Hibiscus Petroleum Berhad (HIBISCS) Earnings Call Transcript & Summary

Good evening, everyone, and [Foreign Language] to those celebrating. Thank you for joining us for the Hibiscus Petroleum Quarter 2 Financial Year 2024 Analyst and Fund Managers Briefing. I'm Lily Ling, VP of Corporate Development. And I'm joined by our CFO, Yip Chee Yeong; Bob Thakur, our VP of Economics and Business Planning; Dr. Pascal Hos, our Country Head, Malaysia and Vietnam; Joyce Vasudevan, our Head of Corporate Finance; and Andrew Fernandes from my team. Our Managing Director, Dr. Kenneth Pereira, will join us shortly after his Board meeting has ended. We are also accompanied by the team from JPR, our recently appointed by our partner. I believe you would have received e-mail invite from them for this grouping. And to those who checked in earlier, Andrew and myself are very much on board for IR. And yes, I'm grateful to stay on my job. This afternoon, we released our results and on our website, you will find our corporate and business update, CBU, which details out our financial and operational updates, press release and these briefing slides, which can also be found in the Zoom chat. We will kick off with the presentation followed by the FAQ. [Operator Instructions] So I'll pass this over to Pascal now.

All right. Thanks, Lily. Thank you for joining us this late. Let's dive in straight away. So I get the pleasure of giving you the highlights of quite an exciting quarter. To start off with, I just want to highlight that this was the very first quarter that we've actually achieved above 22,000 barrels of oil equivalent per day in terms of production. The total oil and condensate sold is a bit lower this quarter compared to the previous quarter, but that's pretty much just a matter of timing of the offtakes. So we actually produced more oil than in the previous quarter. We also produced more gas. So we sold 0.7 million barrels of oil equivalent of gas, which is a 14.1% increase improvement on Q-o-Q basis. Just to highlight that we're still on track to hit the financial year 2024 sales target of between 7.5 million and 7.8 million barrels of oil equivalent. Okay. So in terms of the financials, we generated revenue of MYR 627.6 million, down over previous quarter, which is primarily driven by lower oil prices. The EBITDA reached MYR 325.3 million, also is roughly the same percentage lower than the previous quarter. On the back of these results, we declared a second interim dividend of MYR 0.02 per share for fiscal year 2024. And we've now completed the share buyback of 3 million shares that have been retained as treasury shares. So in total, in terms of dividend, we've declared MYR 0.04 so far. And the target is for full financial year 2024 to provide at least MYR 0.075 per share dividends. In terms of projects highlights, this last quarter, we kicked off exploration drilling. We're in total drilling 4 targets. The first 2 targets have been completed, and the data is being analyzed as we speak and we're currently drilling the third target. In terms of the U.K., the Concept Select Report for the Fyne field has been submitted to the authority, the NSTA. So we're waiting on feedback from that report. On top of that, recently, we participated in the 33rd U.K. offshore licensing rounds, and we were successfully awarded 5 blocks in the Central North Sea, while complementing our existing assets there already. In terms of the Teal West, the update there is the drilling is to commence in the middle of calendar year 2025 with first oil targeted towards the end of calendar year 2025. Okay. And with that, I hand it over to Deepak to give you operational and financial updates.

Thanks, Pascal. So let's go through the operational highlights and operational metrics for each of the PSCs before we hand it over to CY for the financial highlights. So these slides gives you an operational highlights for all of our producing assets. So for Hibiscus Group, as Pascal stated, we produced 22,000 barrels of oil equivalent per day. That's our net production of oil condensate and gas. In terms of realized price, our realized oil and condensate price was $90 per barrel. And once we integrate the gas, it's roughly about $70 per BOE. Total volumes of oil condensate and gas, which we have sold in this quarter, was 1.8 million or 1.9 million barrels of oil equivalent. Combined quarter 1 and quarter 2 for FY 2024, we have sold roughly about 3.9 million barrels of oil equivalent, and we are on track to deliver close to 7.7 million barrel of oil equivalents. So remaining 3.8 million barrels of oil equivalent would be solely in quarter 3 and quarter 4 going forward. At the bottom, we are showing the production and unit operating cost. So overall, the production level in all of the producing assets have improved. Anasuria more or less very similar to what we produced last quarter, but in North Sabah and Peninsula, a significant improvement in production. On the back of basically the last planned maintenance activity has been completed, and then in Peninsula specifically, the wells which we drilled in 2023, the contribution from all of the wells have been materialized, right? So in North Sabah, we produced 5,133 barrels per day. Anasuria, 2,100 barrels per day. Barrels of oil equivalent per day at Peninsula is 14,940 barrels of oil equivalent. Our unit operating cost is slightly improved in North Sabah because of higher production numbers, so roughly about USD 30.7 per barrel. Anasuria is USD 32.97 per BOE, and Peninsula is USD 26.75 per BOE. Okay. Let's go to the next slide. So this particular slide is for Kinabalu PSC. So we are going to cover Kinabalu, PM3 CAA, North Sabah and Anasuria, 4 producing assets. So in Kinabalu PSC, 2 significant -- with drilling of 2 infill wells completed last year in 2023, we have seen a significant improvement in net production numbers. Now it's -- last quarter, it was 4,096 barrels per day compared to previous quarter was 2,704 barrels per day. And as a result of it, net OpEx per barrel has reduced significantly. Okay. Let's go to the next slide. PM3 CAA PSC, so the net average production rate is 10,532 barrels of oil equivalent per day, which is on the back of the sustained oil production from the H4 drilling campaign of the wells, which we drilled last year in 2023. The OpEx per barrel of oil equivalent is more or less same, slightly increased to 27.19 compared to the previous quarter because of some one-off plant maintenance activities in specifically related to both FSO, which we run. So in terms of the life extension projects, which were done. And also, we delivered higher gas sales compared to the last year due to the plant -- due to the completion of the plant maintenance activities. Let's go to the next slide then. So the North Sabah, we produced 5,133 barrels per day. Significant improvement in production, net production for North Sabah is coming from 2 key factors. One is we are drilling assets -- so we are spending CapEx on SF30 Water Flood Phase 2 project. So all of this CapEx has helped us to increase our entitlement to close to 36%, 37% in this particular quarter. And of course, second is the completion of the maintenance program. Going back to the exploration activities, which Pascal was talking about, there are 3 targets. 2 targets have been completed. We're drilling third target. And then we will -- with all of the data are being reviewed by our subsectors. Okay. Let's go to the next slide then. It is U.K. Anasuria cluster. So in Anasuria, we produced 2,118 barrels of oil equivalent per day, very much similar to our last quarter. We completed our 15 days plant shutdown activity at Anasuria FPSO. Net OpEx per barrel you would see a slight increase, increase by about $4 to $5 per BOE basically related to one-off health and safety-related inspection activities, which we have to do that. Coming to the forward plans in terms of our U.K. development assets, so the Teal West, first oil expected in the quarter 4 calendar year 2025. Our Fyne's discovered asset, which we acquired from Rapid. So we have submitted our Concept Select Report to NSTA. The Fyne is also candidates to tie back to Anasuria FPSO. So very similar to what we are trying to do in Teal West. Teal West well will be tied back to Anasuria FPSO. And in the next few years, we will do the same for the Fyne discovered Fyne fields, that's objective. In addition, we have been awarded 5 blocks in U.K., North Sea. It's all proximity to the Marigold field just to kind of aggregate all of those discoveries around Marigold field. Okay. Let's go to the next slide. So this slide shows the reserves and resources numbers. Basically, 2P reserves and 2C resources for Hibiscus Group. All of these numbers are net to Hibiscus Group. So our total 2P oil and condensate results as of January 1, 2024, previously, we were showing the reserves and resources numbers as of July 1, 2023. Now what we have done is we have subtracted the actual oil, gas and condensate production from the previous reported reserves, and this is the updated numbers. So as of January 1, 2024, our 2P reserves stands at roughly about 60 million barrels of oil equivalent, out of it 49.9 million is oil and condensate and 11 million barrels of oil equivalent is gas reserves. On the third column, third bar, we are showing -- this is 2C oil resources, which is 59 million barrel of oil, predominantly coming from 33 million barrels, biggest contributor is the Marigold, followed by Australia and then North Sabah asset. Let's go to the next slide. So I will hand it over to CY.

Thanks, Deepak. Good evening, everyone. Now I think you've heard from Deepak and also from Pascal here that we have generated quite favorable operational performance during the quarter and are sitting above 22,000 BOE per day for the first time in 1 quarter. But that did not really translate into the sales volume, as you are aware, that our sales volume is -- it depends on the timing of the offtakes. So that plays a fairly big part in the revenue that we have recorded for the quarter. You can see that in the first -- the chart on the left, far left, revenue went down by 15.9%. And that's really because of North Sabah, when you compare against the last preceding quarter, they had 2 offtakes generating close to about 550,000 barrels, whereas this time around, it was not taken. So that's really, again, timing North Sabah in a particular financial year, you would expect them to generate about 5 offtakes. So that -- so 1 quarter, we always have 2, and that was the last quarter. So hence, you will see this particular -- I mean this is the main reason really. We also highlighted that oil prices that we have realized for all the sales is a little bit -- was a bit lower compared to last quarter. When I say lower, it's not like low. It's not low, really. Our average oil price for the quarter was MYR 90.21, and that's fairly high, actually. But if you compare to last quarter, it was touching almost MYR 100. And hence, that also if you compare 2 quarters, then you get this particular finding. And so along with that, I move to EBITDA. The thing is with EBITDA, if we look at the Peninsula, it is lower. But if you look at the EBITDA margin, despite lower oil prices -- oil and gas prices, we have actually managed to maintain our margin to exceed 50%. So 52.6% this time around, last time around, against 51.8% in the second quarter. So -- and the quantum that have gone down is really because of the low revenue. But the reason why we could maintain our profit margin, importantly, is because our operational results have improved quite significantly during the second quarter. In the first quarter, we have conducted and completed all the plant maintenance activities, particularly in the Malaysian PSCs. So that was conducted prior to October. And I think Deepak also alluded to 2 wells from -- 2 new infill wells this year, this financial year. But the impact was fully recorded only in Q2 because 1 of them was in August and 1 of them came online in October. So the full impact of these 2 infill wells were recorded in the second quarter. And there are no maintenance. I mean there's nothing, really, one-off adverse activities from an operational perspective. From a PAT perspective, there is a little bit lower profit margin compared to last quarter. Now that's despite EBITDA margin being consistent. That's really because in tandem with the higher production levels, particularly in Kinabalu and PM3 the depreciation and amortization of our noncurrent assets have also increased. So noncash in nature. And hence, there is this drop -- decline in PAT margin compared to the EBITDA margin. On the tax front, no surprises to highlight this quarter. Okay. So the next page. Now this one compares by asset or by cluster of assets. The selling price, the OpEx per barrel or per BOE, net OpEx per barrel or per BOE and the EBITDA margin for each quarter from 1Q FY '23 -- from the last financial year onwards. And what we can see is this. Since we acquired the Peninsula group of assets, our profit margin has always exceeded 50% EBITDA margin, has always exceeded 50% regardless of where the oil price is. And we have always been able to maintain the operations to a good extent because of the scale of that cost of assets. They are big enough to actually sustain all the -- any adverse operation or activities. North Sabah, quite similar. We have been achieving almost always above 40% in the past 6 quarters. And in Anasuria, I think, as we all know, Anasuria is a bit more, what you call that, a bit more -- it is -- it is not fluid, so when the oil prices go higher, the profit -- our profit margin will be also quite -- will increase more sharply. And hence, you can see that our EBITDA margin can go up to 60% to 70% in the past. And this quarter, because of some additional costs incurred for some health and safety-related activities, it was close to 15%. So in all, very profitable quarter across all clusters. So then that brings us to the balance sheet highlights. So another good quarter, obviously. And that brings our shareholders' funds to be about MYR 2.9 billion, slightly increased from the last quarter and also from 2023 because of the positive contribution from all of our groups using FX. You will see that there is a debt. I think we've highlighted this before this term loan that we have undertaken. But the balances are reducing, and we are making -- the repayments have been made as per schedule. And that resulted in a net cash position to the group of close to MYR 500 million as of December 31, 2023. Okay. So that's a healthy cash position, actually, and that allows us to support our capital expenditure programs internally. And if we find any right opportunities, then it also allows us to partake in those. Okay. I think that's it, the next section would be by Ken.

Good evening, everyone. Thank you very much for joining us. Sorry, I'm a bit late joining this, but straight into the detail, but to present all the good news. So yes. So I think just to kind of talk a little bit about what we are expecting to deliver this year. I think generally, you would have seen from the results at the moment, things going a little bit slow. We are on track to deliver on our guidance for production. We gave guidance that we would be somewhere in the range of 7.5 million to 7.8 million barrels of oil equivalent for the year, the financial year. That is up from 7.1 million barrels of oil equivalent that we delivered last year. At this point in time, as we see it, we hope we will get somewhere in the range towards the higher side of that guidance, probably around the 7.7 mark is what we are targeting at this point in time. But all the same, an improvement on last year. In terms of CapEx. Also, we've got projects in North Sabah, Kinabalu. We are funded for this CapEx. The number looks a little bit scary, but important to say that we are funded and all of these projects hopefully will be delivering some increases in production, and we'll see that next year. So it looks a large number, but the important thing is we will not have to do any kind of equity raise to fund this CapEx. It all will be from internal funds. Dividends, we have given guidance again, MYR 0.075 per share on the consolidated share basis. So -- and hopefully, that is going to -- it's a 20% increase from last year, financial year 2023. So hopefully, if oil prices stay strong, this next year, we will look at something a bit even more aggressive. But for now, this is the guidance we are able to provide. The following slide, we're just giving some granularity on our production schedule, so that you can work on your models. Just kind of seeing exactly where the production is coming from, whether it's oil or gas. And already, we also are disclosing here what has actually been already delivered for January, the month of January, that's already been delivered. And you will be able to see how we build up that number of 7.7 million barrels in the last column there in yellow. That 7.7 million barrels, how it's being built up over the next few quarters. What we try to do, and we are not super successful all the time on it, but we try not to have too many offtakes. This is when we sell the cargoes of oil in the same week, in the same month. Because then sometimes, as the oil price moves, we might expose ourselves to a little bit more volatility. So what we try to do is we are trying to smooth it out for the year. So that's the kind of agenda that we have. But we've also done on this chart, I'm not going into every cell -- every number in every cell. But the important thing is the team has given a breakdown of what are oil deliveries and what are gas deliveries. The 7.7 million barrels, how much of it is oil. So you can then compute an oil revenue from that, and you can also compute the gas revenue, you have the breakdown. So hopefully, you'll find that helpful and you'll find this chart useful I think. In terms of growth, we are always prospecting the market, looking to help us achieve our 2026 target of 35,000 to 50,000 barrels of oil equivalent per day. That's going to be more than double where we are today. So to get to somewhere in the midpoint range, we will have to double our production. So we are always looking for an acquisition. Production. Organic growth production will only take us a certain amount of the way. So we are going to also be all the time looking for some kind of attractive assets to buy. And there are some processes ongoing around the region, and all of them are of interest to us. So we keep looking. But it's not about getting an asset, it's about getting the right asset at the right price for us. It's got to be in the right phase of its own life cycle for us to be able to add value and make an impact. So it's important for us. Important projects for next year will be Teal West to deliver some production. And also the SF30 Water Flood, a lot of CapEx is being committed to these projects. So they will have to deliver the numbers in terms of production, but it will not get us to our target. So somewhere along the line, over the next -- between now and 2026, we will have to try to close. And it's not going to be 1 deal that brings the silver bullet, it may have to be a couple of deals that take us there. So the team is working hard, scanning the various opportunities to see whether they would work for us. And it's also nice that we have some unused facilities in terms of funding. So when we go in to buy assets, we are not telling the vendor, it's subject to some funding process. We are able to make some pretty bold statements about being funded to do something. So that's also pretty good thing. I think then on the last slide. We are trying to -- we are working on all fronts. The growth strategy, very, very important, very, very clear across the company. Everybody is aligned towards this, a singular mission to double production by 2026. We are backed by a lot of development opportunities within the company. But at the same time, because there are acquisition opportunities, we are also looking at those. We have been doing some nice work on the operations. So you can see the production is increasing. We have also caught up a lot of the maintenance. You can see some of the unit production costs have increased. We've had to catch up on a lot of maintenance that was deferred from the COVID period. I think we are just about got there now. So I think hopefully, we will be able to keep our unit production costs at these levels and keep the integrity of the assets high and the uptimes high as well. In terms of capital, the cash flow statement, the balance sheet are telling reasonably good story. Cash balance is reasonably strong. The cash flow quite strong. And we've got some unutilized facilities and the facilities that we have utilized as well, not a huge gearing ratio at this point in time. So we're quite comfortable with that. We are working -- we have kept a continuous flow of dividends since we started paying dividends, so we will try to keep that going for 2024. Like I said, we have provided some guidance on where we will be for financial year 2024. And yes, the valuation is the only thing disappointing. We feel it needs to -- we need to work hard in trying to improve it against our peers. There seems to be a lot of -- and compared against our peers, a lot of opportunity for upside. So that's for you to do your work. We can only do our work, and we hope that there will be some interest in the market. There's also one more thing that seems to be happening in the market right now, and that is I think there is, irrespective of all the ESG and climate change activism and all of that, people are now beginning to understand that oil and gas is an important part of the energy mix. It's becoming -- and more and more prominent people are saying -- making more and more bold statements about this. So I think that's very important. So hopefully, there is -- and you can see, I mean, Warren Buffet keeps increasing his stake in the oil companies. He keeps doing it. The big mergers that you see in the U.S. I mean why are these big mergers happening? Because they want to have the scale to be able to be extremely competitive in this market and build things in a consolidated way, consolidated strategies. And another reason why it's happening is because of the security risk in the Middle East. I think the Western world wants to have a secure source of energy, and they want to know where it's going to come from. So I think that's also important. Interesting to see that in the last 2 weeks, Germany committed to a huge 10 gigawatts of power electricity supply coming from combined gas turbines, gas generation and 10 gigawatts, okay? So this is a country that was committed to renewables, completely decommissioned its nuclear facilities and now going back to gas turbines. And you must ask yourself, 10 gigawatts of electricity from gas turbines? Where is the gas coming from? And they are building now even the LNG import terminals to accept -- to receive that gas. So they need reception centers for the gas, so it's going to come from somewhere to be imported. So -- and there's going to be demand. So I think surely over the next, I would say, 10 years, our industry, we believe, will still be strong. So I think with that we can conclude the presentations and hopefully all the others are ready to take your questions.

So I think there are 3 questions from Jean Paul from The Time Sites. The first one is, over the medium term, it seems that the growth will come from many infills and some new blocks. Are there existing tranches that are attractive on the radar for the team? What will be the size of organization that's comfortable for Hibiscus without an equity raise for it?

Okay. So I think I'll do this together with Pascal and Deepak probably, and so please chime in, okay? But I think long and short is, as I said, we are -- the target has been set for us 35,000 to 50,000 barrels of oil equivalent per day by 2026. Within our own portfolio, we will probably get to somewhere in the range of, what, 28,000 to 30,000 barrels of oil equivalent a day if we do all our development activities by that time. So there's going to be a gap to close. We are determined to close that gap and meet our objectives. And therefore, at some point, we will make some acquisitions. The process, we are looking all the time, and there are processes ongoing in different parts of the region right now, but not to say we're in it or whatever, but we are definitely interested to participate. And what has always been important for us is to get the right asset at the right price and at the right time because right price and right time come together. Okay. Right price, right time, important because you can't pay at the peak of the oil prices and all of that kind of stuff. So it's got to be a reasonable transaction. So I guess the answer is yes, we are looking at acquisitions all the time. Yes.

Is there a size of acquisition that's comfortable for Hibiscus without NPAs?

There is. Well, I mean, we know what we are trying to achieve in terms of a target. We're trying to close a gap of about 10 barrels of oil equivalent per day, actually. That's what we're trying to do. So I think let's start with what is the objective. And if it's a good transaction, it should be reasonably debt fundable. I think we can still find money from the market for debt. So it's got to be reasonably debt fundable. And I think it's in everybody's interest, including some of the management here, not to have too much dilution.

And the second question is, is the management satisfied with the reserve replenishment activities that's planned over the next 3 to 5 years?

I mean for the first time -- a long time for actually drilling exploration as we're actively seeking for new resources to add to our portfolio. If you remember, that's how we started as the company. That's essentially exploration. Now I'll hand it back to our [indiscernible]. Besides that, of course, the development activities. Now we're actively developing the SF30 Water Flood which is going to have significant amount of barrels, and we have additional developments in the PM3 area as well. So in terms of activities, it's actually quite a high level compared to where we were before. So in terms of resources, I think we are back to develop over the next 5 to 7 years.

Okay. And the third question is, will share buyback continue throughout FY '24 and FY '25 at these prices?

We have certain prices that we are thinking about and there are opportunities too. And we have set aside budget for this financial year and we will continue to monitor our share price and when we need [indiscernible] . So I hope that answered your question. .

[indiscernible] raised his hand.

[indiscernible] do you want to unmute yourself and take your question?

Just a quick follow-up on the exploration. So going forward, should we expect more exploration? And will it only be done under the cost kind of sharing mechanism? Or would we also be open to taking up all, I guess, underwriting the expenses ourselves?

Yes. So I think that's a good observation because the exploration work we are doing now, we drill the Bunga Lavatera well last year under Hibiscus Malaysia, and it came in above expectations and it was immediately put into production. It was planned in such a way that it immediately was tied into the production network and started producing right away. So that was a very successful well. It's been a subject even of a case study for Petronas. They bring it up a few times now. And now we are working on the North Sabah near-field exploration opportunities. This one will not be tight, if it's successful and the results are good, then we will not be able to tie these in right away. They will need further work. And that -- those studies and all these things, we will have to do them in due course and make the announcements. But next year, there is the Bunga Aster well in Peninsular Malaysia -- sorry, this year. I'm still thinking about 2023. Next month, we're going to be drilling Bunga Aster. So that's another exploration opportunity. All of these wells that we have drilled from last year to this year, all cost recover build. So we've kind of worked very hard to get them all in the cost recovery bucket. So our exposure is limited, okay? Now regarding real kind of rank exploration opportunities where we take up new blocks and do some exploration. That will only happen if we fall into blocks where we feel that there's going to be really a high chance of success or there are going to be tieback opportunities to infrastructure, which is already nearby and which maybe we are operating. I think that could potentially be a scenario. We have to think about that maybe in the midterm. I wouldn't say it's something we're going to do tomorrow, but we will think about that in the midterm. As our financial foundation gets stronger, we will be able to do that. But it is clear that it's not at these oil prices you're not going to be able to get easier opportunities. We are going to have to step out a little bit of our comfort zone and to take a little bit of near-field exploration, something like what we are doing in North Sabah. It's clear because oil prices are at $75, $80, everybody is thinking, let's hold on to them and generate some cash. So unless you are willing to step out a little bit and do a little bit of exploration to really advance value, it's difficult to image to buy an asset and to recover enough money to make that acquisition quite viable and become a good option. Okay.

And regarding the U.K., I think there's 5 -- what is it called, there were 5 blocks, right? Any update to your results or resources?

Yes. So the blocks that we have -- the Crown license adds to our contingent resources. But Kildrummy block will add to our resources. So yes, they are adding to our resources.

Okay. But it's not there yet, right, in the update.

We have not put the numbers yet because we need to do some technical work. But there are wells been drilled and discoveries made, and our gut feel is that they will add to the consolidated volumes of the Marigold area to make it a more exciting area to kind of invest in.

Okay. Great. And last question for me is regarding this exploration wells. Time can be a bit cheeky here. But you've drilled 2 nearly or, I guess, almost 3. Wouldn't you have early some sort of data on like the flow rate? Like would you already know if it's interesting or not at this point?

Yes and no. We -- I mean you have to do the technical work. The partners have to agree. And then when you come out, it's not us, it's ourselves, the partner and also the regulator, all have to agree that the technical work is sound, and this is the answer. We are not quite there yet. Let's just say that for now.

Howie from Manulife, you have a question?

Okay. Can management talk about the progress of extension of PM3 CAA? Is there some KPI in order to get the attention?

Yes. So this is actively ongoing at the moment. We recently in January, we had essentially regulatory review with both Petronas and PetroVietnam. And all parties agree that the aim is have PM3 CAA, to actually get the principal agreement in place by this year. We set an internal target to try and achieve this faster than end of the year. But it's out of our hands. We know exactly where we want to be, but we've also kind of set the bar to the point where everybody understands that the longer it takes to get the principal agreement in place, the longer --essentially developments will be deferred, which will cause the drop in the production. So it's in nobody's interest. I think all parties are now working quite diligently trying to reach a point where we can sign that agreement.

I hope that answers your question, Howie. From Trident Analytics, there's a question. What is the one thing that can keep the management awake at night?

Firstly, are we sleepy?

So what keeps you awake. We've got to make sure that everybody is always focusing every day on health and safety.

John, do you want to unmute yourself?

Perhaps this is a question directed to Dr. Ken and Dr. Pascal. I like the observation that Dr. Ken mentioned about going beyond what is the comfortable risk. I'd just like to get your thoughts on perhaps geopolitical risks around the region in terms if there were big blocks available, let's say, Vietnam or whatever, in terms of your missed assessment to take on those blocks, how does geopolitical risks actually take into account? Vietnam is just an example, but when you guys look at blocks that are in existing brownfield, maybe not so prolific, will geopolitical tensions actually play a vital role in deciding and determining whether that's a good price?

Yes. It always does. 2 things, actually. One, geopolitical risk and the other is legal regulatory risk, how stable is the legal framework in the country. In case something goes wrong, is there a decent court system in the country. First, at that level, we look at it. And then obviously, on a regional level, we do look at a few things. We look at, I would say, apart from the regulatory list, we are looking at regional geopolitical risk like all the stuff that you talk about. We don't want to ever get into a position where we have to call force majeure on something. We don't -- we want to try and avoid that, so all of that. We also look at long term, I would say, decommissioning rules. Because if we go in for something that is going to be 10 years down the road, we've got to clean it up, we got to also look at what are the risks associated with that. But what are the expectations of the government? When you come to clean up and all of it, what levels of decommissioning do they want? So we look, there are several factors that kind of govern our decision to invest in a particular area. And the final one, I would say, is this, which is a consideration. What happens if all goes wrong? So we look at it and say what happens when all goes wrong and you have to write it off? Would the company be able to still survive on the other assets that we have? So we look at it from that perspective, okay? So I would say there are several layers that we look at it. But if we had to write off an asset because of some geopolitical thing that comes up there or whatever, would the company be able to kind of still stand on its feet? So these are -- these are -- these are some of the factors that kind of we think about when we are going into a particular asset. So sometimes you have very attractive opportunities, but they just don't fit into those -- into that framework for us for one reason or the other.

Just in our commitment to transparency. Going forward, we will be releasing the quarterly webcast i.e., the recording of this briefing on our website the day after the briefing. So for this quarter, that will be tomorrow. I decided to keep this under wraps until after the briefing just in case some of you are tempted to slip away or leave and catch up on the recording later. But thank you once again for being here. If you have any questions, feel free to reach out to us or via JPR, and take care and stay safe. Bye-bye.