KUALA LUMPUR (Dec 12): Hibiscus Petroleum Bhd has completed its acquisition of two North Sea blocks — one of which is the Crown discovery — in the UK today.

The group said in a statement today that its indirect wholly owned Anasuria Hibiscus UK Ltd (AHUK) completed the acquisition from the United Oil & Gas PLC and Swift Exploration Ltd for a cash consideration of up to US$5 million. The blocks are identified as 15/18d and 15/19b (License P2366).  

This follows the receipt of approval from the UK's Oil and Gas Authority for the reassignment of the blocks' licence to AHUK, and the appointment of AHUK as exploration operator on Dec 4.

“In accordance with the terms of the conditional Sale & Purchase Agreement executed on October 7, 2019, a further US$0.9 million has been paid upon achieving completion of the acquisition,” the group added.

The blocks are located 250km offshore, northeast of Aberdeen, Scotland. The Crown Discovery, it said, comprises 2C contingent resources that range between 4 million to 8 million barrels of oil, subject to an independent 3rd party expert assessment.

The blocks are located 12km south-east of AHUK’s existing Marigold field, which together with the Sunflower field was acquired by the group in October last year. AHUK holds a 50% operating interest in License P198 for Blocks 15/13a and 15/13b, which contains the Marigold and Sunflower oilfields, respectively.

It also has 50% joint-operating interests in the P013 licence comprising the Teal, Teal South and Guillemot A fields, as well as 19.3% non-operating interest in the P185 licence comprising the Cook field. These fields, which produce oil and gas to the Anasuria Floating Production Storage and Offloading facility, are collectively known as the Anasuria Cluster.

"Subject to further milestones being achieved post SPA completion, an additional sum of US$3 million will be paid within 7 business days of the actual date of approval of the Marigold Field Development Plan (FDP) which includes the development of the Crown discovery as part of the overall Marigold 2 development (FDP Approval), by the relevant United Kingdom regulatory authority, which is expected to be received by the end of 2020.

"However if FDP Approval is not achieved, or if the Marigold FDP submitted does not include the development of the Crown discovery, AHUK may, at its discretion, proceed with the US$3 million payment or transfer License P2366 back to the Sellers at nominal consideration without any further payment obligation. In addition, up to US$1 million will be paid through an overriding royalty scheme once the Crown discovery has commenced production.

Given its proximity to Marigold, the contemplated development of Crown is based on a single well subsea tieback to the Marigold field," said Hibiscus.

Hibiscus shares closed 0.56% or half a sen lower at 88.5 sen today, giving it a market capitalisation of RM1.41 billion. The counter saw 4.2 million shares traded. The stock has declined about 16% in the past 12 months.