Spotlight on Hibiscus Petroleum
Published on: Wednesday, February 22, 2017
Kuala Lumpur: There is increased interest in Hibiscus Petroleum Bhd due to imminent regulatory approval for its propsed acquistion of a 50pc stake in four offshore oilfields in Sabah drom Shell.Hibiscus earkier announced it had entered into a conditional sale and purchase agreement with Sabah Shell Petroleum Company Ltd and Shell Sabah Selatan Sdn Bhd to acquire Shell's entire 50pc interest in the 2011 North Sabah enhanced oil recovery production-sharing contract (PSC) for US$25 mil (RM 111mil). The PSC comprises four producing oilfields namely, the St Joseph, South Furious, SF30, and Barton oilfields, and associated infrastructure such as pipeline infrastructure and the Labuan Crude Oil Terminal.
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The purchase is subject to regulatory approval of Petroliam Nasional Bhd (Petronas) and the consent of Petronas Carigali Sdn Bhd, a 50pc joint venture partner in the PSC. If approval is gained, the acquisition is likely to be completed in the middle of the year. Hibiscus managing director Kenneth Pereira declined to comment on the likelihood that Petronas will give its approval for the stake buy soon. "At this stage, we are not able to provide any information on this matte as it is the subject of strict confidentiality agreements. When we receive forma notice from the regulators of the decision, we shall make necessary approved disclosures;' he told FocusM.According to Publiclnvest, if approved, the upside for Hibiscus will be the increase in production capacity, estimated at an additional 9,000 barrels per day (bpd).
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In an investor briefing presention, the group says that over the next five years, Hibiscus aims to achieve a daily production rate of 20,000bpd, and 2P (proven + probable) reserves of 100 million barrels in, existing core asset areas. In the oil and gas sector, proven reserves have a reasonable certainty of being recovered, while probable reserves have less certainty in being recovered. Recoverable oil reserves are the amount of oil that can reasonably be recovered given current technical and economic conditions.
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Pereira says currently Hibiscus' production averages about 4,000bpd from its Anasuria asset. Production costs at the Sabah oilfield would be around RM55.10 per barrel, but Pereira says it will not be hedging future production in an effort to reduce exposure to oil price volatility. "We have not hedged any of our future production to-date as we believe that there is some upside to oil prices in the mid-term. At this time, we are working aggressively to keep unit operating costs as low as possible without comprising safety or harming the environment," he says. Hibiscus has said that over 271,000 barrels of oil produced from the various fields within the Anasuria cluster were, sold at a realised price of US$45.21 ( 200.76) per barrel. Current operating costs for the Anasuria asset as at September was. US$18.40 (RM81.71) per barrel of oil equivalent.For the first quarter ended Sept 30, Hibiscus posted an increase in net profit to RM80.3 mil, from RM4.7 mil in the previous corresponding quarter. Revenue also increased to RM54.7 mil from RM245,000 at the same time last year, mainly due to the sale of oil and gas products from the Anasuria cluster. As of Sept 30, its cash balances stood at RM17 mil, with zero gearing. Stay up-to-date by following Daily Express’s Telegram channel.
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