Hibiscus active on Petronas’ nod for stake sale

PETALING JAYA: Shares of Hibiscus Petroleum Bhd was the second most actively-traded stock yesterday, following news that Petronas Carigali Sdn Bhd has agreed to the sale of a 50% stake in the North Sabah enhanced oil recovery production-sharing contract by Sabah Shell Petroleum Co Ltd and Shell Sabah Selatan Sdn Bhd for US$25mil (RM102mil).

The counter closed four sen higher at 85 sen, with 80.55 million shares traded.

The share price hike yesterday came following a one-hour trading halt from 9am, when Hibiscus announced that Petronas’ conditions had been clarified and agreed by the parties.

Barring any unforeseen circumstances, Hibiscus expects the proposed acquisition to be completed on March 31 next year.

Under the terms of a conditional agreement signed in October last year, Hibiscus’ indirect unit SEA Hibiscus Sdn Bhd would buy the 50% stake from Shell and assume the role of operator of the production-sharing contract (PSC).

The PSC comprises four producing oil fields and associated infrastructure as well as pipeline infrastructure and the Labuan crude oil terminal. Total oil production averaged about 18,000 barrels a day in 2015. The PSC provides long-term production rights until 2040 with identified future development opportunities.

According to Hibiscus in a statement earli- er this month, the acquisition is in line with the company’s strategy to invest in profitable development and producing business operations in core geographical areas of interest.

It added that the PSC could provide the company with immediate access to proven and probable oil and gas reserves with future potential upside.

Hibiscus’ main operating asset, a 50%-stake in the Anasuria Cluster – a concession in the North Sea off Britain’s northern coast – was acquired in March 2016.

It believes oil prices will increase or remain at the current level in the near to medium term, supporting its performance as production increases in the Anasuria Cluster.