RH Petrogas - UOB Kay Hian 2024-05-14: 1Q24 a Lot To Like – Higher Oil Production & Prices; Good Cost Control

• RHP reported a strong set of 1Q24 results that were above expectations. Net profit rose 18% y-o-y on the back of slightly higher oil production, better realised oil prices and very commendable cost control. Planning for the company’s two exploration wells for 2H24 remains on track.
• - Read this at SGinvestors.io -

1Q24 results slightly stronger than expected.

• RH PetroGas (RHP, SGX:T13)’s 1Q24 revenue rose over 5% y-o-y to US$23.8m, pushing PATMI up by 18% y-o-y to US$3.5m. This was better than our expectations as it represents >27% of our full-year PATMI estimates.
• The strong 1Q result was due to oil production (+1.2% y-o-y to 4,976bpd), lower field operating costs and lower general & administrative costs.
• - Read this at SGinvestors.io -

Drilling plans for 2H24.

• RHP’s two-well drilling programme in the Basin PSC (RHP’s stake: 70%) includes:
  1. one well targeting a shallow reservoir with potential unrisked recoverable reserves of 8-10mmbbl, and
  2. the second one targeting a deeper reservoir of around 8- 10bcf of gas at around 10,000ft.
• The gross cost of the wells will be US$4m and US$8-10m respectively. It is important to note that Pertamina drilled two successful oil and gas wells that were only 2-4km away from RHP’s first planned shallow well and thus it would appear that the likelihood of a positive result is high in our view.

Strong operating cashflow.

• Read more at SGinvestors.io.

Adrian LOH UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-05-14 SGinvestors.io

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