The Upstream Oil & Gas Companies on SGX

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The Oil & Gas names typically associated with the Singapore Oil & Gas sector are Keppel Corp (BN4), Sembcorp Marine (S51), Sembcorp Industries (U96), Ezion Holdings (5ME) and STX OSV Holdings (MS7). These are the five biggest Oil & Gas stocks listed on Singapore exchange (SGX). Price performances of these five stocks, which all provide oil equipment and services, have varied over the past 12 months from +5.5% for STX OSV to +166.0% for Ezion.
 
SGX also lists five companies involved in the exploration of oil and gas.  
 
Four of these explorers are listed on the Mainboard while one explorer is listed on Catalist.  Oil and gas explorers represent the upstream side of the industry with oil or gas reserves making up their primary assets. A core feature of oil and gas reserves as an asset base is that assets deplete and must be continually replaced through either drilling activities or acquisitions.
 
The five oil & gas exploration & production companies listed on SGX are as follows:
 

  • Interra Resources (5GI), which is involved in exploration, field development and production of oil. Its portfolio of assets is made up of five contract areas in Indonesia and Myanmar. Last week Interra Resources transferred from Catalist to the Mainboard as discussed in this recent Market Update. Interra Resources has gained 279.1% over the past 12 months.  Current full market capitalisation is S$197 million. The investor relation website can be found here.
  • Loyz Energy (594) is involved in exploration and development. Its portfolio made up of assets in India, the United States and Australia and New Zealand. Loyz Energy is listed on Catalist with a full market capitalisation of S$132 million. Loyz Energy has gained 21.5% over the past 12 months. The investor relation website can be found here.
  • Mirach (C68) is involved in oil exploration, appraisals and production. Its asset portfolio is located in Cambodia, South Sumatra and East Papua of Indonesia. Current full market capitalisation is S$58 million. Mirach has declined 30.3% over the past 12 months. The investor relation website can be found here.
  • Ramba Energy (R14) is also involved in oil exploration, appraisals and production. The company’s portfolio of oil and natural gas assets are located in South Sumatra and West Java of Indonesia. Due to its holdings of a logistic business, Industrial Classification Benchmark (ICB) have Ramba Energy is categorised to Industrial Transportation Sector as discussed in a recent Market Update.  Current full market capitalisation is S$192 million. Ramba Energy has gained 71.4% over the past 12 months.  The investor relation website can be found here.
  • RH PetroGas (T13) is involved in exploration, development and production of oil and gas. Its portfolio of assets is located in China, Indonesia and Myanmar. RH PetroGas completed its transition from an electronics manufacturer to an upstream oil and gas company in 2010. Current full market capitalisation is S$307 million. RH PetroGas has gained 4.2% over the past 12 months.  The investor relation website can be found here.

 
The Industry Classification Benchmark currently categorise two of the above stocks to the Exploration & Production sector, Interra Resources and Mirach Energy.
 
Other stocks categorised to the ICB Exploration and Production subsector are China Aviation Oil (G92), Chemoil Energy USD (AV5), Sinostar PEC Holdings (C9Q) and Ouhua Energy Holdings (AJ2). China Aviation Oil is involved in the supply, distribution and trading of Jet Fuel while Chemoil Energy USD is involved in the distribution of marine fuel.  Sinostar PEC Holdings is involved in the production of Gas and Ouhua Energy Holdings is involved in the processing of gas.
 
During last week’s SGX My Gateway event, Mr Peter Cockcroft provided an educational overview of the oil exploration sector in addition to the sector risks and the popular valuation methods used by broker research analysts. Risks that were detailed by Mr Cockcroft were related to exploration, geology, contracts, government, political, developmental, natural, terrorists, environmental, operational, corporate, commercial and labour.
 
Mr Cockcroft noted that the common forms of valuation of oil explorers are cash flow, break-up value, finding costs, return on investment and total enterprise value to EBITDA. The total enterprise value to EBITDA term simply allows a company’s cash flow to be viewed on a debt-adjusted basis, which takes into account financial leverage on the business’ price to cash flow ratio.  

Source: SGX My Gateway

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STX OSV Holding: On Down Trend

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STX OSV Holding is currently on down trend with immediate support at about $1.275 followed by $1.15 if the support is broken. STX OSV has been trading within many channels (up trend, down trend) previously. These chart patterns (channels) are quite reliable and good for swing trade in future.


Key Statistics for SOH

Current P/E Ratio (ttm) 4.9797
Estimated P/E(12/2012) 6.6733
Relative P/E vs. FSSTI 0.4117
Earnings Per Share (NOK) (ttm) 1.2000
Est. EPS (NOK) (12/2012) 0.8940
Est. PEG Ratio –
Market Cap (M SGD) 1,545.80
Shares Outstanding (M) 1,180.00
30 Day Average Volume 9,596,233
Price/Book (mrq) 2.3248
Price/Sale (ttm) 0.6019
Dividend Indicated Gross Yield 7.63%
Cash Dividend (SGD) 0.1300
Last Dividend 08/21/2012
5 Year Dividend Growth –
Next Earnings Announcement 02/12/2013
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Strongest Mid Cap Dividend yields over the past year

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Over the course of 2012 the FTSE ST Mid Cap Index has maintained a higher dividend yield than the Straits Times Index (STI), the broader FTSE ST All Share Index, in addition to the regional FTSE Asia Pacific All Cap Index.
 
In fact, looking back over the past 12 months the FTSE ST Mid Cap Index appreciated +22.4% in price, while providing a total return of +29.4% in Singapore Dollar terms. The approximate +7.0% difference, sourced by Bloomberg, represents reinvested dividend distributions that are weighed according to the weighting of the relevant stock within the Index. In the most recent monthly reports FTSE Group had estimated the difference between price appreciation and total return of the Mid Cap Index to be +6.2% in the 12 months ending 31 October.
 
Dividend yields for the stocks of the Mid Cap Index that distribute dividends varied from  +0.1% for Ezion Holdings [5ME] to +16.9% for STX OSV Holdings [MS7] over the 12 months ending 23 November. A recent and full list of the 12 month dividend history of the constituents can be found here. 
 
The five Mid Cap stocks with the strongest dividend distributions over the 12 months ending 23 November, were as follows:

  1. STX OSV Holdings paid 16.9% in dividends which included a special cash dividend in August. The yield contributed to a 12 month total return of +41.2%. Current indicative yield is 7.4%.
  2. SATS Ltd [S58] paid 9.5% in dividends (also included a special dividend) boosting 12 month total return to +34.5%. Current indicative yield is 4.0%.
  3. Hutchison Port Holdings Trust [NS8U] paid a dividend yield of 8.2%, boosting 12 month total return to +35.2%. The current indicative yield of the Trust is 8.2%.
  4. CapitaRetail China Trust [AU8U] distributed 8.1% in dividends, boosting 12 month total return to +46.4%. The current indicative yield of the REIT is 6.3%.
  5. Pacific Andes Resources Development [P11] distributed 7.3% in dividends, contributing to a total return of -16.6% over the 12 months. Current indicative yield is 7.3%.

 
Of the 50 constituent stocks of the Index, the simple average dividend yield for the past 12 months was around 4.3%. A handful of stocks did not distribute dividends. Furthermore, the simple average of 4.3% does not take into account the different impact of dividend distributions on the Index because of the relevant stock’s weighting in the Index. For instance, consider the dividend yields of Hutchison Port Holdings Trust at 8.2% and Yangzijiang Shipping Holdings [BS6] at 6.1% over the past 12 months. As of the end of October, FTSE Group maintained that Hutchison Port Holdings Trust accounted for an 8.5% weighting in the Mid Cap Index versus a 2.8% weighting for Yangzijiang Shipping Holdings. Thus, the dividend yield of Hutchison Port Holdings Trust had more Index impact than Yangzijiang Shipping Holdings. Comparing the simple average yield to the actual weighted yield associated with the Index reveals that over the past 12 months the Index was more weighted to stocks with a dividend yield above 4.3%.

 

Source: SGX My Gateway

 

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