Dialog upstream earnings are expected to strengthen as commercial gas production starts at the Salbiah field. Further contributions are anticipated from the development of the Fatimah gas field. Both fields sit within the Baram Junior Cluster, offshore Miri, Sarawak.
What Is Driving Dialog Upstream Earnings Higher?
Dialog’s Baram Junior Cluster achieved its first commercial gas production from the Salbiah field on Oct 27. HLIB Research called this a key milestone for the upstream business.
Capex at Salbiah is expected to moderate to maintenance levels after most development spending is complete. This supports stronger cash flow generation.
The group has also reached a final investment decision on the Fatimah gas field, with an additional investment of US$211mil. Fatimah is expected to commence production by the end of 2028.
How Much Will Salbiah and Fatimah Add to Dialog’s Net Profit?
- Salbiah: RM27mil incremental annual net profit from FY27
- Salbiah and Fatimah: rising to RM61mil after Fatimah starts in FY29
- Earnings uplift: 12% in FY27, 12% in FY28 and 27.4% in FY29
HLIB Research maintained its earnings forecasts for now. It cites limited visibility on the production profiles of both fields.
Why Does Kenanga Put 10 Sen per Share on Fatimah?
Kenanga Research said the Fatimah development could add 10 sen per share to Dialog’s valuation. The estimate assumes a gas price of RM25 per million British thermal units and an eight-year production period beginning in 2029.
Execution risk for the second field should be lower. Kenanga points to Dialog’s track record in bringing Salbiah into commercial production.
How Is the Baram Junior Cluster Structured?
The cluster comprises five fields, and Salbiah and Fatimah have been identified as commercially viable. Dialog operates the production sharing contract.
Dialog holds a 70% participating interest. Petroleum Sarawak Exploration and Production holds the remaining 30%.
Can Tank Terminals Support DIALOG 7113’s Earnings Mix?
Kenanga Research expects the tank terminal segment to maintain resilient growth in FY27. Tight storage capacity in Asia supports that view.
Kenanga raised its sum-of-parts target price for Dialog to RM2.75 from RM2.65, maintaining its “outperform” call. HLIB Research said stable recurring tank terminal income complements upstream operations.
Pengerang’s growing role as a regional storage and logistics hub is central to the tank terminal story. Dialog has approximately 660 acres of available buffer land that could support further storage capacity expansion. AI Stock Analysis for Malaysians covers how to track company updates like this one.
Where Do Research Houses Stand on Dialog’s Target Price?
- Kenanga Research: “outperform”, sum-of-parts target price RM2.75
- HLIB Research: “buy”, unchanged target price RM2.49
Both research houses kept their earnings forecasts unchanged. Investors may want to watch the production profiles at Salbiah and Fatimah, which remain under limited visibility.
Key Takeaways
- Salbiah began commercial gas production on Oct 27 from the Baram Junior Cluster.
- HLIB Research projects RM27mil in incremental annual net profit from FY27, rising to RM61mil in FY29.
- Fatimah carries a US$211mil additional investment and is expected to start by the end of 2028.
- Dialog holds 70% of the production sharing contract, with Petroleum Sarawak Exploration and Production holding 30%.
- Kenanga Research’s target price is RM2.75 and HLIB Research’s is RM2.49.
This article is for information only and is not investment advice. Do your own research and consider your own financial situation before making any decision.
Frequently Asked Questions
How much will Dialog’s Salbiah gas field add to net profit?
HLIB Research projects an incremental annual net profit of RM27mil from Salbiah, beginning in FY27. That figure could rise to RM61mil after Fatimah starts production in FY29.
When will Dialog’s Fatimah gas field start production?
Fatimah is expected to commence production by the end of 2028. Dialog has reached a final investment decision on the field, involving an additional investment of US$211mil.
What is Dialog’s stake in the Baram Junior Cluster?
Dialog operates the production sharing contract with a 70% participating interest. Petroleum Sarawak Exploration and Production holds the remaining 30%.
What are the latest target prices for Dialog Group?
Kenanga Research raised its sum-of-parts target price to RM2.75 from RM2.65 with an outperform call. HLIB Research maintained a buy rating with an unchanged target price of RM2.49.
Source: View Original Article — The content is based on the original publisher. Refer to the original content for accurate info. Contact us for any changes.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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