Hibiscus Petroleum Berhad (HIBISCS) Earnings Call Transcript & Summary

[ Good evening ], everyone, and thank you for joining us today for our quarter 1 financial year 2025 analysts and fund managers [ brief ]. I'm Lily Ling, VP of Corporate Development, and I have with me here Dr. Kenneth Pereira, our Managing Director.

Hi, everyone. Good evening.

[ Deepak Thakur ], our VP of Economics and Business Planning.

Hello.

Chee Yip, our CFO; Joyce Vasudevan, [indiscernible] Finance; and from my team there's Andrew Fernandes; Adila Alias; and also [indiscernible]. So earlier today, we released our results, and you will find you'll probably be able to access 2 of our key resources on our website, the first one being the corporate business update, which details out our operational and financial performance and also this [ briefing ] slide, which we'll also put in this Zoom chat for your access. I think I'll hand over to Ken to start with the presentation. Over to you, Ken.

Thanks, Lily. Yes, we're going to make reference to some slides which are on our website, and we're going to just do something a little bit different this quarter because of the election of President-elect Donald Trump, and there's been a lot written about how this election is going to impact the oil and gas industry. And for some reason, most people seem to correlate his election to reduction in oil prices over the next few years. We seem to have a slightly different view. We'll try and present some of our points in these next few slides. So this time, as part of our presentation, we're just doing a short macro oil and gas industry outlook under the Trump 2.0 regime. And you can draw your own conclusions why we are saying what we are saying. And just to reiterate, these slides are available on our website, okay? So I think Trump -- President Donald Trump -- elect Donald Trump has said that he would like to see more oil wells drilled -- this famous phrase, "Drill, baby, drill." But when we read the reports of the analysts who know this area well, particularly the U.S. shale fields, oil and gas fields, what we are understanding is actually, while they need to drill, they need to drill more wells to keep production where it is, mostly because it is, one, production is very high. They are now at -- the U.S. has never been producing as much oil as it is now. The wells they are drilling, they are in secondary locations, I would say, secondary quality locations. In the last decade, they have been producing shale from some of the primary oilfields, oil -- shale fields in the U.S. Now they are on what they call Tier 2 opportunities. And the Tier 2 opportunities, one, less oil, and they have -- and shale is generally about 2 to 3 years a well. These wells are producing for even shorter production cycles, so maybe an 18-months-type cycle. So the wells are not as high quality as before and also not as long as before. They produce for a shorter period. So in order to make all of this work, the shale oil and gas drillers need about $55 oil price, so -- as a minimum. So you'd think that most likely their breakeven -- if their breakeven is $55, then they're going to need something above that to continue doing this work. So we think $70 to $80 is the right place. Another reason is because in the U.S., $80 oil price equates to something like $2 a gallon gasoline price for cars. And generally, this has been seen as an acceptable palatable level for drivers in the U.S. to -- they accept it and they don't consider it very inflationary if it's just below $80 and ends up at $2 gasoline price. So we think because of these reasons, oil prices are in the range -- will be in the range $70 to $80 with sporadic spikes or dips when there are -- when there might be certain security concerns, geopolitical issues, et cetera. But otherwise, the average would be around $70 to $80, and this would be the benchmark prices. This has been our expectation for a while. You will recall that during our industry briefing, our Capital Markets Day, our investor presentation day, we ended up giving guidance for dividends between $70 and $80. At $70, we were saying something like MYR 0.08 per share for financial year 2025 and MYR 0.10 per share if oil prices went to $80, so $70 would result in MYR0.08 and $80 would be MYR 0.10. And we picked those numbers because we basically felt the oil price would be in that range, and we don't think any different now, okay? There are some other macro reasons why we think -- there's been a lot talked about tariffs being imposed in China. We think there will be a balance. I don't think there's going to be some kind of trade war. We don't think so. It's -- as you can see what happened in the G20 Summit, conversation between the Chinese and the Americans was talking more about keeping global -- the global economies as stable as possible. And of course, we -- there is also -- we think there will also be growth in the U.S. economy. One thing when Donald Trump is in as President, things will be business friendly. So he will be looking at how the economy can grow. And generally when an economy grows, it generally means more energy requirement. So just to say that. One of the other things is because of his views on ESG, I think more people are going to be emboldened to go down the route of oil and gas consumption and maybe there will be less expenditure on the renewables side. So also that could increase dependency on fossil fuels. So these are just a few points that we wanted to kind of bring to your attention. Just a few more charts. This chart is a very interesting chart. It's an OPEC long-term global oil demand forecast. And what we've done here is we have transposed their forecasts over the last 3 years. And what you can see is, actually, even though there is more and more narrative about the green and renewable discussions and all of it, but actually what OPEC has been doing since 2022, 2023 and now 2024, actually their forecast is getting more and more bullish actually. In 2022, they were saying -- they kind of put out a forecast there for [ 2045 ] that took oil demand up to about 110 million barrels a day. By 2023, that had increased to 115 million, and now in 2024, they have increased even further to 120 million. So I think what we are seeing here is actually strengthening oil demand actually. That's really what OPEC is saying. And when you think about it, these are the people who have been in the business the longest time doing these forecasts. And so there must be a certain level of credibility in all of this, actually. The other points are, if you look at how they see it, they're seeing OECD countries' general consumption per capita is about 11 barrels per person actually. And that far exceeds what is current per capita consumption in China, India, Africa. There, you're sitting -- and the populations of these countries are very large -- there, you're talking about 3 to 4 barrels per person of oil per capita actually. So you -- and this is we're talking per year, yes. So you can imagine that if India, China, Africa demand even just increases 20%, 30%, heading from 4% to 11%, you can imagine the type of demand you're going to see in the oil and gas markets. In Norway, we -- and in certain areas, in certain countries in Europe, what we are also seeing is that even though there's so much talk about EVs and all these electric vehicles and adoption rates are very high -- Norway nearly 100% EV, everybody is driving an EV -- but oil and gas production and demand still remains very high also, at 200,000 barrels per day. It seems that the production is not dropping, even though EV adoption is high. And of course, we've all heard about energy demand with increasing dependency on AI, data centers and things like that. So just to kind of give you an idea, a few more points. Next slide, please. This is just a view. This is what happened, it's some historical data. What happened in 2015 -- 2014, 2015 when the -- Saudi Arabia decided to try and capture more market share by dropping prices substantially and to try and take on the shale players of the U.S. This is what happened to the Saudi Arabian government budget 2010 to 2018. They went into deficit actually. From being a surplus budget prior to 2014, once they started engaging in oil prices -- oil price wars, serious destruction in value, and you can see what happened to their budgets. So went into deficit, and actually been in deficit since then actually for many years now, okay? One important point also for the -- just to kind of demonstrate why we do not think Saudi Arabia will go into any kind of price war with the shale producers is because, for the first time, actually Saudi Aramco has gone into a net debt position, okay, so we -- in 2024. So in trying to make all its CapEx payments, its dividend promises -- its dividend commitments to its shareholders, large dividend commitments actually, it has now ended up it's in a net debt position. So this is like the first time ever that has happened to them. So it's also, I think, a sign that they will be cautious when doing anything to try and reduce prices. So we think they are not going to be doing that. We think their view is going to be reduce costs, reduce costs mean -- reducing your production means reducing your cost. And then if you can do that, it also means that when you reduce your production, you're going to potentially increase prices -- oil prices. So we think more advantages for them to actually not be so aggressive with the production. The CapEx and OpEx associated with that production might be better that you reduce your production and still achieve a certain level of cash flow. We think that that is probably the more likely scenario. Next slide, please. This is a very interesting slide. The yellow block there shows what has been conventional oil production for the past 15 years, global oil production last 15 years, okay? So it's like sitting flat at 80 million barrels a day kind of thing. And then what you see in red is what -- is how demand has been -- how supply, sorry, has been delivered by the shale producers to meet demand, okay? So demand sitting at around 100 million barrels a day, slightly more than 100 million barrels a day, but really, we have to thank the U.S. shale producers for making that demand, because the conventional oil producers are only able to deliver about 80% of demand at this point in time. So if shale does not keep up with its secondary, I would say, it's Tier 2 wells, okay, which produce less and which produce for shorter periods, shorter time, then you are going to see a shortfall. But basically, the world today is depending very, very highly on what comes from the shale producers, just looking at this chart. So then you then know why, on the picture on the right-hand side, why Trump actually slightly changed his tune from "Drill, baby, drill," to "Give coal a chance." This appeared in The Australian paper, The Australian two days ago, front page, basically because he is beginning to now understand that even though the shale producers are doing a lot, they are not going to be able to do that much more. So drilling as many wells and all of that will not maybe increase the -- will unlikely increase shale production even more. So there is going to be a supply shortfall actually. So he is now thinking, okay, if I want to have cheap electricity costs in the U.S., I have to also think about coal, and I have to kind of manage public perception on coal. So he is now -- it's not "Drill, baby, drill" anymore, but "Give coal a chance," actually. So -- and he is now talking about energy security. He's not talking about bringing industry back to the U.S. and all of it, he's talking about something else. So I think he has brought in a very, very knowledgeable energy secretary, he's from the industry, Chris Wright. And basically, I think he's getting briefed that what is feasible, what is real and what is pre-election talk. And now you have to deliver as the President. You can see the messaging is already starting to change, okay? Yes. So this also is a very interesting chart. All of these charts are available on our website, okay, so you're welcome to it. But it shows you how renewables have kind of been slowly developing as a potential primary energy source since 2004, so last 20 years, 2 decades. Over those 2 decades, $6.3 trillion have been invested in renewables, but they cannot keep up with what is energy -- what is demand actually, okay? So very interesting just to see how energy demand has been increasing -- consumption has been increasing. Renewables only coming in to supply a very small portion of that. And it's not just been a long-term trend, it's also -- over the last 2 years, 2022 to 2023, you see the note we have made in the blue box there on the chart, basically between 2022 and 2023, our primary energy consumption increased by 2%. The 2% is equivalent to 12 exajoules, okay? So world is using about 600 exajoules, so about this -- in 2022, it was about 600 exajoules, by 2023, it was 612 exajoules, E-X-A joules, okay, exajoules, very large numbers. And that 12 exajoules increase between '22 and '23, even though these were like post [ cost ], with all the COP efforts and all the renewable investments, et cetera, renewables only came in for 37% of the increase in demand. So that increase in demand of 12 exajoules mostly fulfilled by fossil fuels, actually, 63% fulfilled by fossil fuels and 37% by renewables. So basically, even though a lot of investment, a lot of rhetoric about renewables, what is happening is, where rubber hits the road, where -- when you need energy, what is coming to the fore as the solution is actually fossil fuels. That's what's happening here in this day and age. And I think what you can also say is, going forward [ on this front ], I don't know whether the motivation to keep going with renewables is going to be as strong, at least over the next 4 years, because he seems to be taking the world in a different direction, okay? I think same message in these 2 slides. The slide on the left hand side, on your left, actually just shows the supply shortfall that we foresee in oil production if the world achieves certain temperature targets by 2050. In the best case, in the best case for energy transition, the temperature increase of only 1.6 degrees is achieved, and that means that there is a huge proliferation of renewable energy projects and we need less fossil fuels, but even then, you can see the gap between what is going to be supplied by projects we know that are sanctioned and what needs to be supplied. If you go down the yellow pathway, that's a likely case of trying to keep temperatures below 2 degrees, then you're looking at a situation where the world is short of 550 billion barrels of oil to be sanctioned. And I can tell you, nobody is funding this. You don't have visibility on such large numbers, actually, okay? If you look at what -- ExxonMobil, they just celebrated in Guyana production of 500 million barrels over the last 8 years, in something like last 8 or 9 years. It's taken them 8 or 9 years to produce 500 million barrels. Here we are talking about 550 billion barrels to be -- to be discovered, sanctioned and put into production. So [ it shows you ] the scope and -- of the investment and the size of the task ahead, okay? So serious shortfalls what we see. Same on the right-hand side with gas, actually, gas supply, also an undersupply in certain temperature -- if you achieve certain temperature targets. So in every case, the most likely case shows that there is going to be serious shortages of oil and gas, actually. So we think oil prices are more likely to have an upside potential than a downside potential, okay? CY is going to help me now with some slides.

Thank you, Ken. For the next 2 pages, I will go through some of the key events that drove the numbers that you have just seen in the QR. So firstly, I think something you have noticed throughout our commentaries that during this quarter ended the 30th September, there have been a lot of activities and amount incurred -- amounts incurred for the planned maintenance activities across all of the asset base. So firstly, in PM3 CAA, we undertook this major maintenance ramp for calendar year 2025 in the second half of August, and that was completed by the end of August 2024. In Kinabalu, in the previous quarter, started the campaign towards the end of June, and that carried through to this quarter, when we -- when it was completed on the 5th of July. And in addition to that, in Kinabalu, we did also face some inefficiencies in production or some drop in production because of a delay experienced or encountered when we started the high-pressure compressor after the campaign was completed. In North Sabah, however, the planned maintenance program was completed in the previous quarter. But this particular quarter, we had a few days' interruption in the platform, had to shut it down for about 8 days to cater for direct entry into the SF30 field because of bad weather conditions. And in Anasuria cluster, something we have not done last year, but this is the turnaround that we conducted on the Anasuria FPSO. This is something we do every 2 years. And this was carried out between early August to the second week of September. So it took us about 38 days. Now all this combined, obviously, would have an impact on production. And you will see that the production rates across all asset base in the current quarter have dropped by about 17% compared to Q4, compared to June. In the same way, OpEx per BOE has increased by almost the same percentage, from USD 32.8 BOE per day to USD 39. So this is something that has been undertaken throughout the entire quarter this [ time ]. Now one thing you have noticed also is the trend between the ringgit Malaysia versus U.S. dollars. Last time around, when we spoke on 30th June 2024, U.S. dollar was almost at an all-time high. It was about MYR 4.73. So that was the closing rate on 30th of June '24. Now as of 30 September, however, that dropped to MYR 4.12. So fairly significant. And that has a direct impact on how we value certain balances that are not denominated in Malaysian ringgit. I mean, we report in RM, but they are -- as you know, we have a lot of balances that are not in RM, and that has resulted in an unrealized forex of MYR 20-odd million -- about MYR 20 million pretax, of about MYR 11 million post tax. Now that is something that we have to pick up. But as you know, at this current moment, the rate has improved, or rather U.S. dollars have gone up again. Right now, we are sitting at about MYR 4.5. Now the reverse is going to be the case, but I expect [ first ] impact, which is a gain to our P&L and realized ForEx gain when we closed the books in December. So we do expect this current rate to persist actually. You heard of what [indiscernible] Ken mentioned about Trump's policies and all. We do expect this U.S. dollar in at the current rate, if not higher, actually. So you would see some -- you would see a reverse positive impact to our P&L when we close December's books. So oil and gas prices during the quarter, particularly for crude oil, the prices -- the amount of -- the realized price for oil [ sales ] during the quarter has gone down a little bit. Not substantially, I mean, we have realized about $83.6, that's still fairly reasonably high. Certainly it was better the previous quarter, it's down by about 7%, okay? But if you -- that's the correlation between our service rates with oil price. So if the view is that the oil price is a bit suppressed at a lower level, then you would expect over time the service rates to also reduce and that will sort of compensate from a slightly lower oil price environment, okay? So those are the key drivers across the quarter now. How does that impact us? Well, it will be -- I mean we're happy to still report about MYR 76 million worth of PAT. That's in a very challenging quarter where we have planned for a lot of activities to be carried out. Now all of these have been completed. So you would expect a lot or better results to come in from this quarter onwards for the remaining parts of year 2025. Now the other thing to highlight really is that our cash position has gone up significantly compared to June. It was MYR 240 million thereabouts in June. Now we closed at about MYR 425 million. So our earnings capacity from a cash perspective, generation of free cash flow is still strong, very strong. And you know that our group is very focused on ensuring that whatever we do -- I mean, we do spend money, but we do it in a very prudent manner, and that is proven in this cash balance. This augurs well for us, as you will see that we have a lot of plans for certain CapEx program that we have put in place and also due to our next point, dividends. So we have mentioned or we have guided in recent past that if oil price stays -- of Brent stays around $70 to $80 range, we are committed to declare MYR 0.08 of dividend coming in this financial year. Now we have declared 1/4 of that. So MYR 0.02 was declared earlier as part of the Q1 -- the Q1 results. And next point now on share buybacks. I'm sure everybody is aware that we have been buying -- actively buying back our shares in [indiscernible]. Just this quarter alone, we have spent close to [ MYR 40 million ]. That contributed to more than half of what we have done throughout this calendar year. And if you -- from a number of shares perspective, that is about 3.7% of total issued share capital bought back during this calendar year so far, up to 30th September. And we still carry on with that performance momentum after 30th September. After all this -- so what's the impact on production volumes? We have mentioned in the past that we are likely to achieve close to 9 million BOE for this financial year, and that's about 13% higher than FY 2024. So we are still committed to that, and we are confident that we can still attain that. This includes Brunei, of course, and we can be confident because, at this stage, despite all those interruptions to production because of planned activities have stopped, our current production has crept up back up to where we expect it to be, which is about 28,000 BOE per day, okay? So now the next section, well, we are going to highlight some of the key metrics compared to last quarter. So firstly, average realized prices for our sale of oil, condensate and gas, they are down between 6.7% to 13% compared to last quarter. Production rate, as [ touched on ] earlier, that came down because of all these planned activities. And accordingly, sales have also gone down by about 20%, from MYR 2.1 billion in the past quarter to about MYR 1.7 billion for September. The next page is a summary of our P&L, really the key items, revenue, EBITDA and PAT. Revenue, again, as mentioned earlier, it was caused by lower selling prices and lower volume of crude oil sold. From an EBITDA perspective, now we have included pretax cited earlier, MYR 20 million worth of unrealized foreign exchange losses, post tax about MYR 11 million, so that drove -- that contributed a lot to a lower EBITDA. At the PAT level, because of low production, we have charged out lower amortization and depreciation, and you will see also that there is -- in the [indiscernible], if you look at the P&L closely, there is also a credit in the tax line. A lot of that credit would have been contributed from the U.K. U.K., we did report a loss before tax because of the shutdown. So the total barrels sold during -- crude oil sold during the quarter was low, fairly, about -- what used to be, we normally attain about 150,000, 160,000, 170,000 barrels in the quarter. This time around, it's just slightly higher than 100,000 barrels. And because of that, our -- and also because of the high cost incurred, so we did report a loss before tax now. When you do that, then obviously there's going to be a tax impact on the reverse -- a reverse tax impact, which is a gain from a deferred tax perspective. So we have recognized that. And on top of that, we also recognized additional investment allowances that will accrue to us because of the amount of CapEx that we are enjoying or are investing in the U.K. So these allowances that we recognized in this quarter would be available for us to knock off against any taxable income that may arise in the U.K. going forward, and also future years actually, if it's not -- if we don't finish that by this quarter -- by this financial year. So that's -- a lot of that came from allowances that would be allowed for us to use, to utilize, to knock off against future taxable income in the U.K. Okay? The next slide we talk about would compare actually our revenue generated -- or gas price attained across all of our producing assets in Malaysia, Vietnam and also in Anasuria in the U.K. against its OpEx per BOE or per barrel. And the gray line will show you the EBITDA percentage. Now if you look at Peninsula, despite challenges that we went through, they have reported close to 60% of EBITDA margin. That's fairly -- that's actually very high given the fact that we have undertaken so much activities during the quarter. But North Sabah, it was around 14%. Anasuria, there is no such line because it was a loss [indiscernible]. So then the next page. Now this is just to, I think, to give some clarity as to how certain balances or key balances in the balance sheet has have dropped compared to the 30th of June. But nothing to be alarmed about, total assets have gone down close to about MYR 780 million. But as you can see in the point highlighted in Point A, there have been -- so when the currency goes down -- most of our assets are denominated -- the [ noncurrent ] assets, oil and gas assets, are denominated in U.S. dollars. And when the currency goes down, there is a need for us to revalue that to ringgit Malaysia, and the corresponding impact actually goes under reserves, not a P&L charge, but it's to other reserves in the [ equity line ]. So that was about MYR 793 million that basically explains almost the entirety of the entire drop in total assets. And same is true for shareholders' funds, MYR 3.1 billion to about MYR 2.7 billion fall, representing about MYR 360 million drop. And again, if you look at Point B, a very high amount of MYR 384 million was taken out because of U.S. dollar impact. Again, the same value has gone to other reserves in the equity line, not the P&L. Okay? And I think the last one that I would like to just highlight is that, again, net cash, from MYR 238 million that I mentioned earlier, shot up to about MYR 425 million. So puts us in a very good position going into our future months when we have to be -- when we are going to finance a lot of our activities in particularly CapEx, okay? I think the next section, I will ask Deepak to run you through some of the projects that we have in line.

Thank you, CY. Good evening, everyone, and thank you for joining this call. In next 4 slides, we are going to talk about the status of the projects that is executing to help us to increase our production to achieve our [indiscernible] of the production reserves. At the same time, we'll also talk about FY 2025 guidance. Let's start with the projects. So as you know, we completed Brunei transaction from 14th of October, and we have funded this acquisition from our internal cash and the unutilized facilities. On the North Sabah, the team is working on a very important project, which is SF30 Water Flood Phase 2 project, which entails drilling total 11 wells, 5 oil producers and 6 water injector wells. We already achieved first oil from first well, and the remaining oil wells will also be brought to production. And we expect the drilling of all the wells to be over sometime by March, April 2025, and start injecting water from sometime in June, July 2025. So we are on track on this project. Now let's move on to our Teal West development under the Anasuria cluster. So the team is working very hard. We expect to drill well sometime in Q2, Q3, calendar year 2025, to have the first oil production from November 2025. Okay. Let's go to the next slide, please. Okay. Now let's talk about the growth contribution from the acquisition which we completed in Brunei. So in terms of the production numbers, this particular asset [indiscernible] to Hibiscus is producing roughly about 8,000 barrels of oil equivalent a day. So the numbers which CY talked about was 16,000 barrels of oil equivalent, but they didn't include these gray numbers. So actual numbers for October month, including the Brunei, is about 28,000 barrels of oil equivalent per day. So you could see that it's a significant increase -- a significant contribution in terms of production and also the reserves numbers for the group, roughly about 34%, 35% increase in the production results from the Brunei asset. On the -- this was on the left side. On the right-hand side, we are showing what this transaction could give us in future as a future upside from our venture into the Brunei. So if you look at Brunei as a country, oil and gas contributes significantly to their GDP. And based on their current resources, they are going to produce for next 30 years. And who are the companies who are operating or producing oil and gas in Brunei? There are 3 companies: Shell, Hibiscus and Brunei Energy. Brunei Energy is their own oil and gas company. So we think we will have ample opportunity, we'll have a lot more opportunity to grow our portfolio in Brunei via acquiring assets from Shell or also from new licenses from the Brunei government. So we think this is just a stepping stone [ to our ] -- grow our portfolio in Brunei. Let's go to the next one. FY 2025 guidance. So let's look at it. It starts with the shutdowns. As CY mentioned, majority of our planned shutdowns have already been concluded, completed in quarter 1. Kinabalu and North Sabah, for [ 2 ] days will be [ down ] in quarter 4 FY 2025. In terms of the production numbers, so 16,707 barrels of oil equivalent per day was the production for the last quarter, July to September quarter. It didn't include the contribution from Brunei, so as we mentioned just now. So in October, the actual production was 28,000 barrels of oil equivalent per day including Brunei asset. If you look at our next 3 quarters production forecast, what we target for the next 3 quarters, it's roughly about 27,000, 28,000 barrels of oil equivalent, that range. If you look at average for FY 2025, talking about 25,000, 26,000 barrels of oil equivalent per day. On the right-hand side, we are showing the volumes of oil, condensate and gas that we are going to sell or deliver. The volume is 8.6 million to 8.9 million barrels of oil equivalent. Of course, it includes the contribution from the Brunei asset. Out of 8.6 million to 8.9 million barrels of oil equivalent, we have already sold 1.7 million barrels of oil equivalent in quarter 1, and the remaining roughly about 6.9 million to 7.2 million barrels of oil equivalent will be sold over the next 3 quarters. okay. Now let's look at the CapEx and the dividend guidance. So for FY 2025, we are going to spend USD 283 million. This includes the $21 million of the CapEx in Brunei, but the highest capital are being spent on the Teal West and the North Sabah. And all of these CapEx numbers are fully funded from our internal cash and the available facilities and operating cash flow. As you know, we have also come up with the capital allocation framework, which also states very clearly the economic parameters that any projects have to beat before we execute it or report it [indiscernible]. Now let's come to the dividend guidance. So as long as price is about $70 or $70-plus -- $70 per barrel-plus, our minimum dividend guidance is about MYR 0.08 per share. In the event the Brent price goes up and it's about roughly about $80 per barrel or in that range, then we think we will be to -- our dividend guidance would be $0.10 per share. This is very, very attractive dividend yield at current price. Okay? Joyce will take us through a few slides on the [indiscernible] and maintaining balance.

This slide. where we show the valuation multiples of global E&P companies across different jurisdictions, Canada, U.S., Australia, U.K., versus where we're at in [ Malaysia ]. As you know, we are significantly undervalued in terms of valuation [ multiples ]. And what's interesting, what the slide is that what we show is the pricing multiples, the valuation before the presidential election [indiscernible] October 2024 [indiscernible], and then post presidential election, 15 November [indiscernible]. And what you will see is that the investors in these developed markets are thinking more bullish, particularly [indiscernible], especially in Canada oil prices, oil and gas prices, which is why you see that the oil -- the share prices, the PE multiples of Canada and U.S. has actually increased post the election results. Australia and U.K. has remained [indiscernible]. So we all -- which goes to the point that Ken was talking about in terms of the views of oil and gas prices going forward. We do believe that we will continue to be high, between $70 to $80. In terms of our share price performance, as you all know that our counter has been very lackluster, and this is despite the Brunei acquisition delivering much better full year financial year, 30 June 2024 results, undertaking dividends, higher dividends, and as well as shares buyback. And we do believe that a lot of these downward pressures are attributable to short sellers. So we wanted to explain to you the initiatives that we are taking and the key priority is to act in the best interest of shareholders and to ensure that we're able to optimize the shareholder spend, which means we continue to grow volumes and reserves as specified as highlighted by all the initiatives we are doing projects -- the various projects. And we will also continue with share buybacks. We will continue to prioritize the minimum dividend payout in our capital allocation framework. You may remember that under we've specified what is priority spend and what is discretionary spend, and the minimum dividend payouts are actually in the priority spend, which is prioritized even above CapEx. And then third is that we continue to evaluate various proposals which include and are not limited to privatization, mergers and takeovers, anything that is going to increase and optimize shareholder value. Key messages. This is relating to how we intend to continue to create value and also to maintain value. Creating value is all the value-accretive projects we have undertaken, which is the Brunei acquisition, which brings the additional volumes and results from 15 October 2024, because we completed the acquisition on 14th [indiscernible]. And then the [indiscernible] SF30 Water Flood Phase 2 project [indiscernible] October [indiscernible] expected to be completed by February. And then we are also in advanced discussions on our PM3 CAA extension beyond 2027. That is expected to -- that will add additional 2P reserves and 2C resources. And as mentioned by CY, we've completed our major maintenance activities in Q1. We've gotten that over and done. And so we are on track to [indiscernible] strong financial year strong with an increase in volume sales volumes by 10% to 15%. And how we plan to maintain value is to continue with the minimum [ dividend ] guidance. And you know that we've been increasing the dividend year-on-year since our financial year 2021 [ maiden ] dividend. For financial year 2024, the dividend -- we've increased the actual dividend by $0.01 from what was guided of MYR 0.075, MYR 0.085. And then we also announced the financial year 2025 minimum dividend guidance of MYR 0.08 to MYR 0.10 depending on where oil prices are between $70. And then we will also be continuing to share buybacks on an opportunistic basis. And then we will, as mentioned by Deepak, we will continue to institute strict financial discipline, and that's in line with our capital allocation premium [indiscernible] priority and what is discretionary, and if required, [indiscernible] both CapEx and discretionary activities to [ preserve value ] as and when required. And as I mentioned just now, we will continue to explore all options to unlock value for our shareholders.

Just to close off with a few words here, just some highlights. I think the important thing we'd like you to take away is that even though it's been a tough quarter in terms of maintenance activities, in terms of ForEx, ForEx movements, et cetera, which have now bounced back, the company has remained profitable, strong cash flow generation and most importantly, all our production from all assets are back on stream, and we are seeing roughly around 27,000, 28,000 barrels of oil equivalent per day now on a daily basis. We have got and we have done all the major maintenance work we're going to do for this period, giving us a good runway through the monsoon months and winter months in the U.K., hopefully, to keep a good production uptime and deliver some good production. Obviously, the dividend we had committed before, we are delivering now as per what we said. And also just to say the -- overall, we feel that oil prices have more upside than downside actually from where they are now. Those are just kind of our key messages for the quarter.

[Operator Instructions] [ William Teh ] asks: Ken, thanks for sharing the macro view. How does this analysis benefit Hibiscus Petroleum?

I think we are we are generally more bullish than some of the sector reports. Many of the analysts who cover the sector locally as soon as they got a feel of the Trump election results, they felt it was going to be more downside on oil prices because of more production coming onstream. But what we are showing is actually we think there's still going to be supply a tight supply chain in terms of oil and gas production. So I think we are thinking what President-elect Donald Trump has done has taken the focus away from ESG concerns and renewables and all of that and maybe pushed oil and gas to the forefront has been the main source of primary energy now. So we are, I would say, more bullish than bearish about the state of the industry now.

[indiscernible] Yang from [ Z Capital ] is asking: when do we expect to obtain PM3 CAA extension? And how much 2P increase assuming extension is given for standard tenure?

We are very advanced in the approval process, I would say. And we are hoping that late this year or early next year we would be able to deliver the news of an extension. There is going to be some 2P reserves increase when that license is extended. I think better that we put the numbers out when the extension is given as part of a more holistic announcement, but it's very advanced at this point.

Keating from BC Asset Management is asking, CY, can you help me to identify key sources of significant rise in net cash? Also, what does it mean for CapEx schedule, the buyback and you didn't pay out? Will it be higher than currently guided?

So if you look at our previous quarters, I mean, it is -- it origins from our collection of proceeds of oil and gas. So for our revenues of our sale in the previous -- in the recent months. Typically, we collect all these proceeds between 30 to 60 days, and so that is the source of the inflow. But obviously, we have also recognized very healthy GP margins in the previous months, in the previous quarters. And if you put all those together, then the free cash flow from operations are high even after paying tax [indiscernible] recently. So that is a catalyst for a net upside in cash. It comes to dividend, well, our guidance is, between $70 to $80, we will declare MYR 0.08 for the financial year. We still -- we are still committed to do that. But whether we pay more or not depends also on how we land the financial year when it comes to June or maybe even final dividend, which is going to be in October of next year. But it is -- we have -- we are confident that we are able to commit to that with our internal planning rigor. Now we have also mentioned, I think in the Investor Day, that we have -- or we have highlighted to the public that we do have a very robust capital allocation process in place. Now that has taken in consideration a few things: dividend payment, capital expenditure and also for operations [indiscernible]. And so we will continue to do that. And all those CapEx programs that Deepak mentioned and those that we have highlighted in the past, anything that we deem viable and if they are in line for execution, we will be able to do [ necessary ]. Just to note, the drawdown of the facility recently was not for working capital purposes. It was just solely to acquire the Brunei transaction, okay? So it is not actually contributed. So it's all coming from our efficient operations in the past. And these are the things that we do when oil prices are higher, when we don't have maintenance activities like now, we prepare and we preserve those funds. They will put us in a good way when we have more synergy in [indiscernible]. Did I answer all the questions?

Yes.

Share buyback as well, yes. Even after 30th of September, I mentioned earlier today, I think yesterday we bought back, 2 days ago we bought back, today we also did the same. So we have also funds allocated for that. So all those things mentioned, your question actually is important to us, and we have allocated funds for all of that, okay?

[indiscernible]

Okay?

[Operator Instructions] There's another question from Alvin from PhillipCapital: May I know when Brunei acquisition contribute to the earnings? Possibly on -- is it possible to be on track in second quarter or third quarter financial year '25?

We closed the asset -- or we closed the acquisition, we completed the acquisition, rather, on the 14th of October. So when we report the December numbers sometime in the second half of February 2025, you will see 2.5 months of contribution. And on top of that, of course, you have the one-off adjustment coming from purchase price allocation [ exercise is ] ongoing. But yes, 2.5 months of the impact will come in the December quarter.

[indiscernible] asks: Hello, what is the future outlook for Vietnam and Australia?

I think Australia is not an asset that we are putting a lot of effort into now. The cost -- because the cost for production in Australia is very high. Vietnam, we are working only in Vietnam through block, the PM3 block, and working on the extension of PM3 CAA at the moment. That's what we're doing in Vietnam.

[Operator Instructions] Coming from [indiscernible]: Hi, I apologize if this was elaborated before. My thinking is as long as oil prices remain high, your long-term net cash should be quite sizable even after dividends. Let's say, if the world starts to value nonfossil fuel or transition businesses, are you saving the war chest for potential renewable energy acquisition?

Yes. So I think this RE acquisition, as long as it can deliver some positive cash flows in a reasonable payback period, we will look at it. But so far, we have not seen renewable energy projects with paybacks in a reasonable period actually. So if you want to donate some of your dividends to renewable projects, then maybe so. But I think we are in a very cash -- free cash flow generating type of organization. So I think we are more interested in generating free cash flow and looking at what the usual things we can do with that free cash flow, as opposed to planting it into projects that take quite a long time to allow you to recycle some cash?

Because I think he's saying that he's asking this because PETRONAS reports [indiscernible] of Gentari. Not sure if Hibiscus may be keen on account of [indiscernible].

I think you must ask why is PETRONAS selling Gentari. Maybe trying to make some advance returns on it, maybe, yes.

[indiscernible] is asking: can management update on the new offshore exploration target in North Sabah?

[indiscernible] I know we took a [ write-down ]. We took a [ write-down ] on 2 of the wells. And [Foreign Language].

And we also wrote off SF Merah. SF Ungu main, the studies with the regulator is ongoing. So we do not yet have a conclusive view of that well. And once we have that, there will be a decision on what to do next. But the study is ongoing -- after the samples have been collected.

Did that answer your question, [ Tavy ]? What's your OpEx per barrel -- change?

[indiscernible] slightly. But I mean, if you take the view that it's going to remain at $70, then it should drop.

Yes, it should drop as well.

Question, I think just a question -- so just to say, I think the market has got to take a view on what you believe, actually. If you believe that oil prices are going to be $70 and sub-$70, you cannot expect that oil company -- service company rates are going to be high. You have to take that view. If oil prices are going to be depressed, service rates are going to be depressed, okay? And the so-called -- all these big contracts -- the weekend, I saw the edge front page, oil and gas, billions of dollars of contracts being awarded, et cetera, you can imagine that none of this -- if you believe that oil and gas -- oil prices are going to be low, then you can't take a bullish view on the service rates and the service company performance. So I think it's important for the analysts and the fund managers to kind of develop a consistent position. If you take a view that oil prices are low, then you can't have high service company rates. If you take a view that oil prices are going to be reasonable, $70 to $80 is a good price, then you can say that service company rates are going to be reasonable also. So I think these have historically shown to move in tandem. So it's another reason why sometimes we can't understand why service companies have PE ratios of 10 and 12 and 15 and 16 and oil companies have lower PE ratios like ourselves at 4 and all that. So I think you've got to kind of take a view on this, and we -- for us, we don't kind of make sense of it, actually.

Yes. I think [indiscernible] here agrees with you. In fact, jobs and demand in oil and gas industry is bearish, I heard, because of the PETRONAS Sarawak episode and Shell also wanting to cut the manpower.

I think all of that is good because if they are going to have all of these bearish sentiments, then it just says that there are opportunities in the industry actually for everybody. So I think these will get resolved at some point. I don't know about Shell wanting to cut manpower here. But as far as we are concerned, we are just happy to do -- our work is very clear. Our scope is very clear. It's within the licenses that we have, and that's just all the stuff that's going on outside our universe not really of concern too much to us, actually. We're just going to do our job.

Thank you for your time and attention today. We wish -- we would like -- we really appreciate your continued interest and also support on Hibiscus. If you have any questions or follow-up questions or even any -- you need further information, feel free to reach out to us. Have a great evening.

Yes, just to say, our share prices are, I would say, extremely low, and you should take this opportunity really. We have got most of our maintenance work done, cash flows are strong, performance relatively good considering the fact that we have done all this maintenance for the next few quarters, okay?