long-term U I would say decommissioning

uh rules because if we go in for

something that is going to be 10 years

down the road we got to clean it up we

got to also look at you know what are

the risks associated with that what are

the what are the expectations of the

government when you come to clean up and

all of it uh what levels of of De

commissioning do they want so we we look

there are several factors that kind of

govern you know our decision to invest

in a particular area uh and and the

final one I would say is this which is a

consideration what happens if it all

goes wrong so we we we look at it and

say what happens it all goes wrong and

you have to write it off would the

company be able to still survive on the

the other assets from you know the other

assets that we have so we we look at it

from that perspective okay so I I would

say there there are several several

layers that we look at it but you know

if if we had to write off an asset

because of of some geopolitical thing

that comes up there or whatever would

the company be able to to to kind of

still stand on its feet so these are the

the these are how these are the some of

the factors that kind of you know we

think about when we are going into a a

particular asset so sometimes you have

very attractive opportunities but

yeah they just don't fit you know into

those into that framework us for one

reason or the other just in our

commitment with transparency going

forward we'll be releasing the F webcast

I the recording of This briefing on our

website the day after the briefing so

for this quarter that will be tomorrow I

decided to keep this under wraps until

after the briefing just in case some of

you are tempted to sleep away early for

Chinese year dinner and catch up on the

recording later but thank you once again

for being here if you have any questions

feel free to reach out to us of PR and

take care and stay safe bye-bye