Broker: UOB Kay Hian Private Limited
Date of Report: August 19, 2025
RH Petrogas (RHP SP): Cash-Fuelled Resilience and Exploration-Driven Upside in 2025
Company Overview: RH Petrogas’ Strong Position in Indonesia’s Upstream Oil & Gas
RH Petrogas (RHP SP) stands out as a Singapore-listed upstream oil and gas producer with two active assets in Indonesia. As of end-2024, the company boasted 2P reserves totaling 27.8 million barrels of oil equivalent (mmboe), with a substantial majority (88%) in oil and the remainder in gas. RHP’s market capitalization is S\$148.8 million (US\$116.0 million), with 835.9 million shares outstanding.
Key shareholders include Woodsville International Ltd (36.17%), Sharptone Investments Ltd (15.90%), and RH Capital (13.21%). Notably, the company maintains a robust net cash position, with net cash per share amounting to S$0.10—an impressive 56% of its closing share price.
1H25 Financial Performance: Resilience Amid Oil Price Volatility
Despite facing a challenging environment marked by lower oil prices and reduced liftings, RH Petrogas delivered a better-than-expected set of results for 1H25. The company demonstrated significant cost discipline and generated strong free cash flow, underscoring its operational resilience.
| Metric |
1H24 |
1H25 |
YoY Change |
Comments |
| Brent oil price (US\$/bbl) |
83.42 |
70.08 |
-16.0% |
Mirroring global oil trends |
| Revenue (US\$m) |
48.19 |
39.27 |
-18.5% |
Decline in oil price & production |
| Gross profit (US\$m) |
19.60 |
14.12 |
-28.0% |
Cost control offset lower prices |
| EBITDA (US\$m) |
20.02 |
16.99 |
-15.1% |
Margin improvement |
| Pre-tax profit (US\$m) |
17.50 |
13.32 |
-23.9% |
Reflects lower prices |
| PATMI (US\$m) |
7.34 |
5.96 |
-18.7% |
Better than expected |
| Free cash flow (US\$m) |
-2.22 |
15.27 |
N.m. |
Absence of exploration spending |
| Gross margin |
40.7% |
36.0% |
-4.7ppt |
Slightly lower margins |
| EBITDA margin |
41.5% |
43.3% |
+1.7ppt |
Efficiency gains |
| Pre-tax margin |
36.3% |
33.9% |
-2.4ppt |
Stable profitability |
Key highlights:
- Revenue declined 19% YoY, in line with lower oil prices and production.
- Strong cost control with cost per barrel at US\$29.80/bbl.
- PATMI covered 60% of full-year estimates, showcasing operational efficiency.
- Free cash flow surged to US\$15m, annualized FCF yield of 28%.
Operational Developments: Upcoming Exploration Wells and Strategic Moves
- Two exploration wells are slated for drilling in September and October 2025 in the Basin PSC (RHP stake: 70%).
- Each well targets unrisked recoverable reserves of 8–10 mmboe, with the second well focusing predominantly on gas for potential sale to a nearby nickel mine (project still in planning).
- Gross cost for drilling and completion: US\$6.5m and US\$13m respectively.
- Exploration spending expected to increase in 2H25 as these programs commence.
Balance Sheet Strength and Cash Flow Generation
- RHP ended 1H25 with US\$62.7m in cash, zero debt, and a healthy current ratio of 2.5x.
- Interest coverage remains robust, with EBIT of US\$13.3m versus minimal interest expenses.
- Net cash per share is S\$0.10, representing 56% of share price.
- Company is actively assessing growth investments, particularly in Indonesia, with a focus on exploration and development assets.
Earnings Revision and Risk Factors
- 2025–2027 PATMI estimates were lowered by 4–13% to reflect:
- Lower oil price assumptions across forecast years.
- Flat oil production for 2025 (vs. previous 2% growth), due to power issues impacting 1H25 output.
- Major downside risks include sustained oil price weakness and unsuccessful exploration results.
Valuation and Recommendation: Attractive Multiples and Catalysts Ahead
- BUY rating reiterated, with a slightly reduced SOTP-based target price of S\$0.245 (from S\$0.254), reflecting updated oil price estimates.
- RHP trades at compelling multiples:
- 2025F ex-cash PE: 7.3x
- EV/EBITDA: 3.8x
- Three-month average daily turnover surged 80% to US\$1.8m.
- Annualized ROE based on 1H25 results is around 16%—healthy for a small-cap upstream operator.
- No value has been imputed for the two upcoming exploration wells; success could add S\$0.02–0.04/share.
Key Financials: Multi-Year Snapshot
| Year Ended Dec 31 (US\$m) |
2023 |
2024 |
2025F |
2026F |
2027F |
| Net turnover |
94 |
93 |
80 |
74 |
71 |
| EBITDA |
3 |
29 |
18 |
13 |
11 |
| Net profit (adj.) |
3 |
18 |
9 |
6 |
5 |
| EPS (S\$ cent) |
0.4 |
2.2 |
1.1 |
0.8 |
0.7 |
| PE (x) |
36.8 |
6.3 |
13.1 |
18.0 |
21.2 |
| P/B (x) |
2.8 |
2.1 |
2.1 |
2.1 |
2.1 |
| EV/EBITDA (x) |
26.7 |
2.4 |
3.8 |
5.3 |
6.3 |
| Dividend yield (%) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
| Net margin (%) |
2.8 |
15.7 |
11.0 |
8.7 |
7.8 |
| Net debt/(cash) to equity (%) |
(122.8) |
(92.6) |
(99.0) |
(91.7) |
(91.8) |
| ROE (%) |
6.4 |
29.6 |
15.7 |
11.4 |
9.7 |
Net Present Value Breakdown: Asset Base and Exploration Upside
| Asset Type |
Mmboe |
US\$/boe |
US\$m |
S\$m |
S\$/share |
| Production & development assets |
14.2 |
3.33 |
47.3 |
63.8 |
0.076 |
| 2C oil and gas resources |
60.5 |
0.80 |
48.4 |
65.4 |
0.078 |
| Total reserves & resources |
74.7 |
1.28 |
95.7 |
129.2 |
0.155 |
| Exploration |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
| Investments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
| Net Cash/(Debt) |
– |
– |
55.9 |
75.5 |
0.090 |
| Grand Total |
– |
– |
151.6 |
204.7 |
0.245 |
Strategic Outlook: Catalysts and Investment Considerations
- Success in upcoming exploration wells could unlock significant near-term share price catalysts and medium- to long-term profit and cash flow growth.
- Operational efficiency remains strong, but oil price volatility is a persistent challenge.
- Continued focus on cost management and strategic asset growth in Indonesia.
- RHP’s efficiency ratios and margins suggest effective cost controls but highlight sensitivity to pricing headwinds.
Conclusion: RH Petrogas—A Small-Cap Energy Player with Big Upside Potential in 2025
RH Petrogas has demonstrated robust financial discipline and operational resilience, even as oil prices have softened and production faced temporary setbacks. The company’s strong balance sheet, compelling valuation, and near-term exploration catalysts position it as an attractive pick for investors seeking exposure to Southeast Asia’s upstream energy sector. The upcoming drilling results in September and October 2025 could be transformative, adding significant value if successful. With a healthy cash position, low leverage, and disciplined management, RH Petrogas is well-placed to weather industry volatility and capture future growth opportunities.
Key Forecast Metrics and Growth Outlook
| Year Ended Dec 31 (%) |
2024 |
2025F |
2026F |
2027F |
| EBITDA margin |
31.6 |
22.6 |
17.7 |
15.6 |
| Pre-tax margin |
34.3 |
23.0 |
18.2 |
16.2 |
| Net margin |
15.7 |
11.0 |
8.7 |
7.8 |
| ROA |
13.7 |
8.2 |
6.0 |
5.1 |
| ROE |
29.6 |
15.7 |
11.4 |
9.7 |
| Net debt/(cash) to equity |
(92.6) |
(99.0) |
(91.7) |
(91.8) |
Investment Summary
- BUY rating with target price of S\$0.245.
- Strong free cash flow and balance sheet.
- Potential share price catalysts from upcoming exploration wells.
- Disciplined cost management and attractive valuation multiples.
- Exposure to Southeast Asia’s energy growth story via a well-managed small-cap player.
