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06 December 2024

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Oil and Gas: 9M24 Results Round-up

3Q24 Results

  • In 3Q24, our oil and gas coverage experienced solid volume growth of +9.8% YoY, driving oil production up +5.6% YoY, with MEDC as main contributor (+32.0% YoY). However, EBITDA performance was mixed (+3.0% QoQ, -9.1% YoY), mainly due to lower GPM of 22.8% (-66.3 bps QoQ, -453.8 bps YoY, excluding RAJA).
  • We expect continued price pressure in 4Q24 and 2025F as OPEC+ cuts China's demand outlook to 310 mbopd (from 410 mbopd) and US production rises, prompting us to keep our oil forecast at USD 75/bbl (-6.3% from 2024 average of USD 80/bbl). Despite these external challenges, we see domestic catalyst: investments from upstream oil and gas in Indonesia grew to USD 920 million (+17.9% YoY), driven by block revitalization to meet export demand; government investment to rise further to achieve the 2025F production target of 1.6 mmbopd, potentially boosting revenue for local O&G companies.
  • We maintain Neutral call for the sector, favoring undervalued stocks with growth potential and strong gas exposure, which offer low volatility and high margins. Our pecking order for preference is MEDC>RAJA>AKRA>PGAS. MEDC (BUY, TP IDR 2,200) is our top pick as the company may benefit from current oil and gas price trends and its 20.9% stake in AMMN, valued at IDR 151.6T which has not been fully priced in.

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Oil and Gas 3Q24 results

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Oil and Gas 3Q24 results

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