Hibiscus plummeted 0.14 sen (12.17%) on last Friday after the release of 4th quarter report
I grabbed the opportunity to add more as it was obviously oversold
I could think of several reasons why Hibiscus is dumpped
All investors are expecting Hibiscus to deliver a spectacular quarter result following the acquisition of PSC Sabah, in fact, the negative goodwill jack up profit again, there was no oil sold from Anasuria, higher expenses and higher tax, which in turn disappointing the investors, and cause the panic selling.
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| Profit of 98.7m is largely driven by a negative goodwill |
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| no oil sold by Anasuria |
Do bear in mind, although there was no oil sold by Anasuria in this quarter, 15.8m tax charged because of tax regime in UK
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Why I chose to add more?
Over the past two years, it has been the practice of the Company to conduct at least one cargo offtake on a quarterly basis. In the Current Quarter, the Company did not conduct a crude oil offtake. The offtake was deferred to 2 July 2018 to ensure the overall safety and smooth running of operations whilst the drilling of the GUA-P2 side track well was ongoing. As of the date of this report, the Company has successfully completed two crude oil offtakes (524,432 bbls) for the financial quarter ending 30 September 2018 (“1Q 19”). This is expected to contribute favourably to our financial performance for 1Q 19 - extracted from quarter report
FY19 will undoubtedly be a more exciting year as there will be full contribution from the North Sabah asset and higher levels of production from both assets at a combined value of about 9,500bbls/day, coupled with the steady-state in crude oil prices at USD60-70/bbl. - extracted from PublicInvest Research
North Sabah's average uptime =96%
Brent crude stay above 70 for Jun & July
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Brent crude oil prices would be sustainable at current price levels given:
• Strong global oil demand growth, particularly from China and India
• The prolonged period (2015 to 2017) of minimal investment in exploration and development projects
• Higher oil supply disruption risk with rising geopolitical tensions in the Middle East region
• Continuing production decline in Venezuela and supply disruption in Libya
• Strong compliance of OPEC and their partners to agreed levels of supply cuts causing stockpiles to shrink in volume
• Reinstitution of sanctions by the United States of America on Iran which could affect oil supply
sell-off with high volume on Friday is not a good sign, but i think it's good as it managed to wash away most of the speculators and the margin kaki
immediate support at 0.93
cut loss point at 0.90
major resistance 1
dont forget the risk
Kindly refer to research done by Publicinvest Research for more figure and forecast.
Disclaimer: it isn't a buying or selling recommendation, your money, your decision
