KUALA LUMPUR: Hibiscus Petroleum Bhd’s venture into its newly-secured PL338C licence in the Gemini prospect well has been declared a dry well.

“We have been informed by the operator, Lundin Norway AS that the well drilled in the Gemini prospect (16/1-24) did not find hydrocarbons — and it has been reported as a dry well,” said the company in a filing with Bursa Malaysia yesterday.

However, Hibiscus (fundamental: 1.65; valuation: 0.6) said that the PL338C has already proven oil in the Rolvsnes prospect, which contains approximately 100 million barrels of recoverable oil.

“Lime Norway has further informed us that for a total cost of approximately US$2.5 million, it was able to secure a 30% interest in PL338C [subject to regulatory approval] which includes the costs of the well drilled in the Gemini prospect and a 30% interest in the Rolvsnes discovery,” it said.

Hibiscus said it expects that an appraisal well — to further delineate the discovery at the Rolvsnes prospect — will be drilled in the second half of 2015.

A definitive decision to drill the appraisal well will only be made after Hibiscus’ jointly-owned entity Lime Petroleum Norway AS (Lime Norway) obtains regulatory approval to its proposed farm-in of PL338C.

Lime Norway secured a 30% stake in PL338C from the operator, Lundin, to increase its portfolio of licences in the North Sea to 15 in February. Lundin now controls 50% of the PL338C licence, while OMV (Norge) AS has the remaining 20%.

At the time, it was said that the PL338C licence has an estimated gross unrisked prospective resources of 93 million barrels of oil with a chance of geological success of 24%.

In July last year, Lime Petroleum surrendered three licences in the North Sea (PL509S, PL509BS and PL509CS) after the licences hit their “drill-or-drop deadline” on July 23.

Further back, Hibiscus’ exploration of Masirah North in Block 50 Oman through its stake in Lime Petroleum plc was suspended for safety reasons.

Nevertheless, Hibiscus had previously announced what it deemed a key achievement at its GA-South well in Oman, which, during a 48-hour test, found hydrocarbons flowing to the surface and the well achieved a light oil flow rate of up to 3,000 barrels per day.

Hibiscus shares have declined 48.34% in the last six months. Yesterday, the counter closed at 78 sen, down two sen. This gives it a market capitalisation of RM707.2 million.

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. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on March 18, 2015.