KUALA LUMPUR: Hibiscus Petroleum Bhd, through its 35%-owned Lime Petroleum Norway AS (Lime Norway), has availed itself to a virtual drilling technology which will significantly increase the success rate of its oil and gas drilling.

The company said tests conducted by Lime’s partner in Norway, North Energy ASA, found that the virtual technology, known as Rex virtual drilling technology, has managed to repeatedly and accurately predict the presence or absence of oil without physically drilling a well.

“Lime has exclusive use of the Rex technology package for all concessions in the Middle East under the Lime group and in Norway on a project basis. The licensing agreement which gives Lime the exclusive use of the technology in 15 Middle East countries is for a period of five years from Oct 24, 2011, with automatic annual renewal thereafter,” Hibiscus Petroleum said in a statement yesterday.

Rex virtual drilling is a software-based tool which relies on the phenomenon of resonance in seismic data to detect hydrocarbon deposits and predict oil quality as well as in-place volumes. This technology is expected to increase the success rate of oil drilling which currently stands at 15%.

In addition to the virtual drilling, the Rex technology package also includes Rex Gravity and Rex Seepage, which are able to detect potential oil deposits using satellite information.

Hibiscus Petroleum, Malaysia’s first special purpose acquisition company (SPAC), said Lime targets to drill the first well verified by Rex virtual drilling in Block 50 in Oman sometime in the middle of this year.  Its development asset in Australia, VIC/P57, is expected to start production by end of 2014 or early 2015.

Lime has four concessions in the Middle East, namely RAK North Offshore and RAK Onshore in Ras Al Khaimah in the United Arab Emirates (UAE), Sharjah in the UAE and Block 50 in Oman.

It also has access to another four concessions in Norway which were subject to completion of certain conditions precedent in the transaction agreement.
The concessions in the Norwegian Continental Shelf (NCS), identified as PL 503 (Valberget), PL 518 (Zapffe), PL 526 (Vagar) and PL 530 (Heilo), were secured from North Energy.

Hibiscus Petroleum said Lime was pre-qualified by the Norwegian ministry of petroleum and energy to operate as an oil and gas player in Norway last month.

“This is a key milestone for us as it gives us the opportunity to operate alongside established E&P (exploration and production) companies,” said Hibiscus Petroleum managing director and Lime chairman Dr Kenneth Pereira.

Hibiscus Petroleum has been in the red since it was listed on July 25, 2011. For the 2012 financial year ended March 30, it posted a net loss of RM4.84 million on the back of RM7.96 million in revenue.

This article first appeared in The Edge Financial Daily, on March 20, 2013.