RH PetroGas (T13) H1 2023 earnings summary

Executive summary

• H1 2023 revenue fell 24.1% YoY to US$43.0m and net profit fell 79.9% to US$3.1m, as lower realised oil prices and higher field costs compressed gross profit.

• Operating cash flow remained positive at US$11.6m; cash and bank balances were US$64.4m at 30 June 2023.

Financial highlights

• Revenue was US$43.0m, down 24.1% YoY; gross profit fell 65.6% to US$9.7m as cost of sales rose 17.1% to US$33.3m.

• Profit before tax was US$6.2m, down 76.5% YoY; net profit was US$3.1m, down 79.9%.

• Other expenses included US$1.3m of overlift expense and a US$0.5m net foreign-exchange loss; other income rose to US$1.3m, partly from higher fixed-deposit interest.

• Income tax expense declined to US$3.1m from US$11.0m, including US$2.9m attributable to the two PSCs and a US$0.2m prior-year tax under-provision.

Outlook and guidance

• July work programmes commenced: offshore Salawati 3D seismic acquisition and the Riam-1 exploration well in the Kepala Burung PSC; both were ongoing at the announcement date.

• Plans for the rest of 2023 included two further exploration wells and one development well, barring unforeseen circumstances.

• The two PSCs carry firm exploration commitments of approximately US$68.2m net to working interests over their first five contract years; commercial drilling success could support organic growth.