KUALA LUMPUR (Apr 1): Hibiscus Petroleum Bhd announced that its 35%-owned entity Lime Petroleum Norway AS (Lime Norway) is increasing its stake in Norwegian license PL616 from 5% to 15%.

In a press statement this evening, Hibiscus Petroleum said Lime Norway has executed an agreement with Skagen44 AS to acquire an additional 10% interest in PL616.

"The transfer of this additional stake is subject to regulatory approval, and upon completion, will increase Lime Norway's interest in the license to 15%," it said.

It also noted that Lime Norway had earlier acquired a 5% stake in PL616 from North Energy ASA in September 2013.

"Following the transfer of the additional interest to Lime Norway, the parties in the license will be Edison Norge AS (operator) holding 25%, Noreco Norway AS (Noreco) with 20%, Concedo ASA (Concedo) having 20%, North Energy with 15%, Skagen44 holding 5%, and Lime Norway owning the remaining 15%," said Hibiscus Petroleum.

The independent O&G group further said that the license is located in the southern part of the North Sea on the borders of Denmark and the UK in water depth of some 67 metres.

The license is located in the southern part of the North Sea on the borders of Denmark and the United Kingdom in water depth of some 67 metres, according to Hibiscus Petroleum (fundamental: 1.65; valuation: 0.6).

"The Haribo prospect within the concession is scheduled to be drilled in June 2015 using the rig Transocean Searcher," the group said.

"The exploration potential is estimated by the operator at some 150 million barrels of oil (mmbo), of which 65% is in PL616. The geological chance of success is estimated at 25% by the operator. The reservoir target is reworked chalk on the west flank of the Valhall-Hod ridge," it added.

Hibiscus Petroleum also reiterated Lime Norway's plan to start drilling PL616 in June this year.

"In line with our efforts to undertake exploration activities in a lower cost environment brought about by lower oil prices, we are looking forward to the drilling of PL616," the group's managing director Dr Kenneth Pereira said in the statement today.

"We are cautiously positive about this prospect in terms of geological assessments conducted coupled with an established and well-regarded operator at the helm," he added.

Lime Norway is a wholly-owned subsidiary of Lime Petroleum Plc, in which Hibiscus Petroleum owns a 35% stake. The remainder are held by Rex Middle East Ltd (56.4%) and Schroder & Co Banque SA (8.6%).

To-date, Lime Petroleum had injected about US$35 million (RM129.44 million) into Lime Norway. Lime Norway has also secured an enlarged NOK700 million financing facility with Skandinaviska Ensklida Banken AB (SEB) to fund its drilling programme in 2015.

Hibiscus Petroleum fell half sen or 0.65% to 76 sen today, with 1.39 million shares traded. The price gives it a market capitalisation of RM699.8 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.)