Wednesday, 12 March 2014

RH Petrogas

UOBKayhian on 12 Mar 2014

FY14F PE (x): 49.2
FY15F PE (x): 23.6

Pre-development preparations in China has commenced. With regard to its oilfield in
China, management continues to work hard to lobby for an approval for its overall
development plan (ODP) with the National Development and Reform Commission
(NDRC). We were comforted to hear that the NDRC has never rejected any ODPs
historically so it is a matter of time before it gets approved. While the final approval has
not been approved, management has already commenced pre-development
preparations including the procurement of items with long lead items.
Maintain BUY with target price of S$1.40 based on NPV and risking model. Our
valuation is based on the NPV of the company’s current production/near-production
fields, plus risked estimates of its 2C resources and prospective resources, less net debt
adjusted for its committed capex.

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