not vested
Hibiscus eyes stake in Sabah oilfield
Company wants to acquire Shell stake for RM105mil
PETALING JAYA: Hibiscus Petroleum Bhd is proposing to buy Shell’s 50% block of participating interests in a production sharing contract (PSC) for an oilfield cluster in Sabah, for a purchase consideration of US$25mil (RM104.73mil) .
This will be the first local oilfield project for the company after graduating from a special purpose acquisition company, or SPAC, to a full-fledged oil and gas exploration company in 2012.
The company said in a stock exchange filing that wholly-owned subsidiary, SEA Hibiscus Sdn Bhd, had entered into a conditional sale and purchase agreement with Sabah Shell Petroleum Co Ltd and Shell Sabah Selatan Sdn Bhd was entered into for the entire participating interests in the 2011 North Sabah Enhanced Oil Recovery PSC.
Shell’s interest, which also included operatorship responsibilities, would be transferred to the SEA Hibiscus through a transfer of operatorship programme under the deal.
“This acquisition is in line with the growth strategy of the group to invest in profitable development and producing business operations in our identified core geographical areas of interest,” Hibiscus managing director Dr Kenneth Pereira said.
He said the acquisition will provide the company with immediate access to proven and probable oil and gas reserves with future potential upside.
The acquisition, which was expected to be completed next year, remained subject to regulatory approval of national oil company Petroliam Nasional Bhd and the consent of its unit Petronas Carigali Sdn Bhd, which owns the remaining 50% interests in the PSC.
Hibiscus said it would finance the purchase consideration through internally generated funds of the company and external financing/credit facility.
Hibiscus shares rose 2.5 sen to close at 26.5 sen yesterday.
The 2011 North Sabah Enhanced Oil Recovery PSC - which comprised four producing oil fields in the South China Sea, off the coast of Sabah – produces over 16,000 barrels of oil per day and have an estimated remaining developed reserves of 62 million barrels as of April 2016, according to independent technical valuer RISC Operations Pty Ltd.
The PSC has production rights until 2040 with identified future development opportunities. “Once resources are channeled towards identified future development opportunities already identified by the sellers, the incremental 2C resources which may be exploited is estimated to be up to 79 million barrels,” Hibiscus said.
Source: The Star