Hibiscus in 2nd bid for Newfield's M'sian assets

Hibiscus in 2nd bid for Newfield's M'sian assets
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Wednesday, 21 August 2013 10:18

KUALA LUMPUR: Malaysia's first special purpose acquisition company (SPAC), Hibiscus Petroleum Bhd, said it has been shortlisted for a second round of bidding for Newfield Exploration Co's assets in the country.

Hibiscus managing director Dr Kenneth Pereira told a press conference yesterday the submission must be made by Sept 26.

"We don't know exactly how many companies have been shortlisted, but it is only a handful out of about 60 that have expressed interest in bidding," said Pereira.

He said Hibiscus plans to acquire Newfield's Malaysian assets.

Newfield is exploring the sale of older and less productive oil and gas (O&G) fields, including those in Malaysia and China, investing closer to its American home market.

According to Reuters, Newfield is the fourth largest oil producer in Malaysia with its fields accounting for 39% of the revenue in 2012.

Pereira said Hibiscus expects to generate revenue from its Australian venture by 2015.

However, should its two oil well drills in Oman bear fruit, Hibiscus will register a profit at the end of next year, he said.

"These coming months will be a crucial period for us as the Oman wells are the first to use our Rex TECHNOLOGY []. If it is successful in detecting oil, many O&G players will take notice of the technology," Pereira said after the company AGM yesterday.

The Rex technology package consists of Rex Gravity, Rex Seepage and Rex Virtual Drilling. It is exclusively owned by Hibiscus' jointly controlled entity Lime Petroleum plc.

According to Hibiscus chairman Zainul Rahim Mohd Zain, the virtual drilling is twice more effective in detecting oil than the conventional seismic drilling method.

The company will begin drilling two wells in the Block 50 Oman concession in the middle of October, according to a statement.

Hibiscus has awarded a drilling rig contract, effective for a minimum period of 50 working days, to Aban 7 Pte Ltd.

The two selected wells, Masirah North North #1 and Masirah North East #1, have been estimated to have prospective resources of about 160 million barrels. Another contingency well, GA South, has been earmarked for drilling if the two wells do not see successful discoveries.

Pereira said the value of the oil in the ground from the two wells could be about US$6 (RM20) a barrel, translating into US$960 million.

Hibiscus has a 22% effective stake in the Oman venture through an acquisition of a 35% stake in Lime, which has a 64% participating interest in the Oman Block 50 concession.

Hibiscus also has a 13% stake in Australia-listed 3D Oil Ltd. The company previously signed a conditional farm-in agreement with 3D Oil for the acquisition of 50.1% of the VIC/P57 concession area in Australia.

The concession area includes the proven West Seahorse oilfield and identified exploration prospects Sea Lion and Felix.



This article first appeared in The Edge Financial Daily, on August 21, 2013.