Hibiscus Petroleum eyes alternative for Aussie assets

By NG MIN SHEN & MARK RAO

Hibiscus Petroleum Bhd is open to share its Australian-based infrastructure as it may opt to defer the final investment decision (FID) for its currently idle assets.

“There are opportunities to see if we can share infrastructure with others, so we would like to explore that opportunity at this point of time before deciding on a development concept,” MD Dr Kenneth Gerard Pereira told the press at Invest Malaysia 2019 in Kuala Lumpur yesterday.

He said the matter is expected to be decided within the next two to three years.

For now, the firm’s Australian assets are idle and reported a loss after tax of RM900,000 for the second quarter ended Dec 31 last year (2Q19).

Hibiscus Petroleum is present in the West Seahorse field in Australia via its VIC/L31 production licence, while undertaking other exploration prospects in the country within the VIC/P57 exploration permit.

The company also invested in 3D Oil Ltd which has interests in exploration permits in the offshore Gippsland and Otway Basins of southeast Australia.

However, Hibiscus Petroleum’s limited access to capital means projects that deliver larger economic benefits will be implemented ahead of those which promise lower levels of return.

Consequently, management may defer seeking FID or find an alternative solution for its offshore development in Australia due to the expected capital requirements for low risk and identified projects in the UK and Sabah.

This comprises the Anasuria Cluster located in the UK North Sea and its production sharing contract for North Sabah.

The pure-play oil and gas (O&G) exploration and production company targets to achieve an average production rate of 20,000 barrels of oil per day (bpd) and 100 million barrels of oil in net proven and probable reserves and entitlement by 2021.

Pereira said the company has the potential to achieve this organically, but remains open to new acquisitions.

Hibiscus Petroleum is on track to drill its second side-track well in Anasuria, namely the Guillemot A GUA-P1, which should unlock some 1.7 million barrels of oil from the asset’s current net proven and probable oil reserves.

Average production from the UK-based asset is also expected to rise to 5,000bpd in 2020.

This will bring total production for the group to approximately 10,000bpd that year based on the current 4,500bpd to 5,000bpd net production achieved from North Sabah. Thus, the company would need to double that amount by 2021.

For 2Q19, Hibiscus Petroleum improved its net profit to RM50.1 million from RM11.04 million a year ago — due to additional contributions coming in from North Sabah, coupled with higher production from Anasuria.

The company sold a total of 568,000 barrels of crude oil that quarter, consisting of approximately 274,000 barrels from Anasuria sold at an average US$58.08 (RM236.39) per barrel and 294,000 barrels from North Sabah sold at US$71.30 per barrel.

Pereira said the company is comfortable at the current oil price range of between US$65 and US$70 per barrel as it provides a stable environment for the company to operate in.

At Dec 31 last year, Hibiscus Petroleum remained debt-free with a RM203.8 million cash balance.

Meanwhile, Serba Dinamik Holdings Bhd is tendering for approximately RM20 billion worth of contracts in 2019 as the service provider for the energy industry aims to grow its revenue by 15% to 20% that same year.

Its group CEO Datuk Dr Mohd Abdul Karim Abdullah said the company is currently sitting on a RM8.3 billion orderbook, which is expected to rise to RM10 billion this year.

“We believe RM10 billion would be a good figure. It is achievable and will help put the company on a good, strong foundation,” he told the press at the same event.

The company posted a 25.9% year-on-year jump in net profit to RM387.9 million for the fiscal year ended Dec 31, 2018 (FY18), on the back of stronger revenue at RM3.28 billion — up 20.6% from RM2.72 billion in FY17.

This was attributable to higher operation and maintenance works recognised over the year which offset the lower turnover brought in from engineering, procurement, construction and commissioning works.

Mohd Abdul said the company, which already has a strong presence in the Asian and African markets, is looking to reduce its reliance on O&G-related revenue which makes up between 80% and 85% of total group revenue.

“We would like to reduce dependency on O&G. That is why we are looking at the power generation industry to come in and contribute bigger,” he said.

“We are working on that and, hopefully, 2019 can help us to increase our contributions from the power generation industry.”