Hibiscus to buy 20% permit stake

PETALING JAYA: Independent exploration and production company Hibiscus Petroleum Bhd's 41%-owned HiRex Petroleum Sdn Bhd, has agreed to receive 20% stake in the VIC/P57 exploration permit from its Australian partner 3D Oil Ltd, in exchange for use of the Rex Virtual Drilling (RVD) technology to assess the best targets for drilling in Gippsland Basin off Victoria.
In a press statement yesterday, Hibiscus Petroleum said in the head of agreement signed between 3D Oil, Carnarvon Hibiscus Pty Ltd, Althea Corporation Ltd and HiRex, a further 5% stake in the VIC/P57 exploration permit is to be transferred to Hibiscus Petroleum as part of the transaction.
HiRex is a joint-venture between Hibiscus Petroleum and the Singapore-listed Rex International Holding Ltd, as well as the licence holder of the proprietary RVD technology.
"We believe there to be several exploration opportunities within VIC/P57 and in partnership with Hirex , we hope to identify several high-impact drilling prospects. In addition, the possibility of full ownership of the economically viable West Seahorse licence gives us the option to advance plans to develop this proven field," Hibiscus Petroleum chief development officer Steve Dechant said.
Using the RVD technology would allow the VIC/P57 partners to assess the best targets for drilling.
RISC Operations Pty Ltd engaged by Hibiscus Petroleum in 2012, had estimated prospective resources of 11 million barrels of oil (mmboe) at Sea Lion, an exploration prospect in close proximity to the proven West Seahorse field.
Other exploration prospects in VIC/P57, including Felix, provide further upside.
"An exploration well is planned to be drilled in VIC/P57 in the first half of 2015 and advanced plans are in place to confirm a rig to undertake the drilling operations," it said.
In the second component of the agreement, Carnarvon Hibiscus has an exclusive option to increase its stake in the proven VIC/L31 West Seahorse oilfield from its current 50.1% to 100% stake at market value. The oilfield contains 6.5 million barrels of proven oil reserves and contingent resources of 1.5 million barrels of oil.
Under the final component of the agreement, Carnarvon Hibiscus will pay some US$7.5 million (RM24.2 million) to 3D Oil for its 49.9% stake in the Britannia rig, which is already 50.1% owned by by Carnarvon Hibiscus, thus providing the latter with 100% ownership of the rig.