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We took RHP?s management on a non-deal roadshow on Tuesday. The company has published its 2014 drilling programme, planned reserve upgrades, and schedule of upcoming news flow. Operationally, wireline logs indicate potential hydrocarbon zones in the Klagalo-1 well, while development wells at Klalin-15 and -17 have gas and condensate flows with rates to be confirmed.
The stock is trading at a 35% discount to its production assets. Maintain BUY, with SGD1.38 TP.
■ Heavy focus on drilling development wells in 2014
RHP?s 2014 work programme includes nine development wells and one appraisal well (contingent on Klagalo-1 being successful) in the Basin PSC. For Fuyu, 40 development wells are planned for 2Q-3Q14, with a deep exploration well to test the deep gas zone. Total net drilling capex is USD60m, and management expects > 80% cash refund in 2014 from cost recovery oil.
■ 2P reserves to treble
RHP targets to upgrade 19mmboe (million barrels of oil equivalent) of 2C resources to 2P reserves in 2014. This will bring RHP?s EV/2P ratio down from USD30.9/boe to USD11.4/boe by end-2014.
KrisEnergy trades at an EV/2P of USD27.6/boe. The Asian average is USD21/boe.
■ Positive developments
We understand the Klagalo-1 well was completed ahead of schedule, with no hiccups in cementing and perforation, and wireline logs indicate potential hydrocarbons. Three zones will be each be tested for seven days. We expect the Klalin -15 and -17 wells to boost existing output with gas and condensate flows.
■ 50% historical exploration success rate
Management shared that RHP has had six successful exploration wells out of 12 drilled in its three-year history. This is a commendable track record, indicating success in executing its strategy to focus on low-to-medium risk assets.
■ Targeting oilfield acquisition
RHP is looking to acquire a producing field in the South-East Asian region. We do not expect this to be a large acquisition. Project financing should be available, and the agreement could be finalised within a few months.
Intra Day
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■ Maintain BUY, SGD1.38 TP
RHP continues to trade at a 35% discount to its production assets, implicitly pricing in a Brent crude price of USD80/bbl, or a 32% discount rate, both of which are too pessimistic. (Read Report)
while RH and Rex resting, suppose may have opportunity to make some $$ from CapitaLand bounce
students made some $$ from RH petrogas & dukang bounce
for more details , see http://sgxswinger.blogspot.sg/
Looks like this may move up soon.
nice nice rex got news
rex--- resistance 68, 75..
rh- resistance 60, if cross perhaps 69?
nice move ..... rowsley next .....
Spivvy ( Date: 23-Nov-2013 16:12) Posted:
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Good start for Rh this morning
IMO rhp hitting 60 on monday is not difficult.
rhp rex brother brother? or sister sister? or friend friend? but colour no same same..?
Needs to start delivering, same issue as rex
Oil & Gas play again? Time for sector to cheong?
seanpent ( Date: 20-Nov-2013 10:07) Posted:
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Osk say buy because rh assets worth 90cents...even zircon gone....I feel that china oil field still drag is a headaches...how much money still need to feed this whale....who know ? Now koi 2 is another hope..but extra 1000bpd is good but far from estimate 15000bpd hope...company may need to buy more oil field...price below 65cents look ok...but looking for 90cents may need lot of good news...
wah piangz..! missed this rh pokemon again..
Good closing! 0.575
Next week to achieve 60 hopefully
falling back again? not yet seow.. :P
Time to rise high
Jeep at 55 going up !!
up already!!