KUALA LUMPUR (Aug 6): Hibiscus Petroleum Bhd is acquiring a 50% stake in Shell UK Ltd, Shell EP Offshore Ventures Ltd (Shell) and Esso Exploration and Production UK Ltd (Esso) in the Anasuria Cluster of oil and gas (O&G) fields for US$52.5 million or RM199.1 million.
It has jointly entered into conditional sale and purchase agreements (SPAs) with Ping Petroleum Ltd, who will acquire the remainder 50% interest in the same, to effect the acquisitions, effective Jan 1, 2015.
Ping is an independent upstream company that focuses on shallow water offshore production and development opportunities in Southeast Asia.
According to a joint statement from Hibiscus and Ping today, the Anasuria Cluster is located approximately 175km east of Aberdeen in the UK Central North Sea and comprises a 100% interest in three producing fields in the cluster, namely Teal, Teal South, Guillemot A, and a 38.65% stake in Cook, together with their related field facilities.
The assets have a proven and producing resource base which provides a platform for further development, the statement read.
“A number of incremental development and exploration opportunities exist within the license areas, which are expected to generate significant incremental value in the medium term,” it said.
The acquisition also involves the Anasuria floating production, storage and offloading (FPSO) unit, and related equipment, with potential for future tie-ins.
It said the acquisition is subject to regulatory approvals and third party consent, including those of the UK government and Hibiscus’ shareholders.
Hibiscus managing director Ken Pereira said the acquisition will complete the company’s strategy of acquiring a balanced portfolio of assets which includes exploration, development and producing assets within five years of its listing.
“We will be able to cut our teeth as operator in conjunction with Ping in one of the world’s foremost oil and gas production basins. The Anasuria cluster has development potential for a company of the size of Hibiscus and provides us with an excellent foundation upon which we can build a significant North Sea presence,” he added.
“The partners are confident that the acquisition will create significant value for their respective shareholders and [the] UK government,” the statement further read.
Meanwhile, according to Hibiscus’ filing to Bursa Malaysia, it intends to fund the initial consideration for Hibiscus’ portion of the acquisition, which is US$30 million or RM113.8 million, through a loan facility and internally generated funds from the Anasuria Cluster from Jan 1 to completion of the SPAs.
The deferred consideration will be funded through internally generated funds from the Anasuria Cluster.
The breakdown of the source of funding, however, will only be fixed later, it said.
The proposed acquisition is expected to be completed by the first quarter of 2016, and is expected to contribute positively to the earnings of the Hibiscus Group for the financial year ending June 30, 2016.
“The effects of the proposed acquisition on the future earnings and/or EPS (earnings per share) of the Hibiscus Group would depend on, amongst others, the future performance of the Anasuria Cluster and the funding costs associated with the borrowings to be taken for the proposed acquisition,” it added.
Trading of Hibiscus' (fundamental: 1.65; valuation: 0.3) shares has been suspended for one trading day from 9am today, pending the release of this announcement. It last closed at 87 sen, for a market capitalisation of RM823 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.)