KUALA LUMPUR (Dec 5): Hibiscus Petroleum Bhd is focusing on its North Sabah asset acquisition, which is nearing completion, ahead of its overseas assets in the Bass Strait, Australia.

“Its about allocation of capital,” managing director Kenneth Gerard Pereira told reporters, after its 7th annual general meeting (AGM) here today.

“Let’s see how North Sabah goes. On the capital for [acquisition in ] North Sabah, we will make the necessary announcements accordingly.

“We also have [assets in] Australia in the back burner. For now, we want to complete and consolidate what we have in hand,” he said. “But we will look at Australia, that is our intention.”

Today, Hibiscus announced it has received unconditional consent from Petronas Carigali Sdn Bhd to acquire 50% stake in the North Sabah Enhanced Oil Recovery (EOR) production-sharing contract (PSC) from Royal Dutch plc for US$25 million, first proposed in October. 

Hibiscus has permits for exploration and production development license for multiple oil and gas prospects in the Bass Strait, Australia. Presently, bulk of the group’s revenue currently comes from oil produced at its Anasuria Cluster producing field in the UK.

The Anasuria Cluster has helped Hibiscus stay in the black for the last seven consecutive quarters, at a time when other oil production companies have underperformed. 

However, it is not including dividend payout in its agenda in the short term, said chairman Zainul Rahim Mohd Zain.

Answering questions on dividend payout, Zainul said the oil and gas group intends to reinvest its profit in the short term, in order to grow the business. 

“We would love to pay our shareholders dividend, but only when we can afford it,” Zainul said. He justified that the company is in a very capital-intensive business.

“I think the best thing to do is to ensure that the company is healthy, and demonstrate growth for the benefit of the shareholders,” Zainul said.

At Sept 30, 2017, Hibiscus’ cash and bank balances stood at RM31.99 million, down 41.3% from RM54.5 million as at June 30, 2017.

Back in May, Hibiscus proposed a private placement of 144.38 million shares to raise RM65 million, to meet near-term obligations and payments. In July, it said it is considering alternative sources of funding to maintain the buffer to meet its obligations.

At 2.22pm, shares of Hibiscus traded one sen or 1.39% lower at 71 sen, giving the oil and gas group a market capitalisation of near RM1.1 billion.