Tuesday 25 August 2020

Hibiscus Petroleum Berhad (HIBI: MK) (“Hibiscus Petroleum”, the “Company” or the “Group”) released a Corporate and Business Update (the “Update”) outlining the Group’s targets and initiatives as well as operational updates in conjunction with the release of its quarterly financial results for the quarter ended 30 June 2020 (“4Q FY2020”).

In the Update, the Group stated that its asset acquisition plans have been accelerated as the outlook for the oil and gas market improves. As established exploration and production players, especially those in Europe, assess their portfolios in light of an increasing focus on the renewable energy space, Hibiscus Petroleum sees acquisition opportunities for goodvalue and high-quality producing assets.

The Group will prioritise assets with strong production potential coupled with cost optimisation opportunities and remains committed to growing its business in its areas of geographic focus, particularly South East Asia.

In FY2020, the Group met its full year production target of 3.2 million barrels (“MMbbls”) of crude oil, while it sold 2.6 MMbbls across the North Sabah and Anasuria assets. The Group deferred two crude oil offtakes initially planned for 4Q FY2020 (“offtakes deferral”) to the quarter ending 30 September 2020 in an attempt to realise higher crude oil prices.

For its FY2020 results, the Group announced Revenue of RM646.5 million and a Loss After Taxation of RM49.3 million. EBITDA for the year was RM213.3 million. These results were affected by the provisions for impairment of non-producing oil and gas assets amounting to RM196.3 million and impact of the offtakes deferral.

The Group also reported an unrestricted cash balance of RM77.3 million.

Commenting on the outlook for the Group, Managing Director, Dr Kenneth Pereira, said, “The Group has previously reiterated that it is positioning itself to acquire good-value, high-quality producing assets in our areas of geographic focus. With asset values dampened due to the current oil market, we see this period as an opportunity to add to our portfolio of producing assets. For our North Sabah and Anasuria assets, we are working towards optimising our unit production costs to maintain a greater headroom between our cost base and crude oil prices.”