Hibiscus Petroleum tables RM154m bid for UK North Sea asset


HIBISCUS Petroleum Bhd is expected to extend its presence in the UK via a US$37.5 million (RM153.75 million) production sharing deal that would add 30 million barrels in oil resources to the group.

Under a conditional sale and purchase agreement with Caldera Petroleum (UK) Ltd, the exploration and production company will acquire a 50% participating interest in two oil blocks under Production License P198 via its indirect wholly owned unit Anasuria Hibiscus UK Ltd (AHUK).

Hibiscus Petroleum MD Dr Kenneth Pereira (picture) said the proposed acquisition is a key component of its goal to secure 100 million barrels of (2P) reserves by 2021.

“Furthermore, the blocks are located in an area that is close to other discoveries and existing infrastructure.

“We look forward to working closely with the UK regulators, as well as with our new partner to optimally monetise the resources within these blocks and deliver shareholder value,” he said in a statement yesterday.

The two oil fields are located 250km northeast of Aberdeen in the UK North Sea and have an estimated 60 million barrels of oil in gross contingent (2C) oil resources, of which Hibiscus Petroleum will be entitled to half.

Currently, Hibiscus Petroleum’s 2C oil resources are 38.5 million barrels, while its proved and probable (2P) oil reserves are 46 million barrels.

Expected to be completed by Oct 16 this year, the acquisition is to be fully funded via internally generated funds and is subject to written consent being obtained from the UK Oil and Gas Authority.

The proposed exercise comes at a time when crude oil prices are trending higher, making upstream development works and investments more profitable and attractive respectively.

Hibiscus Petroleum is already present in the UK North Sea via its indirect unit AHUK which holds 50% joint-operating interests in the Teal, Teal South and Guillemot A fields, as well as a 19.3% non-operating interest in the Cook field.

Collectively, the oil fields are known as the Anasuria Cluster and produced an average of 3,375 barrels of per day (bpd) from April to June this year.

The company also completed the US$25 million acquisition of a 50% stake in the 2011 North Sabah Enhanced Oil Recovery Production Sharing Contract in April this year, providing the group a second revenue- generating asset alongside the Anasuria Cluster.

Hibiscus Petroleum has operational rights in the production sharing contract until 2040 and the Sabah asset had a net oil production of 5,903 bpd from April to June this year.

The company is also present in Australia via the VIC/L31 production licence and VIC/P57 exploration permit, as well as its investment in 3D Oil Ltd. These assets have yet to commence production.

For its fiscal year ended June 30, 2018, Hibiscus Petroleum recorded a net profit of RM203.71 million and a revenue base of RM394.34 million — up 92% and 50.9% year-on-year respectively.