RH Petrogas

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RH PetroGas (RHP SP) shares have surged almost fourfold over the past month and now trades at a 3-year high.

In response to SGX’s query on the unusual trading activity, the company stated that it is currently in discussions with one of its controlling shareholders as regards to capitalisation of certain loans.

Source: KGI

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RHP delivered record earnings of US$3.4m (+466% yoy) in 1Q21.

This earnings trajectory appears sustainable, as the strong 1Q21 was driven by:
a) a strong recovery in oil prices;
b) reduced production costs, implemented since mid-20 due to COVID19 (US$27.5/bbl in 2020 vs US$31.5/bbl in 2019); and
c) renewal of a 20-year production sharing contract (PSC) for one of its oil fields in Indonesia.

RHP trades at 7x 2021F PE, annualising 1Q21 EPS of US$0.46/share (S$0.62/share).

Source: UOBKH

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Business. Despite volatility in oil prices, RHP remained profitable in the past three of four years (except in 2020 due to COVID-19), with a portfolio consisting of two upstream assets located in Indonesia.

RHP’s assets include Kepala Burung (Basin PSC) and Salawati Kepala Burung (Island PSC) which have a relatively stable net production of about 4,000 barrels of oil equivalent per day since 2016.

In Jul 18, RHP was awarded new 20-year PSCs for both assets that expired in 2020.

RHP’s effective working interest has increased from 54% to 58%

Source: UOBKH

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RH Petrogas (RHP SP)

A Strong 1Q21 Paves Way For A Record Year, Backed By Favourable Oil Prices

Q21 earnings of US$3.4m (+466% yoy) appear sustainable, driven by:
a) a strong recovery in oil prices;
b) reduced production cost since mid-20; and
c) renewal of 20-year PSCs for oilfields in Indonesia, which raised RHP’s effective stake from 54% to 58%.

RHP’s 20-year DCF valuation ranges from $0.29 to $0.40, assuming oil price of US$65-75 per barrel. RHP trades at 7x 2021F PE, annualising 1Q21 EPS. In 2Q21, Brent oil price continued to rally 13% qoq.

Source: UOBKH

https://research.uobkayhian.com/content ... 090fdee036

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RH Petrogas proposes capitalisation of shareholders' loans into 90m new shares

MAINBOARD-LISTED RH Petrogas announced on Wednesday that it has entered into a conditional capitalisation deed for the company to allot and issue 90 million new shares at S$0.172 apiece to a company, Surreyville.

In a bourse filing, it said this would be in full repayment and discharge of the sum of S$15.48 million, being a significant portion of the interest-free shareholder loans owed by the company to Surreyville.

RH Petrogas' controlling shareholders are Tiong Hiew King and Tiong Ik King, who together with their family members, hold an aggregate of 63.9 per cent shareholding interest in the company.

Surreyville is an entity within the Tiong family group that holds around 28.6 per cent direct shareholding interest in RH Petrogas.

The 90 million in new shares will constitute around 10.8 per cent of the total enlarged issued share capital of the company, following the completion of the proposed capitalisation.

It will result in Surreyville holding around 36.4 per cent of the total enlarged issued share capital of the company; the Tiong family group's shareholding interests would rise to around 67.8 per cent.

RH Petrogas said the proposed capitalisation would reduce the debt burden of the group without adversely affecting its operating cash flow.

Source: Business Times

https://www.businesstimes.com.sg/compan ... new-shares

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3Q Results

Revenue: +87%
Profit After Tax: US$5.5m

https://links.sgx.com/FileOpen/RHPL_3Q2 ... eID=690354

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RH Petrogas (RHP SP) surged between 7%on Tuesday after oil prices extended their gains and traded near their one-month highs.

Worries over Omicron are easing resulting in more optimism over oil demand.

Money managers raised their net long US crude futures and options positions in the week to 21 December, according to the US Commodity Futures Trading Commission.

All eyes will be on OPEC+’s meeting on 4 January at which the group will decide whether to go ahead with the scheduled 400,000 barrels per day production increase for February.

Source: KGI

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FY 2021

Revenue: +63% yoy
EPS 0.0381
PE @ 0.265: 7

https://links.sgx.com/FileOpen/RHPL_FY2 ... eID=703610

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RH Petrogas Ltd (RHP SP) shares gained 3.4% yesterday.

WTI crude futures traded higher above $106 per barrel on Tuesday, after a 7% decline in the previous session, as investors were monitoring the situation in Ukraine and assessing the impact of Covid curbs in China on global demand ahead of the OPEC+ meeting next Thursday.

Shanghai lockdown could cut oil demand by as much as 200,000 bpd, according to Rystad Energy.

Meanwhile, major oil producers will meet to discuss its supply policy for May and the group has signaled it will stick to its existing plan and ratify an increase of 430,000 bpd in output.

Source: KGI

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RH Petrogas (RHP SP)
Trading Buy Range: S$0.280-0.285
Last price: S$0.280
Target price: S$0.320
Protective stop: S$0.250

The price managed to stay above the gap support that was created on 30 May.
Conversion and base lines remain in a bullish crossover. The MACD is bullish and is rising.

We are likely to see the price rebounding to move higher.

The potential upside target is S$0.32. Stop-loss could be placed at S$0.25.

Approximate timeframe on average: 1-2 weeks
(initiate this trade idea if the stock hits the entry price range within three trading days).

Source: UOBKH