RH Petrogas, an upstream oil and gas company with assets in Indonesia, has been reaffirmed with a “buy” rating by UOB Kay Hian Research, despite a 19% year-on-year revenue decline in the first half of 2025. The company’s revenue fell to $39.3m due to lower oil prices and reduced crude liftings, yet it exceeded earnings expectations thanks to stringent cost control measures. The company reported a significant turnaround in free cash flow, reaching $15m, supported by a net cash balance that constitutes 54% of its market capitalisation.
The company plans to drill two exploration wells in September and October, targeting potential unrisked recoverable reserves of 8-10 million barrels of oil equivalent (mmboe). The drilling, with a gross cost of $6.5m to $13m, could serve as a catalyst for the company’s share price if successful.
RH Petrogas remains in a strong financial position, with no debt and $62.7m in cash. The company is exploring growth opportunities, particularly in Indonesia, focusing on exploration and development assets. UOB Kay Hian has slightly lowered its target price for RH Petrogas to S$0.245, reflecting adjustments in oil price estimates. The company’s shares are trading at attractive multiples, with a 2025 forecast ex-cash price-to-earnings ratio of 7.3x and an enterprise value-to-EBITDA ratio of 3.8x. The upcoming drilling results could further enhance the company’s valuation and financial performance.
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