Hot Stock Hibiscus continues to fall after failed well drill

by **Cals** Mon 16 Nov 2015, 21:23

Hot Stock

[size=28]Hibiscus continues to fall after failed well drill

By Kamarul Anwar / theedgemarkets.com | November 16, 2015 : 3:50 PM MYT

KUALA LUMPUR (Nov 16): Hibiscus Petroleum Bhd ([You must be registered and logged in to see this image.] Valuation: 0.90, Fundamental: 1.55)'s free fall continued today to a new low of 25.5 sen after the short selling two weeks ago, after announcing there was no commercially viable oil in the latest well it drilled.

At 3.17pm, Hibiscus was the fourth most active stock on Bursa Malaysia and was trading at 26 sen, down 3 sen or 10.34%, after some 49.21 million shares were traded.

Year to date, the stock has fallen 59 sen or 69.41% from 85 sen.

Remisiers have taken note of Hibiscus' high-risk business operations; previously a special purpose acquisition company, it is now an independent oil and gas (O&G) exploration and production company that specialises in the acquisition and development of O&G assets.

"There is a lot of investment required in O&G exploration. But when there's no oil, why should people invest in the company?" opined SJ Securities senior remisier Goh Kay Chong.

The company, which also announced it failed to discover petroleum in the Haribo prospect in the Norwegian North Sea in July, has exhausted its cash to RM5.93 million as at June 30, 2015. It had raised some RM235 million in its initial public offering in 2011.

Last Monday (Nov 9), Hibiscus suspended its shares to make way for a series of announcements — with one of them being the results of its drilling at the Sea Lion-1 well. It had said then it would know the results of the assessment of movable hydrocarbons in the well sometime later in the week.

Two days later, Hibiscus confirmed no commercial hydrocarbons "were encountered in Sea Lion-1 well", which was in offshore Australia.

"Forward operations are to plug and abandon the Sea Lion-1 well and to demobilise the West Telesto drilling rig from the site," said Hibiscus in a press statement.

The company today said the well has been closed and abandoned.

(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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