KUALA LUMPUR (Dec 11): Hibiscus Petroleum Bhd rose 1.28% in active trade at mid-morning today after it had last Friday announced plans to undertake a free warrant issue on the basis of one for every five existing ordinary shares held on an entitlement date to be determined later.

At 10.30am, Hibiscus was up 1 sen to 79 sen with 12.37 million shares traded. The stock had earlier risen to a high of 80.5 sen.

Public Investment Bank Bhd Research said the corporate exercise would essentially expand Hibiscus' share base by 20% upon full exercise of the said warrants.

In a note today, the research house said the instruments will carry a three-year tenure, and with the exercise price also having a fixed 6 sen step-up on each of the anniversary dates from the date of the first issuance.

"While potentially dilutive, we are leaving our sum-of-parts derived RM1.06 valuation unchanged for now given the potential uplift from the conversion of 2C to 2P reserves for the North Sabah field, which we have not accounted for in our computations.

"Our outperform call on Hibiscus is affirmed, underpinned by ongoing contributions from its Anasuria Cluster in the North Sea (valued at 58 sen per share), and the on-coming contributions from the North Sabah EOR field (currently valued at 48 sen per share) which has recently taken a significant step toward conclusion," it said.