Reach EPS should be 10 cts instead of 0.1 cts as per your Quarter Report History.

Except for 2016, the company has delivered negative ROE ever since despite the high crude oil prices. So will it make money when oil prices comes down?

Reach Energy: A Turnaround at a Crossroads

Reach’s core business is the exploration, development, and sale of crude oil and petroleum products. Since 2019, the company has been in turnaround mode, and while losses have narrowed significantly, it still remained in the red in 2024.

A major shift came in 2023 when Super Racer Limited, a Hong Kong-based investor, became the controlling shareholder through a debt-to-equity swap. The board was restructured, and strategic control shifted from Malaysian operators to Hong Kong financial professionals.

Reach began repositioning itself - from a technically driven E&P operator to a financially driven energy investment platform. The focus shifted from field expansion to balance sheet repair and asset optimization.

Now, just as the turnaround seemed to be gaining traction, the company faces a new challenge: declining crude oil prices triggered by tariff pressures. This may force Reach to accelerate its repositioning - prioritizing:

• Cost containment and operational downsizing

• Asset monetization or divestment

• Strategic partnerships

• Diversification beyond upstream oil and gas

In short, Reach Energy is no longer a straightforward oil producer. For fundamental investors, unless there is high conviction in a clear catalyst or turnaround outcome, it remains a speculative and special situation play.

If not Reach, what about others? If you want to find out about investing in the Petronas group of companies, join me at this week’s podcast

Date: 6 May 2025 (Tue)

Time: 8:30pm

Link: https://www.facebook.com/xifu.my