KUALA LUMPUR: Dialog Group Bhd’s upstream earnings are expected to strengthen following the commencement of gas production at the Salbiah field and the planned development of the Fatimah field.
RHB Research said both developments would strengthen Dialog’s upstream production base and diversify its earnings streams.
“The Salbiah field should provide a full-year production contribution in the financial year 2028, while the Fatimah field represents an additional longer-term growth driver, subject to its development schedule and first-gas timeline.
“The two developments also reinforce the group’s strategy of expanding across the upstream, midstream, and downstream segments of the energy value chain while building a more diversified base of recurring income,” it said.
Dialog achieved first gas production at the Salbiah field on Oct 27, 2026, broadly in line with its second-quarter FY27 guidance.
The group also reached a final investment decision for the Fatimah gas field, its second development under the Baram Junior Cluster small field asset production sharing contract (PSC).
The Fatimah project involves total capital expenditure of US$211 million (RM860 million).
Dialog holds a 70 per cent participating interest in the PSC, while Petroleum Sarawak Exploration & Production (PSEP) owns the remaining 30 per cent.
RHB Research said the Salbiah field has estimated gas reserves of about 140 billion cubic feet (BCF), with the Fatimah field expected to have a similar reserve base.
This brings the combined estimated reserves to approximately 280 bcf, of which 196 bcf is attributable to Dialog.
“Management indicated that the Fatimah field is expected to deliver a low-to-mid-teens project internal rate of return.
“Based on the group’s 70 per cent participating interest, we estimate its proportional share of the US$211 million development cost at US$147.7 million or RM602 million.
“The successful appraisal results confirm the field’s commercial viability, paving the way for its development,” it added.
The firm maintained its earnings forecasts for FY27 to FY29, as the commencement of production at Salbiah was largely anticipated, while Fatimah remains in the early stages of development.
RHB Research reiterated its “Buy” call on Dialog and retained its target price at RM2.44.