Hibiscus’ Gemini prospect in North Sea a dry well

by **Cals** Wed 18 Mar 2015, 02:13

Hibiscus’ Gemini prospect in North Sea a dry well

By Foo Yen Ne / theedgemarkets.com | March 17, 2015 : 9:44 PM MYT

KUALA LUMPUR (March 17): Hibiscus Petroleum Bhd ([You must be registered and logged in to see this image.] Financial Dashboard)’s (Hibiscus) venture into its newly-secured PL338C license in the Gemini prospect well, has come to a dead end as it has been declared a dry well.

“We have been informed by the operator, Lundin Norway AS (Lundin) that the well drilled in the Gemini prospect (16/1-24) did not find hydrocarbons and it has been reported as a dry well,” said the company in a filing with Bursa Malaysia today.

However, Hibiscus (fundamental: 1.65; valuation:0.6) said the PL338C already has proven oil in the Rolvsnes prospect, which contains approximately 100 million barrels of recoverable oil.

"Lime Norway has further informed us that for a total cost of approximately US$2.5 million, it was able to secure a 30% interest in PL338C (subject to regulatory approval) which includes the costs of the well drilled in the Gemini prospect and a 30% interest in the Rolvsnes discovery," it added.

As to the oil discovery made in the Rolvsnes prospect, Hibiscus said it is expected that an appraisal well to further delineate the discovery will be drilled in the second half of 2015.

Hibiscus said a definitive decision to drill the appraisal well will only be made after Hibiscus’ jointly-owned entityLime Petroleum Norway AS (Lime Norway) has obtained regulatory approval to its proposed farm-in of PL338C.

To recap, Hibiscus’ jointly-controlled entity Lime Petroleum Norway AS secured a 30% stake in PL338C from the operator, Lundin, to increase its portfolio of licenses in the North Sea to 15 in February 2015. Lundin now controls 50% of the PL338C license, while OMV (Norge) AS has the remaining 20%.

At the time, it was said that PL338C license has an estimated gross unrisked prospective resources of 93 million barrels of oil, with a chance of geological success of 24%.

Previously, in July 2014, Lime Petroleum surrendered three licenses in the North Sea (PL509S, PL509BS and PL509CS), after the licenses hit their ‘drill or drop deadline’ in July 23, 2014. Further back, Hibiscus’ exploration of Masirah North in Block 50 Oman, through its stake in Lime Petroleum Plc, was suspended for safety reasons.

Nevertheless, Hibiscus had previously announced what it deemed a key achievement at its GA-South well in Oman, which, during a 48-hour test, found hydrocarbons flowing to the surface and achieved a light oil flow rate of up to 3,000 barrels per day.

Hibiscus’ share has declined 48.34% in the last six months. The counter closed at 78 sen today, down 2 sen. This gives it a market capitalisation of RM707.2 million.

(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.)