KUALA LUMPUR (June 14): Hibiscus Petroleum Bhd (KL:HIBISCS) is venturing into Brunei with the acquisition of gas-producing assets in that country.
In a statement on Friday, the company said its unit Simpor Hibiscus Sdn Bhd has entered into a conditional share purchase agreement (SPA) with TotalEnergies Holdings International BV to acquire a 100% interest in TotalEnergies EP (Brunei) BV (“TotalEnergies Brunei”) for US$259.4 million cash.
Hibiscus said the acquisition is for TotalEnergies Brunei’s 37.5% operated interest in the Block B Maharajalela Jamalulalam (MLJ) field, a high-quality gas asset located offshore Brunei.
The company said the asset was discovered in 1989 and has been producing gas and condensate since 1999.
It said the asset has long-term production rights of up to 15 years (expiring on Nov 23, 2039), if extended with the agreement of the joint venture parties.
Hibiscus said the asset is expected to add a net of up to 21.7 MMboe (million barrels of oil equivalent per day) to the group’s 2P (net oil reserves and resources), an increase of 36% from 60.9 MMboe to 82.6 MMboe as at Jan 1, 2024, while total daily net production of oil, condensate and gas is expected to increase by circa 7,865 boe per day, from 21,398 boe per day to 29,263 boe per day in CY2024.
It said this is expected to bring the gas production share of the group’s portfolio to almost 50%, in line with the group’s energy transition strategy of acquiring gas-weighted assets in stable regulatory jurisdictions.
The SPA is subject to receipt of the approval of shareholders of Hibiscus Petroleum.
Hibiscus Petroleum’s managing director Dr Kenneth Pereira said the company has been looking for the right opportunity to enter the Brunei energy industry for some time.
“The additional volumes from this transaction are material for Hibiscus Petroleum and will provide an uplift of nearly 86% to our gas production, while bringing us closer towards achieving our 2026 mission of growing the group’s net production to 35,000-50,000 boe per day.
“In addition, employees of TotalEnergies Brunei, who have been operating this asset safely and efficiently for many years, will be joining the group as part of the transaction. They bring with them a wealth of knowledge and experience,” he said.
Trading in the securities of Hibiscus was halted from 9am-5pm on Friday, pending the announcement. The company said trading in its securities would resume on at 9am on Tuesday (June 18).
Hibiscus was last traded at RM2.43, giving it a market capitalisation of RM1.94 billion. The stock hit a high of RM2.81 on Oct 20, 2023. It has fallen 4.3% year-to-date.
Meanwhile, the company's net profit climbed by 42.37% to RM101.81 million in the third quarter ended March 31, 2024 (3QFY2024), from RM71.51 million a year ago, driven by strong oil and condensate prices of over US$90 (RM421.68) per barrel.
Earnings per share stood at 12.71 sen — higher than the 8.88 sen recorded in the previous year.
Revenue jumped more than 15% year-on-year (y-o-y) to RM603.5 million from RM523.34 million.
Following the strong results, Hibiscus is targeting to pay a minimum total dividend of 7.5 sen per share for the financial year ending June 30, 2024 (FY2024).