EQS-News / 24/06/2019 / 10:59 UTC+8
*[For Immediate Release] (23 June, 2019)*
*IDG ENERGY INVESTMENT LIMITED*
*IDG ????????**
_(Stock code: 650.HK)_
*IDG Energy Investment Announces FY2018 Annual Results*
*Net Profit increased 89.0% to HK$27.4 million *
*Portfolio along LNG value chain continues to extend*
The gross revenue from sales in domestic upstream oilfield
increased by 36.2% to approximately HK$210.0 million. The gross
oil sales volume increased by 9.3% to approximately 390,479
barrels and crude oil production increased 6.8% to approximately
387,513 barrels.
Investment income increased by 119.5% to approximately HK$163.3
million, which continued to improve the financial performance of
the Company.
EBITDA increased significantly by 132.6% to approximately
HK$236.6 million. Net profit increased by over 89.0% to
approximately HK$27.4 million.
The Company set foot in energy investment funds management
through entering into a framework agreement with Jereh for
cooperation of an energy investment fund, which will further
enrich the core business activities and broaden the revenue
stream of the Company.
*(June 23, 2019 - Hong Kong)* *IDG Energy Investment Limited* ("*IDG Energy
Investment*" or the "Company", stock code: 650.HK) is pleased to announce
the consolidated results of the Company and its subsidiaries for the
financial year ended 31 March 2019 ("FY2018"). The Company made significant
progress in its financial performance and business development in FY2018.
*Financial Highlights*
During FY2018, benefiting from recovering of oil prices and the operational
improvement, the domestic upstream crude oil asset recorded gross revenue
from sales of approximately HK$210.0 million, representing a year-on-year
increase of 36.2%. The Company holds 100% equity interest of the portfolio
company and the financial figures of the asset are fully consolidated to the
Company's financial statement.
Financial performance of the Company's other investment portfolio are
reflected in the investment income. In FY2018, the Company's investment
income amounted to HK$163.3 million, representing a significant year-on-year
increase of 119.5%. The increase is primarily attributable to return of the
investment from the upstream unconventional shale oil and gas assets in the
Eagle Ford core region of the U.S.
The Company's EBITDA for FY2018 increased by 132.6% year-on-year to
approximately HK$236.6 million. Net profit increased by over 89.0% to
approximately HK$27.4 million.
*Business Review*
As of 31 March, 2019, the Company has made investments in various energy
assets at home and abroad, covering upstream crude oil assets and liquefied
natural gas ("LNG") assets along the value chain.
In FY2018, the Company made further investments along the LNG value chain
and had successfully developed a more diversified and balanced investment
portfolio through selective investments regarding energy assets at home and
abroad. The Company also set foot in energy investment funds management
through entering into a framework agreement (the "Framework Agreement" )
with Yantai Jereh Petroleum Service Group Co., Ltd.*("Jereh"), further
enriching the core business activities and broadening the revenue streams of
the Company. For invested upstream assets, the Company focused on further
improvement of the operational efficiency and rigorous cost-control to
enhance the value of the assets.
*Summary of key investment portfolios*
*Investment along LNG value chain
JOVO*
On 28 July 2017, the Company invested in Jiangxi Jovo Energy Company Limited
( "JOVO" ). JOVO is a company principally engaged in clean energy
businesses, including importing, processing and sale of LNG and liquefied
petroleum gas ("LPG") in China.
According to the information provided by JOVO, JOVO'S operational
performance remained robust in 2018 with its sales volume and revenue
increased stably as compared to 2017. As for LNG imports, JOVO delivered
more than 1 million tons of LNG to end-users which represents another big
jump. In September 2018, JOVO filed application for its initial public
offering (IPO) in China. The Company strongly believes that JOVO' s
performance is in line with its expectation and the high demand of gas
supply in China will keep JOVO growing at a fast speed. Also, being
internationally recognized, JOVO is potentially expanding its footprints to
Southeast Asia.
*GNL Quebec *
On 30 November 2017, the Company, through its subsidiary, invested in GNL
Quebec, which is developing a state-of-the-art and low-carbon-emission LNG
exporting terminal project. The project is one of the largest Canadian LNG
export terminals under development with a maximum nameplate liquefaction
capacity of up to 11 million tons per annum. On 26 July 2018, the Company
made a subsequent investment of US$1 million (equivalent to approximately
HK$7,800,000) to support the project's ongoing development. The Company
holds minority interest in GNL Quebec.
GNL Quebec is developing a 750-km natural gas pipeline to connect the
Terminal to TransCanada' s Canadian Mainline in Eastern Ontario to expand
the competitive advantage of the entire project. The project of the terminal
has continued to make positive progress on key milestones to increase
momentum and advance towards FID ("Final Investment Decision").
*LNGL *
On 13 June 2018, the Company, through its subsidiary, made the investment
for A$28.2 million (equivalent to approximately HK$166.8 million). The
Company held a 9.9% equity interest in Liquefied Natural Gas Limited ("LNGL"
ASX code: LNG, US stock code: LNGLY) and became its second largest
shareholder.
According to the information provided by LNGL, the Magnolia LNG project,
located in Lake Charles of Louisiana, the U.S., with planned capacity of 8.8
mmpta, is recognized as one of the most viable greenfield LNG projects in
the U.S.. The project has obtained all required permits and approvals from
U.S. Federal Energy Regulatory Commission and U.S. Department of Energy.
LNGL continued its emphasis on signing long-term offtake contracts for
Magnolia LNG project while ensuring that its best-in-class project execution
and delivery strategy is fully ready to meet customer needs arising in the
LNG market. Most LNG industry participants are bullish on the prospects for
execution of new long-term offtake agreements in 2019. Consistent with this
thesis, active negotiations for Magnolia LNG capacity continue with focus on
Asian and European customers.
The Company believes that the Magnolia project is very market competitive in
terms of pricing. Along with proper execution and delivery strategy, mature
regulatory status, and financing plans, the Magnolia LNG project presents
buyers with a very attractive commercial opportunity against other projects.
*JUSDA Energy*
On 25 September 2018, the Company, through one of its wholly-owned
subsidiaries, has entered into the JV Agreement with JUSDA and the
Management, in relation to the formation of JUSDA Energy, to be engaged in
LNG logistics services. The Company made contribution of RMB39.0 million
(equivalent to approximately HK$43.9 million to JUSDA Energy pursuant to the
JV Agreement and the completion of the investment took place on 21 December
2018. The Company will hold a 39% equity interest upon completion of all
equity contribution in JUSDA Energy.
JUSDA Energy will benefit from the extensive network of natural gas
resources of the Company, which will give its customers access to LNG
resources in the North America and the Asia Pacific Region. JUSDA, as the
sole logistics chain management platform designated under Foxconn Technology
Group, has a wide container transportation network and strong bargaining
power among the industry, which will provide strong support to JUSDA Energy
in improving its LNG logistics services and reducing relevant costs.
JUSDA Energy's business plan has been successfully executed after its
formulation, and JUSDA Energy has started to provide stable logistic
services to customers. The recent performance of the business volume showed
its potential of fast expansion in near future. The Company believes the
business model of JUSDA Energy is very competitive
*Management of Energy Investment Fund*
On 20 November 2018, as a significant step and part of its principal
activity of global energy assets investment and management, the Company set
foot in energy investment funds management through entering into the
Framework Agreement with Jereh, for cooperation on the establishment,
operation and management of the Energy Investment Fund. Jereh, listed on the
Shenzhen Stock Exchange (Stock code: 002353), is an international group
specializing in equipment manufacturing, oil and gas engineering and
construction and oilfield technology services.
The Energy Investment Fund will be primarily focusing on investments along
China' s natural gas value chain as well as other energy-related industries.
Pursuant to the Framework Agreement, the expected size of the Fund is RMB3
billion to RMB5 billion, where Jereh, as a cornerstone investor, proposes to
make a capital contribution of RMB1 billion.
The establishment of the Energy Investment Fund will allow both parties to
explore projects with promising investment returns in energy industries. The
Company believes that Jereh' s in-depth knowledge in energy related
industries will help the Fund to maximize returns of investments. And the
Company will expand its energy investment fund management, which can zoom in
the scale of energy investment and create various type of revenue for the
Shareholder.
*Investments in Upstream crude oil assets*
*U.S. Upstream Shale Oil and Gas Assets*
The Company had widened its global footprint in the upstream oil assets by
successfully completing the investment in Stonehold in September 2017.
Stonehold holds certain world-class unconventional shale oil and gas assets,
covering approximately 23,754 gross acres (9,090 net acres) across Dimmit
and La Salle counties in the Eagle Ford region of South Texas of the U.S..
The area of the target assets (the "Target Assets" ) is liquid-rich, and the
majority of the reserves are crude oil and natural gas liquid. Based on the
information provided by Stonehold, the Target Assets consist of 197
producing wells currently, and the total net production and revenue of the
Target Assets for the 2018 were approximately 962,000 boe and US$48.2
million, respectively.
The income generated from the Term Loan in the form of interest income has
provided the Company with stable and considerable revenue with an amount of
US$13.6 million in FY2018. In addition, the Company believes that any
increase in the reserve and valuation of the Target Assets may increase the
expected returns for the Shareholders upon disposal of the Target Assets by
Stonehold in the future in an amount equivalent to 92.5% of any disposal
proceeds which will go to the Company under the Credit Agreement, and the
corresponding estimated fair value gain as at 31 March 2019 is US$9.1
million.
*Domestic Upstream Oilfield Assets*
Benefiting from the recovery of oil prices and the increase in production,
the Company's investment in the domestic upstream crude oil assets has made
significant progress. The Company drilled 13 wells as planned during FY2018,
among which, 12 wells had been completed and had achieved the anticipated
target formations with a success rate of 100%. As compared to the same
period last year, oil production volume increased by approximately 6.8% to
approximately 387,513 barrels; gross and net oil sales volume increased by
approximately 9.3% to approximately 390,479 and 312,384 barrels
respectively, and gross revenue from sales of crude oil increased by
approximately 36.2% to approximately HK$210.0 million.
*Outlook*
*Mr. LIU Zhihai, President of IDG Energy Investment*, commented, "The global
LNG market continued to strengthen in 2018 with the delivery volume reaching
319 million tons, an increase of 27 million tons as compared to 2017. Japan
remains the world's largest importer of LNG, followed by China and Korea.
China again shows a strong increase in demand for natural gas, which
accounted for more than 40 billion cubic metres (BCM) in growth.
The Company once again emphasized that its strategy focus is on the LNG
sector. The Company's investment strategy is to grasp the huge opportunity
arising from China's growing demand for imported LNG supplied from the North
America market, which is rich in low-cost shale gas. While we continue to
look for investment opportunities along the LNG value chain, we expect next
year will be a good time for the Company to create synergies among its
invested companies.
The Company will continue to, through its investments, supply LNG for the
Chinese market. In addition, the Company wishes to expand its investment and
replicate its successful business model to regions that are similar to
China."
He also added, "Given the global economic volatility and the risk of
oversupply in the market, the Company believes that the oil price will
continue to be volatile in 2019. We will continue to implement its hedging
strategy when the market is favorable so as to ensure that it can provide
cash flow to the investors when oil prices fall, while still be able to
benefit from the possible rise in oil prices. "
In terms of fund management, Mr. Liu said that the Company will continue to
identify new limited partners to join and the Company expects fundraising
activities to be carried out in the 2019 financial year.
"The energy industry has faced an incredibly tumultuous time in recent
years, with highly volatile commodity prices and dynamic geopolitical
environment. The Company's investment strategy has allowed the Company to
exploit opportunities arising from industry's distress. We are of the view
that the energy sector, by its very nature, is a favorable choice for the
Company to achieve long-term sustainable growth and prosperity.
We believe that the Company is well positioned for rapid development when
attractive investment assets become available. The Company will endeavor to
present unique investment opportunities for its Shareholders to gain
exposure to a diversified, top quality global energy asset portfolio and
strive for substantial returns. " he concluded
- End -
*About IDG Energy Investment (Stock Code: 650.HK)*
IDG Energy Investment Limited ("IDG Energy Investment" or the "Company",
SEHK code: 650.HK) is mainly engaged in global energy assets investment and
management.
The Company is currently focusing on China's continued deepening of energy
system reforms, increasing demand for nature gas and the substantial
investment opportunities arising from the emerging North America liquefied
natural gas ("LNG") exporting market due to abundant low-cost shale gas
supply. The Company's current portfolio covers China's first non-state-owned
LNG receiving terminal, one of the largest Canadian LNG export terminals
under development, a fully permitted greenfield LNG export terminal in the
United States (the "U.S."), as well as an LNG supply chain and logistic
services provider. Meanwhile, the Company also serves as the manager of an
energy assets fund. Other energy assets invested by the Company include an
upstream crude oil block in China and a world-class shale oil block in Eagle
Ford, Texas of the U.S., etc.
For further information, please refer to IDG Energy Investment's website:
www.idgenergyinv.com
This press release is issued by *Financial PR (HK) Limited *on behalf of
*IDG Energy Investment Limited*.
For further information, please contact:
*IDG Energy Investment*
Ms. Lydia Zhong Email: lydia_zhong@idgenergy.com
Tel:(852) 3903 1325
*Financial PR (HK) Limited*
Ms. Dawn Lee Email: dawnlee@financialpr.hk
Ms. Vivienne Wang Email: viviennewang@financialpr.hk
Ms. Zoey Qiu Email: zoeyqiu@financialpr.hk
Tel: (852) 2610 0846
Fax: (852) 2610 0842
Document: http://n.eqs.com/c/fncls.ssp?u=DPTNLGNKEU [1]
Document title: IDG Energy Investment Announces FY2018 Annual Results Net
Profit increased 89.0% to HK$27.4 million Portfolio along LNG value chain
continues to extend
24/06/2019 Dissemination of a Marketing Press Release, transmitted by EQS
Group.
The issuer is solely responsible for the content of this announcement.
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June 23, 2019 23:00 ET (03:00 GMT)
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