20151113-Maybank_KERPL-Regional_O_il___Gas_11页_792kb

Regional Oil & Gas Summary

Core Content Overview

This document provides a summary of the regional oil and gas market conditions as of 12 November 2015, including price movements, news headlines, and analyst reports for key players in Asia, India, Japan, Malaysia, Philippines, South Korea, Thailand, and Vietnam. It also includes valuations and performance metrics for both oil & gas companies and oil-service firms.

Key Market Trends

• Crude Oil Prices:

  • Brent: Fell by 3.8% to USD44.06/b, with a -8.2% weekly and -11.3% monthly decline.
  • WTI: Dropped by 2.7% to USD41.75/b, with a -7.6% weekly and -11.5% monthly decline.
  • China Daqing Spot: Decreased by 3.8% to USD38.84/b, with a -7.5% weekly and -11.5% monthly drop.
  • Gold: Declined by 0.1% to USD1,085.20/Oz, with a -1.7% weekly and -7.2% monthly drop.
  • USD-CNY: No change at 6.37, with a 0.4% weekly and 0.4% monthly increase.

• Oil-Inventory Glut:

  • OPEC reported that global oil inventories are at the highest level in at least a decade, with stockpiles 210 million barrels above the five-year average.
  • The surplus is attributed to increased global production and is expected to be alleviated by slowing non-OPEC supply and rising winter fuel demand.
  • OPEC's own production fell due to reduced output in Iraq.

• China Crude Stocks:

  • China's crude stocks increased for the 5th consecutive month in October, despite a decline in net imports and production.
  • The rate of increase was 45,000 b/d, down from 784,000 b/d in September.
  • Platts calculates the stock changes based on net supply and refinery throughput.

• Far East Energy Bankruptcy:

  • A China-focused CBM explorer, Far East Energy, filed for bankruptcy.
  • The firm is based in Houston and operates in China's Shanxi and Yunnan provinces.
  • The bankruptcy is being administered under Case Number 15-35970 in the Southern District of Texas.

• Iran-Iraq Gas Deal:

  • Iran signed a six-year gas supply deal with Iraq to supply 20 mcm/d in winter and 35 mcm/d in summer to Basra.
  • Initial exports will start at 7 mcm/d, increasing in three phases.

Analyst Reports

Yinson Holdings

• Rating: BUY
• Target Price (TP): MYR4.35
• Key Points:
  • Yinson is viewed as a growth stock with potential for special dividend payouts after the sale of non-O&G business.
  • Expectations of 1-2 FPSO job wins within 12 months.

Malaysia Oil & Gas

• Rating: NEUTRAL
• Key Points:
  • PETRONAS plans to reduce dividends to MYR16b in 2016, down from MYR10b YoY.
  • No headcount cuts are expected.
  • Cautious outlook and cost prudence are not strong signals for recovery.
  • Selective BUYs on Bumi Armada, Dialog, Yinson, and KNM.

PTT Global Chemical

• Rating: HOLD
• Key Points:
  • 3Q15 profit was THB1.2b, down 87% QoQ due to stock losses, lower aromatics profit, and FX loss.
  • Reduced FY15 earnings forecast by 15%.
  • Target Price: TP62/share.
  • The stock is undervalued at 1.0x PB, but IRPC is preferred for stronger EPS growth.

Bumi Armada

• Rating: BUY
• Target Price (TP): MYR1.20
• Key Points:
  • Unconfirmed reports suggest MISC may inject offshore assets into Bumi Armada.
  • This could lead to strategic partnership and a positive outlook.

Valuation Overview

Asia Oil & Gas Valuations

Asia Oil-Service Valuations

Key Analysts

• Howard Wong (HK/China)

  • Contact: (852) 22680648 | howardwong@kimeng.com.hk

• Jigar Shah (India)

  • Contact: (91) 2266232632 | jigar@maybank-ke.co.in

• Pandu Anugrah (Indonesia)

  • Contact: (62) 21 2557 1137 | pandu.anugrah@maybank-ke.co.id

• Liaw Thong Jung (Malaysia)

  • Contact: (603) 22978688 | tliaw@maybank-ib.com

• Michael Bengson (Philippines)

  • Contact: (63) 28498840 | micheal bengson@maybank-atrke.com

• Yeah Chee Keong (Singapore)

  • Contact: (65) 6231 5842 | yeakcheeong@maybank-ke.com.sg

• Sutthichai Kumworachai (Thailand)

  • Contact: (66) 2658 6300 x 1400 | sutthichai.k@maybank-ke.co.th

• Le Nguyen Nhat Chuyen (Vietnam)

  • Contact: (84) 844555888×8082 | chuyen.le@maybank-kimeng.com.vn

• Truong Quang Binh (Vietnam)

  • Contact: (84) 444555888 x 8087 | binh.truong@maybank-kimeng.com.vn

Notes

• LNG Northeast Asia CFR: Based on ICAP's JKL 1-month forward price for LNG to Platts' assessment of the spot physical LNG market.
• All forward-looking estimates and multiples: For companies not under Maybank Kim Eng's coverage, including those under review, are sourced from Bloomberg.
• Average multiples and yields: Are weighted by market capitalization.