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Regional Oil & Gas Summary

Core Content Overview

The document provides an analysis of the oil and gas market across Asia, highlighting recent price movements, news headlines, and analyst ratings for key companies. It includes information on crude oil and gas prices, market trends, and specific developments in the region.

Oil & Gas Price Movements (7 August 2015)

• Brent Crude Oil: Down by 1.8% to USD48.61/b, marking a 6.9% drop in one week and a 15.3% decline in one month.
• WTI Crude Oil: Down by 1.8% to USD43.87/b, with a 6.9% weekly drop and a 16.8% monthly decline.
• Dubai Fateh Spot: Stable at USD48.11/b, with a -9.4% one-week change and a -14.0% one-month change.
• China Daqing Spot: Stable at USD44.15/b, with a -7.4% one-week change and a -15.3% one-month change.
• NYMEX Henry Hub: Down by 0.5% to USD2.80/MMBtu, with a -0.3% weekly change and a -1.2% monthly change.
• LNG Northeast Asia CFR: Stable at USD8.03/MMBtu, with a -0.4% one-week change and an 8.8% increase in one month.
• Singapore 92 RON Spot: Down by 0.8% to USD63.42/b, with a -6.4% weekly drop and a -11.4% monthly decline.
• Gasoil 500 ppm SG Spot: Down by 0.3% to USD61.78/b, with a -2.6% weekly change and a -12.3% monthly decline.
• 3.5% 180cst Fuel SG Spot: Stable at USD270.23/mt, with a -4.0% weekly change and a -14.2% monthly decline.
• Gold: Up by 0.4% to USD1,094.15/Oz, with a -0.2% weekly change and a -5.3% monthly decline.
• USD-CNY: Stable at 6.21, with no change in the last week or month.
• DJI: Down by 0.3% to 17,373.38, with a -1.8% weekly change and a -2.3% monthly decline.
• S&P 500: Down by 0.3% to 2,077.57, with a -1.2% weekly change and a -0.2% monthly decline.

News Headlines Summary

1. Oil continues weeks-long slide:

   • Crude oil prices fell to multi-month lows.
   • US oil rig count increased by 6, signaling higher production.
   • US gasoline stocks exceeded estimates, contributing to the bearish trend.

2. US rig count up by 10:

   • US oil and gas rig count rose to 884, with a 1,024 year-over-year decline.
   • Oil rigs increased by 6 to 670, while gas rigs increased by 4 to 213.

3. Indonesian Pertamina's refinery upgrade plan faces hurdles:

   • The Plaju refinery was removed from the upgrade list due to its remote location.
   • Sinopec had been selected for the upgrade.

4. Petrobras profits dive 90%:

   • The company reported a 90% drop in net profit due to impairment and tax charges.
   • Sales rose 8% compared to the previous quarter but fell 3% year-over-year.

5. Indonesia to auction 11 oil and gas blocks:

   • 11 oil and gas blocks will be auctioned this month, including 3 through direct offers and 5 through regular tenders.

6. China gas price cut looms:

   • China aims to stimulate demand by reducing regulated gas prices.
   • Gas demand grew only 3.3% year-on-year, the weakest in over a decade.
   • Regulated gas prices are among the highest globally and above competing fuels.

Our Latest Reports Summary

Petronas Gas

• Rating: HOLD
• Target Price (TP): MYR24.00
• Notes:
  • Scheduled plant shutdowns in 2Q15 impacted product volumes.
  • No major shutdowns planned for 2H15.

PetroVietnam Drilling

• Rating: BUY
• Target Price (TP): VND90,530
• Notes:
  • Share price down 52% from the peak in September 2014.
  • PVD is a drilling contractor, with 60% of profits from drilling and 38% from related services.
  • Recommended for investors due to recent catalysts and Vietnam's O&G growth potential.

Malaysia Oil & Gas

• Rating: NEUTRAL
• Notes:
  • Iran reached an agreement with P5+1, potentially adding 200k-700k bpd to the market.
  • The deal may dampen sentiment due to DD-SS imbalances.
  • Recommended BUYs include Yinson, Bumi Armada, Dialog, and KNM.

SapuraKencana Petroleum

• Rating: HOLD
• Target Price (TP): MYR2.80
• Notes:
  • Secured a USD273m turnkey job from ONGC.
  • GSA negotiations are ongoing, with potential impact on earnings.
  • TP unchanged.

Asian Oil & Gas Valuations (7 August 2015)

Asian Oil-Service Valuations

Key Analysts

• Howard Wong (HK/CHINA)
• Jigar Shah (INDIA)
• Pandu Anugrah (INDONESIA)
• Liaw Thong Jung (MALAYSIA)
• Michael Bengson (PHILIPPINES)
• Yeah Chee Keong (SINGAPORE)
• Sutthichai Kumworachai (THAILAND)
• Le Nguyen Nhat Chuyen & Truong Quang Binh (VIETNAM)

Summary of Key Points

• Crude Oil Prices: Both Brent and WTI saw declines, continuing a multi-week downward trend.
• Rig Count: US oil and gas rig count increased, indicating potential for higher production.
• Refinery Projects: Indonesia's Pertamina faces challenges in its refinery upgrade plans.
• Profit Decline: Petrobras reported a significant drop in profits, attributed to impairment and tax charges.
• Auctions: Indonesia is set to auction 11 oil and gas blocks, signaling increased activity in the sector.
• Gas Demand and Prices: China's gas demand is weak, and the government is considering price cuts.
• Company Ratings: Maybank KE provides ratings and target prices for key companies across Asia, with some recommended as BUY and others as HOLD or SELL.
• Valuation Metrics: Various financial metrics such as PER, EV/EBITDA, and ROE are presented for different companies to assess their market position.