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Regional Oil & Gas Summary - 13 May 2014

Core Content

The document provides a comprehensive overview of the regional oil and gas market on 12 and 13 May 2014, including price movements, news headlines, and analyst reports for various countries. It highlights the performance of key companies and their stock valuations.

Main Market Movements

• Henry Hub price dropped by 2.1% overnight.
• Dow Jones and S&P 500 increased by 0.7% and 1.0%, respectively.

News Headlines

China

• PetroChina created a new entity, PetroChina Eastern Pipelines Co., Ltd., to own 100% of its interest in Eastern Pipelines, with total assets and net assets valued at CNY91,626.73m and CNY38,854.61m.
• China gasoline and gasoil wholesale prices remained largely stable following a price cut announced by the NDRC.
• CNOOC ramped up production at the Kenli 3-2 oilfield in the southern Bohai Sea, targeting a peak output rate of 35kbpd.
• Sinopec's Qilu Petrochemicals will shut down its fluid catalytic cracker (FCC) and residue fluid cracker (RFCC) for maintenance from late May, with an annual production capacity of 800kt and 1.5mt.

International

• Energy ministers from 24 oil importing countries met in Seoul to discuss alternatives and increase investments in clean energy.
• Green Dragon Gas increased its reserve estimates by 113%, raising the company's net present value to USD898m.
• Companies won a contract for an LNG project, with Nextgen selected to build an optical fibre cable system connecting the Ichthys LNG and Prelude LNG projects, expected to be completed in 2016.
• Japan and the GECF signed an MOU on LNG for further cooperation in addressing key market issues.

Our Latest Reports

Malaysia

• MISC Bhd: BUY, target price MYR7.20. 1Q14 results were in line; expect QoQ weakness in 2Q14 due to softening petroleum operations.
• Perisai Petroleum: BUY, target price MYR1.76. Secured a 3-year JU contract with PCSB, expected to contribute MYR42m-44m net profit annually.
• Malaysia Marine And Heavy Engineering: BUY, target price MYR4.20. 1Q14 net profit was in line with expectations but significantly below consensus. Expect new job flows in 2H14.
• Ezion Holdings: BUY, target price SGD2.70. 1Q14 results were in line, with PATMI of USD45.2m. Expect continued growth in the Middle East.
• Petronas Gas: HOLD, target price MYR23.50. 1Q14 net profit was in line with expectations, with 2Q14 reflecting a more stable GPTA.

Other Markets

• Sembcorp Marine: HOLD, target price SGD4.36. Another disappointing quarter, with flat operating margin. Benefits of new Tuas yard may take longer to materialize.

Valuation Comparison

Asia Oil & Gas

Asia Oil Service

Key Information

• PetroChina and Sinopec are both involved in major operational and strategic moves in the oil and gas sector.
• CNOOC has increased production at its Kenli 3-2 oilfield.
• Green Dragon Gas significantly increased its reserve estimates.
• Japan and the GECF signed an MOU to enhance cooperation in LNG markets.
• Nextgen won a contract for an LNG infrastructure project.
• MISC Bhd, Perisai Petroleum, Malaysia Marine And Heavy Engineering, and Ezion Holdings received BUY ratings with target prices.
• Petronas Gas received a HOLD rating with a stable target price.
• Sembcorp Marine was downgraded to HOLD with a reduced target price due to weak performance.

Analysts Contact Information