Hibiscus Petroleum Bhd.MYX: HIBISCS

FY2024 Revenue Hits a Record RM2.7 Billion; FY2024 EBITDA Exceeds RM1 Billion Mark for Third Consecutive Year

Aug 27, 2024 at 6:51 AM UTC · Issued by Hibiscus Petroleum Bhd.

Corporate and Business Update

(Issued by Hibiscus Petroleum Berhad ("Hibiscus Petroleum" or the "Group") in conjunction with the

Quarterly Report for the Financial Quarter Ended 30 June 2024)

Kuala Lumpur, 27 August 2024 - 12.30pm

Headlines

FY2024 Revenue Hits a Record RM2.7 Billion
FY2024 EBITDA Exceeds RM1 Billion Mark for Third Consecutive Year
FY2024 PAT of RM467.1 Million, Q4 PAT of RM108.7 Million
FY2024 Oil & Gas Sales Exceeds Guidance of 7.5 - 7.8 MMboe
New Malaysia Assets: PKNB Cluster PSC Award and PM327 PSC Farm-In
Fourth Interim Single-Tier Dividend for FY2024 of 1.5 Sen Per Share; Delivers on Guidance for FY2024 of 7.5 Sen Per Share
Share Buy-Back: Total of 10.3 Million Shares Purchased for Circa RM25.3 Million
Gearing Ratio of 0.12x as at 30 June 2024

Highlights

Produced an average 20,144 boe/day of oil, condensate and gas net to the Group for the financial quarter ended 30 June 2024 ("Current Quarter").
Achieved earnings before interest, taxes, depreciation and amortisation ("EBITDA") of RM302.6 million and a profit after taxation ("PAT") of RM108.7 million for the Current Quarter, on the back of RM738.0 million revenue and an average realised oil and condensate price of USD89.58 per barrel ("bbl").
Sold 2.1 million bbls of oil equivalent ("MMboe") in the Current Quarter comprising 1.5 million bbls ("MMbbl") of oil and condensate and 0.6 MMboe of gas.
Declared a fourth interim single-tier dividend of 1.5 sen per ordinary share for the financial year ending 30 June 2024 ("FY2024") on 27 August 2024, with a total of 7.5 sen having been declared to date, meeting the guidance of a minimum total dividend per share of 7.5 sen in FY2024.
Proposed Acquisition in Brunei Darussalam: Conditional SPA signed to acquire TotalEnergies Brunei, which has 37.5% interest in the MLJ Field.
PKNB Cluster Production Sharing Contract ("PSC") Award by PETRONAS: 65% interest and tenure of 24 years, with first oil expected in CY2028.
PM327 PSC: Farm-in agreement with PETRONAS Carigali Sdn Bhd ("PETRONAS Carigali") for 30% interest in one of the largest exploration blocks offshore Peninsular Malaysia.
Share Buy-back: Purchased a total of 10.3 million shares at an average price of RM2.45 per share as of 26 August 2024. These shares, representing 1.3% of total issued shares, are currently being retained as treasury shares.

This Corporate and Business Update ("Update") covers business activities over the Current Quarter, key developments as of the release of this Update and provides commentary on the operational and financial performance of the Group.

Operational Updates

Awards

We are pleased to highlight the following recognitions and achievements for safety and production operations in Malaysia and the UK:

Hibiscus Malaysia

In March 2024, we received two Focused Recognitions from PETRONAS for:
- Successfully delivering the 2023 PM3 projects within budget, on schedule, and meeting target volumes
- Excellent performance and successful project on Kinabalu Redevelopment Phase 3, including the first application of Autonomous Inflow Control Valves (AICV) in Malaysia
In May 2024, we receive two awards at the Malaysia Upstream Awards 2024:
- Project Delivery Excellence - Gold Award
- Wells Excellence - Gold Award
In May 2024, we received two Focused Recognitions from PETRONAS for:
- Successful completion of Logistics Sharing Agreement between PETRONAS Carigali and Hibiscus Malaysia
- Steering the implementation of 2021 Tier 2 audit gap closure resulting in continual improvement of Asset Integrity and Reliability for North Sabah facilities

Anasuria Operations

In May 2024, we received two awards from the Royal Society for the Prevention of Accidents
("ROSPA"):
- Gold Award - for Calendar Year ("CY") 2023 health and safety performance of the
  Anasuria Floating Production Storage and Offloading ("FPSO") facility - 25th consecutive annual award
- Patron's Award - for 25 consecutive Gold Awards
In July 2024, we received awards from Offshore Energies UK at their Offshore Safety Awards
2024 for:
- Maritime Safety
- Sharing and Learning

Proposed Acquisition of TotalEnergies Brunei

As announced on 14 June 2024, the Group's wholly owned subsidiary, Simpor Hibiscus Sdn Bhd, entered into a conditional Share Purchase Agreement ("SPA") with TotalEnergies Holdings International B.V. for the proposed acquisition of the entire equity interest in TotalEnergies EP (Brunei) B.V. ("TotalEnergies Brunei") for a total cash consideration of USD259.4 million.

The proposed acquisition is for TotalEnergies Brunei's 37.5% operated interest in the MLJ field, a high- quality gas asset located offshore Brunei ("Asset"). Located in a prolific hydrocarbon-bearing region,

the Asset was discovered in 1989 and has been producing gas and condensate since 1999. The Asset has long-term production rights of up to 15 years (expiring on 23 November 2039), if extended with the agreement of the joint venture parties. Other parties holding the remaining interest in the Asset are Shell Deepwater Borneo Limited (35.0%) and Brunei Energy Exploration Sdn Bhd (27.5%), a company ultimately owned by Brunei Minister for Finance Corporation.

This proposed acquisition is expected to bring the gas production share of the Group's portfolio to almost 50%, in line with the Group's energy transition strategy of acquiring gas-weighted assets in stable regulatory jurisdictions. This transaction also represents a significant step towards fulfilling the Group's aspiration of becoming a net zero emissions producer by 2050.

The SPA is subject to receipt of the approval of shareholders of Hibiscus Petroleum at an Extraordinary General Meeting to be announced at a later date.

PKNB Cluster PSC Award

On 26 July 2024, we announced the award by PETRONAS of 65% Participating Interest ("PI") and operatorship in the PKNB Cluster PSC to our wholly owned subsidiary, Hibiscus Oil & Gas Malaysia Limited ("HML"). The remaining PI is held by PETRONAS Carigali. The effective date of the PSC is 1 July 2024 with a contract duration of 24 years.

The PKNB Cluster PSC consists of four discovered gas fields, namely Pertang, Kenarong, Noring and Bedong, which are located in shallow waters between 65 and 75 metres depth offshore the east coast of Peninsular Malaysia. The fields are located to the south, and within tie-back distance of the PM3

CAA PSC.

This is Hibiscus' first direct award PSC in Malaysia, with first gas expected in CY2028 from the Pertang and Kenarong fields. A total of 16 wells are planned to be drilled, connected to three future platforms.

Figure 1: Development Schematic for PKNB Cluster PSC

PM327 PSC Farm-In

On 23 August 2024, we announced that our wholly owned subsidiary, Straits Hibiscus Sdn Bhd had signed an agreement to acquire a 30% PI in the Block PM327 PSC ("PM327 PSC") through a farm-in arrangement with PETRONAS Carigali. The transaction is currently pending regulatory approvals and fulfilment of conditions precedent.

The Effective Date of the farm-in is 5 July 2024. Interest in the PM327 PSC was initially awarded to PETRONAS Carigali and E&P Malaysia Venture Sdn Bhd (both wholly-owned subsidiaries of PETRONAS) in 2023 and has a contract duration of 28 years.

The PM327 PSC is one of the largest exploration blocks offshore Peninsular Malaysia, covering an area of more than 12,500 square kilometres, with water depths ranging between 20 to 75 metres. It is located to the south of the PM3 CAA PSC, offering potential tie-in synergies for commercial discoveries in the north of the PM327 PSC. Exploration activities commenced in 2023 and the programme includes the acquisition of new 3D seismic, reprocessing existing seismic data and the phased drilling of exploration wells.

Figure 2: Location of PM327 PSC

Current Reserves and Resources

Figure 3 below depicts our updated net entitlement to oil, condensate and gas reserves and resources, as at 1 July 2024, within the licenses in which we have interests. The updated figures were updated after adjusting for the total net production from 1 January to 30 June 2024 and any incremental reserves and resources from new projects.

Figure 3: Hibiscus Petroleum's net reserves and resources.

Notes to Figure 3:

Reserves and resources are as of 1 July 2024.

PM3 CAA, Anasuria and Teal West 2P Reserves are based on internal estimates.

North Sabah 2P Reserves and 2C Contingent Resources are based on SEA Hibiscus Sdn Bhd ("SEA Hibiscus")'s current estimated net entitlement, based on RPS Energy Consultants Limited ("RPS")'s report in August 2023, adjusted for actual production in the 12 months ended 30 June 2024.

Kinabalu and Block 46 Cai Nuoc 2P Reserves are based on Peninsula Hibiscus Group's current net entitlement, based on RPS' report in August 2022, adjusted for actual production in the 24 months ended 30 June 2024 and incremental 2P Reserves from new projects. Sunflower 2C Contingent Resources are based on Anasuria Hibiscus UK Limited ("Anasuria Hibiscus UK")'s interest and extracted from RPS' report in August 2020.

Marigold, PKNB and VIC/RL17 2C Contingent Resources are based on internal estimates.

Operational Performance in the Current Quarter

Figure 4 below summarises the operational performance of the Group for the Current Quarter.

						North			Peninsula			Anasuria		Total or
		Unit						Hibiscus
					Sabah					Cluster			Average
								Group1

Average uptime	%			86		89		78		-

Average gross oil & condensate production		bbl/day	12,715		26,851		4,921		44,487
Average net oil & condensate production		bbl/day	4,705		6,549		1,741		12,995
Average gross gas export rate @		boe/day	-		33,072		828		33,900
Average net gas export rate @		boe/day	-		6,978		172		7,150
Average net oil, condensate and gas		boe/day	4,705		13,527		1,912		20,144
production rate

Total oil & condensate sold		bbl	614,570		653,107		188,643		1,456,320
Total gas sold		MMscf	-		3,772		93		3,865
	boe			-		628,636		15,535		644,171


Total oil, condensate & gas sold		boe			614,570		1,281,743		204,178		2,100,491
Average realised oil & condensate price		USD/bbl			94.63		86.35		84.28		89.58
Average gas price		USD/Mscf			-		6.22		8.87		-
Average realised oil, condensate and gas		USD/boe			94.63		62.31		81.92		73.67
price

Average production operational		USD/boe			25.88		17.52		32.39		-
expenditure ("OPEX") per boe2

Average net OPEX per boe3		USD/boe			36.11		31.68		32.39		-

Figure 4: Summary of operational performance for the Current Quarter.

Notes to Figure 4:

Peninsula Hibiscus Group's assets include 2012 Kinabalu Oil PSC, PM3 CAA PSC and Block 46 Cai Nuoc PSC.
This is computed based on gross production OPEX divided by gross oil, condensate and gas production.
This is computed as follows:
+ ( )

, ( )

Conversion rate of 6,000 standard cubic feet ("scf") per boe. boe - bbl of oil equivalent.
Mscf - thousand scf. MMscf - million scf.
Figures are subject to rounding.

FY2025 Oil and Condensate Offtake Schedule and Gas Sales Outlook

Figure 5 below illustrates the Group's FY2024 oil and condensate offtakes and gas sales from our producing assets, together with the latest estimates for the financial quarter ending 30 September 2024 ("Q1 FY2025") and the financial quarter ending 31 December 2024 ("Q2 FY2025"). In summary, we sold a total of 7.85 MMboe of oil, condensate and gas in FY2024, comprising 5.17 MMbbl of oil and condensate and 2.69 MMboe of gas, in excess of our original guidance of 7.5 to 7.8 MMboe. We estimate to sell a total of 1.7 MMboe and 2.5 MMboe of oil, condensate and gas in Q1 FY2025 and Q2 FY2025 respectively, net to the Group. For FY2025, assuming the acquisition of TotalEnergies Brunei is completed by October 2024, we estimate total sales volume to be approximately 8.6 to 8.9 MMboe, an increase of 10 to 14% over FY2024 volumes.

								Total net oil, condensate and gas sales volume (boe)

				Actual -		Latest Estimate - Q1 FY2025		Latest Estimate - Q2 FY2025

				FY2024		Jul		Aug		Sep			Total		Oct		Nov		Dec	Total
						20241		2024		2024				2024		2024		2024

PM3 CAA	Oil & Cond.	1,272,926	-	300,000	-		300,000	-	300,000		300,000	600,000
		Gas	2,601,359	236,788	146,000	233,000		615,788	225,000	228,000		229,000	682,000
Kinabalu	Oil	1,296,685	-	-	-		-	300,000	-		300,000	600,000
PM305/	Oil	27,090							[n/a - licence relinquished]
	PM314

Block 46	Oil	-	-	-	-		-	-	-		112,000	112,000
North	Oil	1,814,638	-	300,000	300,000		600,000	-	300,000		-	300,000
	Sabah

Anasuria	Oil	754,487	-	-	121,000		121,000	-	-		190,000	190,000
	Cluster	Gas	84,038	9,100	300	8,300		17,700	11,200	9,900		9,000	30,100
Total		7,851,222	245,888	746,300	662,300		1,654,488	536,200	837,900		1,140,000	2,514,100
		Oil & Cond.	5,165,826	-	600,000	421,000		1,021,000	300,000	600,000		902,000	1,802,000
		Gas	2,685,396	245,888	146,300	241,300		633,488	236,200	237,900		238,000	712,100

Figure 5: The Group's net offtake schedule for Q1 FY2025 & Q2 FY2025.

Note to Figure 5:

1 Actual.

Production

(Note: Block 46 has not been included in this section as its production is not material.)

Malaysia South China Sea

North Sabah PSC: Production Operations

The table below provides a summary of key operational statistics for the North Sabah asset, based on the 50% participating interest held by SEA Hibiscus, for the Current Quarter and the prior three financial quarters:

		April to	January to	October to	July to
	Unit	June	March	December	September
		20244	2024	2023	2023
Average uptime	%	86	96	93	83

Average gross oil production	bbl/day	12,715	13,688	13,914	12,845
Average net oil production	bbl/day	4,705	5,065	5,148	4,357

Total oil sold	bbl	614,570	299,584	351,350	549,134
Average realised oil price1	USD/bbl	94.63	93.54	92.83	97.03
Average production OPEX per bbl2	USD/bbl	25.88	15.80	21.47	24.00
Average net OPEX per bbl3	USD/bbl	36.11	20.83	30.69	36.01

Figure 6: Operational performance for the North Sabah asset.

Notes to Figure 6:

The average realised oil price represents the weighted average price of all Labuan crude oil sales from SEA Hibiscus.
This is computed based on gross production OPEX divided by gross oil production.
This is computed as follows:

+ ( )

, ( )

4 Figures for the period April 2024 to June 2024 are provisional and may change subject to the PSC Statement audit and PETRONAS's review.

Average gross oil production is lower compared to the financial quarter ended 31 March 2024
("Preceding Quarter") due to commencement of planned maintenance activities.
Two offtakes of 614,570 bbls of oil in the Current Quarter; expecting to sell approximately 600 kbbls of oil in Q1 FY2025.
Average OPEX per bbl is higher in the Current Quarter due to commencement of planned maintenance activities.
Capital expenditure: RM82 million net to SEA Hibiscus during the Current Quarter mainly due to cost incurred for SF30 Water Flood Phase 2 development project, which entails the drilling of 6 water injectors and 5 oil infill wells at the South Furious 30 field in CY2024.

Kinabalu Oil PSC: Production Operations

The table below provides a summary of key operational statistics for the Kinabalu asset, based on the

60% participating interest held by HML, for the Current Quarter and the prior three financial quarters:

		April to	January to	October to	July to
	Unit	June	March	December	September
		20241	2024	2023	2023
Average uptime	%	84	90	89	68
Average gross oil production	bbl/day	7,869	8,770	9,115	6,008

Average net oil production	bbl/day	2,967	3,432	4,102	2,704
Total oil sold	bbl	349,457	308,799	350,728	287,701

Average realised oil price	USD/bbl	84.09	93.13	89.84	103.16
Average production OPEX per bbl2	USD/bbl	23.15	9.74	16.63	23.32
Average net OPEX per bbl3	USD/bbl	38.25	15.36	23.40	30.83

Figure 7: Operational performance for the Kinabalu asset.

Notes to Figure 7:

Figures for the period April 2024 to June 2024 are provisional and may change subject to the PSC Statement audit and PETRONAS's

review.

This is computed based on gross production OPEX divided by gross oil production. This is computed as follows:

+ ( )

, ( )

Lower production in the Current Quarter as compared to the Preceding Quarter due to higher decline from KND-18 and commencement of annual planned major maintenance campaign which took place from 26 June to 5 July 2024.
Average OPEX per barrel for Current Quarter is higher than the Preceding Quarter due to commencement of annual planned major maintenance activities coupled with lower production.
Capital expenditure: RM10 million net to HML during the Current Quarter related to the Kinabalu redevelopment and Canned Installed Pumping System activities.

Commercial Arrangement Area

PM3 CAA PSC: Production Operations

The table below provides a summary of key operational metrics for the PM3 CAA asset, based on the 35% participating interest held by HML and Hibiscus Oil & Gas Malaysia (PM3) Limited ("HMPM3") for the Current Quarter and the prior three financial quarters:

				April to	January to	October to	July to
			Unit	June	March	December	September
				20241	20241	2023	2023
Average uptime	%	91	94	93	83
Average gross oil & condensate production		bbl/day	18,768	19,471	20,536	18,230
Average net oil & condensate production		bbl/day	3,491	2,888	3,453	2,915
Average gross gas export rate		boe/day	33,072	33,054	32,115	28,635
Average net gas export rate		boe/day	6,978	7,140	8,090	6,441
Average net oil, condensate & gas		boe/day	10,469	10,029	11,543	9,356
	production rate

Total oil & condensate sold		bbl	302,571	314,237	291,218	364,900

Total gas sold		MMscf	3,772	4,136	4,116	3,585
Average realised oil & condensate price		USD/bbl	88.96	89.30	92.41	91.78

Average realised gas price		USD/Mscf	6.22	5.41	5.96	6.13
Average production OPEX per boe2		USD/boe	16.36	9.55	15.18	14.32
Average net OPEX per boe3		USD/boe	28.78	17.86	24.80	26.41

Figure 8: Operational performance for the PM3 CAA asset.

Notes to Figure 8:

Figures for the period January 2024 to March 2024 are provisional and may change subject to the PSC Statement audit and PETRONAS's review.

This is computed based on gross production OPEX divided by gross oil, condensate, and gas production. This is computed as follows:

+ ( )

, ( )

Average gross oil and condensate production is lower in the Current Quarter as compared to the Preceding Quarter due to lower performance in April and May 2024 following BKC-BSA pipeline integrity (BKC production reinstated end of May 2024), partially offset with Bunga Aster first oil achieved 4th May 2024 and sustained performance from H4 wells.
Average gross gas export in the Current Quarter is consistent with the Preceding Quarter.
As shown in Figure 5, HML expect to sell approximately 300 kbbls of oil and condensate and 616 kboe of gas in Q1 FY2025 from PM3 CAA.
Average production OPEX per boe higher than Preceding Quarter due to increase in maintenance and production enhancement activities.
Capital expenditure: RM69million net to HML and HMPM3 in the Current Quarter for costs related to Bunga Aster-1 exploration well drilling, H4 drilling, Bunga Orkid-D wellwork activities and other minor capex projects.

United Kingdom

Anasuria Cluster: Production Operations

The table below shows the operational performance achieved by the asset, based on Anasuria Hibiscus UK Limited ("Anasuria Hibiscus UK")'s participating interest, for the Current Quarter and for the prior three financial quarters:

				April to		January to		October to		July to
			Unit	June		March		December		September
				2024		2024		2023		2023
Average uptime	%	78		93		83		89

Average net oil production rate		bbl/day	1,741		2,054		1,882		1,970
Average net gas export rate @		boe/day	172		261		237		250
Average net oil equivalent		boe/day	1,912		2,315		2,118		2,220
	production rate


Total oil sold		bbl	188,643		188,654		173,996		203,194
Total gas exported (sold)		MMscf	93		142		130		138
Average realised oil price		USD/bbl	84.28		87.68		81.96		97.24
Average gas price		USD/Mscf	8.59∞/11.33#	8.61∞/9.59#	13.43∞/15.21#	9.24∞/10.74#
Average production OPEX per boe1		USD/boe	32.39		25.59		32.97		27.22

Figure 9: Operational performance for the Anasuria asset.

Notes to Figure 9:

1 This is computed based on gross production OPEX divided by gross oil and gas production. @ Conversion rate of 6,000 standard cubic feet ("scf") per boe.

∞ For Cook field.

# For Guillemot A, Teal and Teal South fields. Figures are subject to rounding.

Production in the current quarter was lower due to the Cook well being shut in from 25 Aprill till 19 May 2024 because of a blocked corrosion inhibitor line.
Average OPEX per boe for the Current Quarter is higher than the Preceding Quarter primarily due to shut in of the Cook Well which affected production & costs.

One offtake of 188,643 bbls of oil in the Current Quarter. Expect to sell approximately 121 kbbls of oil and 18 kboe of gas in Q1 FY2025.
Capital expenditure: RM23.6 million, primarily for the upgrade and replacement of facilities on the Anasuria FPSO.

UK - Fyne (Licence P2451)

The North Sea Transition Authority ("NSTA"), in April 2024, did not object to our submitted Concept Select Report. This report identifies the Anasuria FPSO as the selected production facility, for Fyne hydrocarbons. In addition, the NSTA approved the extension of the Licence P2451 containing the Fyne oil field, until 30 September 2026. A condition of the licence extension is that by 30 September 2026, Anasuria Hibiscus UK, as operator of the Fyne development, will have achieved an approved Field Development Plan ("FDP") and Production Consent on behalf of the licensees. Anasuria Hibiscus UK, working with our partners, plan to submit the FDP and Environmental Statement in CY2024, in the event of a successful, updated, economic assessment of the Fyne project. First oil from the Fyne development is expected in CY2027.

UK - Teal West (Licence P2535)

Progress on the Teal West Licence continues with preparations being made to spud the first Teal West production well in Q2 CY2025, install the umbilical and pipeline back to the Anasuria FPSO in second half of CY2025 with first oil planned for the end of CY2025/early CY2026. To facilitate this, the contract for vessels for a Summer 2025 installation program for the umbilical and pipeline has been secured and the rig contract is well advanced. In addition, in April 2024, the NSTA issued the final Field Determination for Teal West and included Part Block 21/25a (Licence P13), which Anasuria Hibiscus UK has been a joint equity holder since 2016. This Part Block lies adjacent to and is connected to Teal West. Given the decision of the NSTA, additional reserves were added to the original Teal West volumes and this is expected to enhance oil production from the Teal West production well.

UK - Marigold and Sunflower (Licence P198)

In April 2024, Anasuria Hibiscus UK submitted a licence extension request to the NSTA to extend the Marigold and Sunflower licence by five years to December 2029 ("Long-stop" date). Discussions with the NSTA regarding the licence extension together with the Repsol Resources UK/NSTA Piper B tariffs are ongoing.

UK - Marigold, Sunflower and Surrounding Fields

In 2024, the NSTA awarded Anasuria Hibiscus UK a number of surrounding Blocks containing discovered fields, leads and prospects, as part of the 33rd UK Offshore Licencing Round. These Blocks are close to or contiguous to the existing Marigold and Sunflower Blocks. Collectively, these Blocks are known as the Greater Marigold Area Development ("GMAD") and include Blocks 15/12a and 15/17a (Licence P2518) which contains the Kildrummy discovery, Blocks 15/18a and 15/19a (Licence P2608) which contains the Crown discovery and Blocks 15/13c and 15/18c (Licence P2635) which both contain identified prospects and leads. Anasuria Hibiscus UK has noted these discovered fields as part of the GMAD in the afore mentioned licence extension request.