Hibiscus Petroleum Bhd. · MYX:HIBISCS
Hibiscus Petroleum Bhd — Investor Day (September 2024)
48 slides from Hibiscus Petroleum Bhd's investor day presentation, September 2024
Slide 1: Investor Day 2024: Delivering Volumes, Enhancing Value
Investor Day 2024 DELIVERING VOLUMES, ENHANCING VALUE
Slide 2: Disclaimer
DISCLAIMER The purpose of this presentation is to provide general information about Hibiscus Petroleum Berhad (the “Company”) to assist potential investors in making their own evaluation of the Company and does not purport to be all-inclusive or to contain all of the information that a prospective i
Slide 3: Agenda
AGENDA 02 Tactical Playbook Delivering Volumes Enhancing Value Business Strategy ▪ 2024-2025 Near-term Value Triggers 01 ▪ Sustain Long-term Growth 2026 03 Proven And Beyond Why Invest in Hibiscus? Performance ▪ Actionable Energy Transition Plans Financial Strategy ▪ Maintain Financial Resilience In
Slide 4: Proven Performance
PROVEN PERFORMANCE
Slide 5: Emerging as a prominent player in Southeast Asia
Emerging as a prominent player in Southeast Asia Enhanced returns through value-accretive acquisitions 2016 95% operated production 2018 NORTH SEA, U.K. 2022 IRR* 689% IRR* 298% (vs. 36% at SPA)1 (vs. 15% at SPA)2 2024 VIETNAM 2022 Anasuria Cluster MALAYSIA- MALAYSIA VIETNAM CAA North Sabah Peninsul
Slide 6: Delivered volume growth
Delivered volume growth More than doubled our net daily production and increased 2P Reserves by 25% since FY2020 Net Daily Production (boe/d) 2P Reserves (MMboe) Reserves Replacement (MMboe) 57.4 Replacement Ratio 210% 20,833 25% Gas 46.1 29 > 2x 61 Produced 9,120 Oil Oil Added FY2020 FY2024 1/7/202
Slide 7: Improved financial earnings
Improved financial earnings Earnings have grown in tandem with larger volumes, higher oil prices, managing costs Revenue (RM’m) EBITDA (RM’m) PAT (RM’m) 2,716 1,321 467 > 4x > 6x >9x 647 213 -49 FY2020 FY2024 FY2020 FY2024 FY2020 FY2024
Slide 8: Built financial strength
Built financial strength • Cash flows & Balance Sheet growth, supported by prudent capital allocation • Prudent debt maintenance with low gross gearing of 0.12 @ FY2024 Operating Cash Flow (RM’m) Net Assets (RM’m) 979 3,100 > 2x > 8x 1,221 122 FY2020 FY2024 FY2020 FY2024 CAPEX in FY2021 to FY2024 (R
Slide 9: Maintained robust and consistent EBITDA margins
Maintained robust and consistent EBITDA margins Proven track record in navigating oil price fluctuations Flexibility in phasing expenditures from operational control Volumes increase from acquisition of Repsol assets 1,400 in Malaysia and Vietnam 100 1,270 1321 90 90 1,200 87 84 80 1083 1,000 70 64%
Slide 10: Received Awards and Recognitions in FY2024
Received 20 Awards and Recognitions in FY2024 For safety, project delivery and excellence Focused Recognition from PETRONAS Malaysia Upstream Awards 2024 ✓ GOLD Award for Project Delivery ✓ High commitment excellent Production towards Enhancement and Idle Well Reactivation activities ✓ GOLD Award fo
Slide 11: Tactical Playbook
BUSINESS TACTICAL PLAYBOOK FINANCIAL INVESTOR
Slide 12: Business Strategy: Tactical playbook
Tactical playbook Towards achievement of 2026 Corporate Mission and beyond Twin-focus of Enhancing Execute to Monetise 2024/2025 Shareholder Returns and egy Value Triggers rat Development of a Sustainable St Business r MONETISE NEAR- sto TERM VALUE ENHANCE Inve TRIGGERS SHAREHOLDERS Business Strateg
Slide 13: Business Strategy: Tactical playbook
Tactical playbook Towards achievement of 2026 Corporate Mission and beyond Twin-focus of Enhancing Execute to Monetise 2024/2025 Shareholder Returns and egy Value Triggers rat Development of a Sustainable St Business r MONETISE NEAR- sto TERM VALUE ENHANCE Inve TRIGGERS SHAREHOLDERS Business Strateg
Slide 14: Organic Value Drivers
Organic Value Drivers Ongoing projects / opportunities for monetisation - 2024 onwards BRUNEI NORTH SABAH ANASURIA PENINSULA Acquisition of South Furious 30 Water Near-term Potential extension of Block B MLJ gas Flood Phase 2 Project development of PM3 CAA PSC beyond producing field production enhan
Slide 15: Acquisition of TotalEnergies' Brunei Assets
Acquisition of Total Energies’ Brunei Assets Proposed Brunei Acquisition is expected to be completed by 4Q CY2024, boosting production and reserves significantly 1 About RPS Energy Limited Independent Valuation Consideration of USD259.4m is competitively priced Gas processing facility as an RPS Ener
Slide 16: Brunei: Comparison with precedent transactions
Brunei: Comparison with precedent transactions USD/2P Reserves is priced at the lower end 2P 2P Price Avg Brent SPA Date Asset Buyer Seller Reserves (USD/boe) (USD) (MMboe) Acquisition of Repsol Assets Peninsula Hibiscus Jun 2021 Repsol Malaysia 34.5 6.2 71 in Malaysia & Block 46, Vietnam Sdn
Slide 17: Acquisition of TotalEnergies' Brunei Assets
Acquisition of Total Energies’ Brunei Assets Proposed Brunei Acquisition is expected to be completed by 4Q CY2024, boosting production and reserves significantly 1 2 3 4 Independent Valuation Volume & Gas Earnings Upsides Consideration of USD259.4m ↑ 2P reserves & production ↑ earnings per share by
Slide 18: Brunei: Partnership with our third National Oil Company
Brunei: Partnership with our third National Oil Company Opening doors for future opportunities in Southeast Asia Malaysia Vietnam Brunei
Slide 19: Organic Value Drivers
Organic Value Drivers Ongoing projects / opportunities for monetisation - 2024 onwards BRUNEI NORTH SABAH Acquisition of South Furious 30 Water Block B MLJ gas Flood Phase 2 Project producing field production enhancement
Slide 20: SF30 Water Flood Phase 2 production enhancement
SF30 Water Flood Phase 2 production enhancement Improving production and reserves recovery via pressure support from water injection North Sabah Net Production Rate (boe/d) 6,007 5,791 4,810 CY2024 CY2025 CY2026 Ongoing Projects 6 water injectors and 5 oil infill wells in Additional Vol. (MMbbl) Exp
Slide 21: Organic Value Drivers
Organic Value Drivers Ongoing projects / opportunities for monetisation - 2024 onwards BRUNEI NORTH SABAH ANASURIA Acquisition of South Furious 30 Water Near-term Block B MLJ gas Flood Phase 2 Project development of producing field production enhancement Teal West field
Slide 22: Bringing Teal West to the fold in CY2025
Bringing Teal West to the fold in CY2025 Reduces Anasuria’s unit production cost; further upside opportunities in the UK given C Resources Anasuria Cluster Net Production Rate (boe/d) 7,793 3,835 2,086 CY2024 CY2025 CY2026 Indicative Timeline Additional FDP FID** First Oil Teal West: Subsea tie-back
Slide 23: Organic Value Drivers
Organic Value Drivers Ongoing projects / opportunities for monetisation - 2024 onwards BRUNEI NORTH SABAH ANASURIA PENINSULA Acquisition of South Furious 30 Water Near-term Potential extension of Block B MLJ gas Flood Phase 2 Project development of PM3 CAA beyond 2027 ; producing field production en
Slide 24: PM3 CAA extension: Potential upside
PM3 CAA extension : Potential upside Boosting production and reserves through strategic asset renewal Key Update Negotiations underway for extension beyond 2027 to further develop discovered resources Increase in 2P Reserves and 2C Resources
Slide 25: PKNB Cluster: PSC for discovered fields
PKNB Cluster: PSC for 4 discovered fields Fields contain substantial gas resources that can be tied back to existing infrastructure 65% 47.0 Operated Net 2C Resources Partner Interest (MMboe) 2048 PSC Expiry Year Indicative Timeline Expected First PSC Agreement FID Gas 1 July 2024 2026 2028
Slide 26: PM327 Exploration Block
PM327 Exploration Block One of the largest exploration blocks offshore Peninsular Malaysia Operator 30% 2051 Participating PSC Expiry Interest Year Indicative Timeline Exploration Development Production Feb 2023 - 2027 2027-2031 2031-2051 Leveraging on Hibiscus’ familiarity with geology in Participa
Slide 27: PM3 strategic hub for Malaysian and Vietnamese gas supply
PM3 strategic hub for Malaysian and Vietnamese gas supply Develop new fields within tie-back distance to optimise cost, prolonging economic life of PM3 area PM3-CAA INFRASTRUCTURE-LED MASTER PLAN PRODUCTION VOLUMES IMPACT PM3 CAA Potential PSC extension beyond 2027 EFFICIENCY IMPACT Tie-Back Opportu
Slide 28: Greater Marigold Area Development (GMAD)
Greater Marigold Area Development (GMAD) Optimised approach for an investable development of UK Quad 15 Area – GMAD is a second production hub GMAD, Quad 15 Quad 15 Marigold 61.25% Operated Interest North Sea United Kingdom Sunflower 87.5% 46.4 Operated Interest Net 2C Resources (MMboe) Kildrummy 10
Slide 29: Close to achieving our 2026 net production target
Close to achieving our 2026 net production target On track to meet mid-term production targets through current projects, acquisitions, development and PSC renewals Estimated Net Production (boe/d) 2P Reserves Trajectory (MMboe) Peninsula North Sabah Anasuria Cluster Brunei Gas 50k Oil and Condensate
Slide 30: Business Strategy: Tactical playbook
Tactical playbook Towards achievement of 2026 Corporate Mission and beyond Twin-focus of Enhancing Execute to Monetise 2024/2025 Shareholder Returns and egy Value Triggers rat Development of a Sustainable St Business r MONETISE NEAR- sto TERM VALUE ENHANCE Inve TRIGGERS SHAREHOLDERS Business Strateg
Slide 31: Energy transition objectives
Energy transition objectives To halve our GHG Scope 1 and 2 emissions by 2030 TWO ENERGY TRANSITION PILLARS Decarbonisation Enhance gas portfolio To DECARBONISE our own assets with To INCREASE NATURAL GAS reserves in primary focus on Peninsula Hibiscus our portfolio of hydrocarbon assets assets as t
Slide 32: Towards Net Zero 2050
Towards Net Zero 2050 Investments are being directed towards the Climate Change agenda – targets are challenging ❑ In Malaysia, emissions reduction being addressed both in PM3 - CAA area and in North Sabah Membrane Membrane Phase 1 Flare tip Phase 2 replacement and - 20% other Initiatives Membrane F
Slide 33: Solar project in Brunei
Solar project in Brunei 13MW solar project will further reduce CO2 emissions for our low-carbon emitting Brunei Asset Pending further evaluation Lumut, 22.41 Brunei acres 2025-2027 Location Land Size Indicative Start ~13 MW ~18,000 MWh Utility Solar Project of power generation annually ~11,500 tonne
Slide 34: Gas portfolio is materially enhanced
Gas portfolio is materially enhanced Reaching gas production portfolio of ~50% Gas is a lower emission, transition fuel, which is playing an increasingly major role in the ongoing energy transition Daily Production Rate (% of boe) Before Repsol Acquisition CY2021 CY2023 After Brunei Acquisition 3% 3
Slide 35: Business Strategy: Tactical playbook
Tactical playbook Towards achievement of 2026 Corporate Mission and beyond Twin-focus of Enhancing Execute to Monetise 2024/2025 Shareholder Returns and egy Value Triggers rat Development of a Sustainable St Business r MONETISE NEAR- sto TERM VALUE ENHANCE Inve TRIGGERS SHAREHOLDERS Business Strateg
Slide 36: Capital allocation framework
Capital allocation framework Guiding principles assuming USD70 bbl Brent, selective and disciplined deployment CASHFLOW WATERFALL KEY PRINCIPLES CONTROL LEVERS Priority Spend Investment Criteria 1 Debt Servicing Target Criteria Funding Work program & 2 Minimum Annual Dividend IRR ≥ 15% Internal cash
Slide 37: Estimated Midterm CAPEX
Estimated Midterm CAPEX Funded by operating cash flow, cash balance, and existing debt facilities CAPEX (USD m) Asset Key Highlights FY2025 FY2026 UK: Teal West Teal West Development 88 29 Malaysia-Vietnam: PM3 CAA Bunga Aster Appraisal Well + Exploration Wells 47 40 Malaysia: North Sabah SF30 Water
Slide 38: Funding of CAPEX
Funding of CAPEX OPERATING CAPEX CASH FLOWS DIVIDEND/SHARE CASH BALANCE BUY BACK DRAWDOWN FROM DEBT REPAYMENT EXISTING FACILITIES Sources of Funds Uses of Funds CAPEX will be fully funded by cash flows from operations, cash balance and unutilised debt facilities Gearing ratio for Hibiscus is not exp
Slide 39: Business Strategy: Tactical playbook
Tactical playbook Towards achievement of 2026 Corporate Mission and beyond Twin-focus of Enhancing Execute to Monetise 2024/2025 Shareholder Returns and egy Value Triggers rat Development of a Sustainable St Business r MONETISE NEAR- sto TERM VALUE ENHANCE Inve TRIGGERS SHAREHOLDERS Business Strateg
Slide 40: Returning free cashflows to shareholders
Returning free cashflows to shareholders Increasing returns via dividends and share buybacks Share Buybacks Total Payout (since Dec 2023 to- (Dividends + Share Buybacks as a % of Net Profit) date) 18% 13% 19.1m Shares 6% RM43m in Cost FY2022 FY2023 FY2024 RM2.27 Avg. Share Price Returns 7.3% 16.1% (
Slide 41: Dividends – past and future
Dividends – past and future Increasing dividends in tandem with growth Actual Dividend Track Record Dividend Guidance 5.1 4.3 4.1 Div. 2.9 2.2 2.0 Yield Minimum target for FY2025 (%) >13% OR DPS (sen) Maiden Dividend Brent ≥ USD70 Brent ≥ USD80 *FY2021A to FY2023A dividend yield is based on the shar
Slide 42: Why Invest in Hibiscus?
WHY INVEST IN HIBISCUS ?
Slide 43: We have delivered to you…
We have delivered to you… BUSINESS GROWTH (PAST 5 YEARS) RESPONSIBLE PROGRESS +25% > 2x 20% c.50% > 210% reduction in GHG gas production portfolio 2P reserves RRR Daily production emissions FY2020-FY2024 post-Brunei > 4x > 6x > 9x Revenue EBITDA PAT MORE THAN PROMISED > 8x > 2x > 8x 7.85 MMboe 8.50
Slide 44: We have outperformed our peers…
We have outperformed our peers…. Outperformed industry peer average over the past 5 years Blue Peer Average Red Hibiscus EBITDA Margin 5-Year Revenue CAGR 64% 54% 49% 47% 22% 33% 51% 47% 42% 34% 27% Net Profit Margin 38% 13% 17% 17% 13% -8% 1% 4% -5% 1% -56% Return on Equity 36% 8% 16% 16% -4% 4% 10
Slide 45: But we lag behind in valuations …
But we lag behind in valuations … EV/EBITDA Multiple P/E Multiple 1.8 7.7 1.0 3.4 Hibiscus Peer Average Hibiscus Peer Average Source: Bloomberg as at 11 Sept 2024 | Trailing 12-month basis | Hibiscus figures were computed using actual results
Slide 46: Nonetheless, we target to continue to deliver to you…
Nonetheless, we target to continue to deliver to you… ONE YEAR 35k – 50k boe/d 100 MMboe Ahead of target Net Daily Production 2026 GOALS 2P Net Reserves Brunei Gas Producing Asset 14 SF30 Water Flood Phase 2 Production Enhancement 31 kboe/d Teal West Development MMboe Potential PM3 CAA Extension Sus
Slide 47: We Are Hibiscus
WE ARE HIBISCUS Delivering Volumes, Enhancing Value
Slide 48: Understatement of Target Share Price – Maybank Report
Understatement of Target Share Price – Maybank Report 1 Overstated Debt due to recognition of Lease Liabilities as Debt Understated target share price by RM0.47/share RM377.5mil divided by total issued ordinary shares of 804,967,428 RM mil Maybank Report Hibiscus Variance Short-term interest- 214.1
Hibiscus Petroleum Berhad — Investor Day (September 2024) on 6ix