Oil - Service, Equipment, Pipelines etc

[winston]

Improving outlook for O&G stocks

Indirect beneficiaries of higher oil prices include the drilling and floating production, storage and offloading (FPSO) players that provide services to the upstream players;

It pointed to Velesto Energy Bhd (drilling) and Yinson Holdings Bhd and Bumi Armada Bhd (both FPSOs) as examples.

However, the impact of higher oil prices on Dialog Group Bhd would be “neutral”.

Source: The Star

https://www.thestar.com.my/business/bus ... -og-stocks

[winston]

Oil & Gas – Malaysia
Pockets Of Opportunities Amid Uncertainties On Costs

Although local upstream capex is set to grow, the degree to which Petronas meets its
lofty targets may be weighed down by factors such as energy transition, overseas
prioritisation and costs.

Cost inflation may invite execution risks, thus we suggest a narrower investment strategy.

However, there are pockets of opportunities from MMHE (ESG-driven earnings catalysts), Dialog (Pengerang/ChemOne beneficiary), MISC (proxy to high tanker rates) and Yinson (highest long-term earnings growth).

Source: UOBKH

https://research.uobkayhian.com/content ... f206f11897

[winston]

RHB Research stays ‘overweight’ on oil and gas sector, sees minimal impact from Opec+ cut

By Anis Hazim

RHB top picks are Malaysia Marine and Heavy Engineering Holdings Bhd, Yinson Holdings Bhd, PTT Exploration and Production Pcl, and PTT Oil and Retail Business Pcl.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/669944

[winston]

HLIB Research neutral on O&G, top picks DNeX, Wah Seong

We are also wary of cost hikes that are currently demonising the oil and gas services and equipment (OGSE) space, due to cost inflation woes amidst the heightened oil and gas demand with global supply chain disruptions – impacting the availability of oilfield equipment and spares.

Commenting on PETRONAS’ results, HLIB said the oil giant recorded a decent 1Q23 core net profit of RM21.9bil.

Petronas expects oil and gas prices to moderate further due to prolonged economic uncertainties.

Source: The Star
https://www.thestar.com.my/business/bus ... -wah-seong

[winston]

Oil & Gas – Malaysia
2H23: Nimble And Ahead Of The Game Matters, To Adapt To Transition

The Energy Asia Conference strongly hints Petronas’ seriousness in embracing the structural shifts towards energy transition, including developing a new CCUS ecosystem/industry enabler.

While local O&G activity levels will sustain for 2H23, we note:
a) Petronas’ hint at peak local O&G production by 2024 and a continued focus on
overseas projects, and
b) Petronas’ 2024/25 greenhouse gas targets may explain the lacklustre five-year local capex until 2027.

Retain OVERWEIGHT with selective investments.

Source: UOBKH

https://research.uobkayhian.com/content ... ee2b769111

[winston]

HLIB upgrades O&G sector; Bumi Armada and Wasco top picks

By Surin Murugiah

Petroliam Nasional Bhd (Petronas) recorded a decent second quarter of 2023 (2Q2023) core net profit of RM18.9 billion — up 14% quarter-on-quarter (q-o-q) but down 16% year-on-year (y-o-y) — bringing first half of 2023 (1H2023) core earnings to RM40.8 billion, down 7% y-o-y.

In 1H2023, domestic capex mix stood at RM10.5 billion (up 48% y-o-y).

“We maintain our Petronas capex projection of RM50 billion for 2023.

“Petronas’ dividend commitment stands at RM40 billion for 2023.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/681446

[winston]

Malaysia - TA Securities: Velesto, Pantech, MHB well positioned to leverage expenditure into O&G upstream activities

By Surin Murugiah

Upstream service providers such as Velesto Energy Bhd, Pantech Group Holdings Bhd and Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) are well positioned to leverage the higher capital expenditure into upstream exploration and production activities.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/683036

[winston]

Oil & Gas - Overall
Winners and underperformers from oil rally

The physical impact of the Hamas-Israel conflict on the oil markets is minimal for now; hence, we do not expect a major oil price rally to materialise.

Direct beneficiaries of higher oil prices are Hibiscus and Dialog; Petronas Chemicals, Velesto and Dayang benefit indirectly, in our view.

Meanwhile, Petronas Dagangan may lose out. Reiterate Neutral on the O&G sector, with Yinson, Bumi Armada and Dayang as our top sector picks.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 9446027099

[winston]

A cyclical sector: always has been and always will be

Still expecting elevated crude oil prices in 2024E

The oil and gas sector is a cyclical one with recurring periods of boom and bust – as oil demand is relatively inelastic while oil supply is elastic.

As we are now in a severely underinvested phase coupled with a record-high demand for oil in 2023-2024E, we view that the elevated oil price environment will be here to stay for the medium term.

We maintain POSITIVE on the sector with in-house Brent ASP assumptions of USD85/80/bbl for 2023/2024E.

Top sector BUYs are Yinson, BArmada and Wasco

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/344176.pdf

[behappyalways]

This is so very interesting. The question is whether Exxon and Chevron are overvalued or are BP and Shell undervalued?
https://twitter.com/AyeshaTariq/status/ ... 5621767272