KUALA LUMPUR (Nov 28): The local bourse’s sole pure-play upstream oil and gas (O&G) producer Hibiscus Petroleum Bhd (KL:HIBISCS) may see the entry of new substantial shareholders.

In a filing with the stock exchange on Friday, Hibiscus said it is in separate talks with three “reputable independent parties”, two of which being oil companies, for a potential long-term strategic investment in the group.

The potential exercise being explored includes a share and convertible securities deal in exchange for an injection of O&G-producing assets and cash, it noted.

“Upon successful completion, the relevant investors are expected to become significant shareholders in Hibiscus,” it said. If discussions lead to the execution of a definitive agreement, necessary shareholder approval will be sought accordingly.

The group underlined that discussions remain at an early stage of evaluation and there is no “assurance or certainty” that they will result in an investment by any of the parties.

Non-disclosure agreements have been inked with all three parties, thus their identities cannot be disclosed at this juncture, it noted.

Hibiscus, which began its publicly-listed journey as a special-purpose acquisition vehicle in 2011, has two substantial shareholders currently.

Its largest shareholder, Mettiz Capital founder Datuk Michael Tang Vee Mun, controls a 13.6% stake, followed by managing director Datuk Dr Kenneth Gerard Pereira’s 10.7%.

Hibiscus posted a 73.4% drop in net profit for the first quarter, but upgraded its sales volume guidance for the financial year.

Net profit for the three months ended Sept 30, 2025 (1QFY2026) fell to RM20.1 million from RM75.6 million a year earlier, as revenue dropped 9.3% to RM433.06 million from RM477.4 million.  

The group declared a two sen dividend, payable on Jan 27, and guided a full-year payout target of eight to 10 sen per share, subject to oil prices ranging US$65 (RM268.36) to US$75 per barrel.

Its top line was dragged by its Malaysian operations, as the PM3 Commercial Arrangement Area saw the absence of crude oil offtake plus higher expenditure related to planned annual maintenance.

The bottom line was further weighed by higher expenses related to maintenance plus income taxation versus deferred taxation recognised in the same quarter a year earlier.

Operations in Sabah saw lower sales volume coupled with lower realised prices, while its UK segment sold more oil with higher average prices. Operational metrics — including average operating expenditure per barrel, uptime and net oil production rate — improved year on year.

Looking ahead, Pereira said the group is optimistic on the progress of the Teal West development drilling programme in the UK, maintaining expected first oil in mid-2026.

“Preliminary subsurface data indicate that its 2P [proven and probable] oil and gas reserves exceed current estimates, further strengthening our resource base and production,” he said.

Coupled with its current operational performance to date, Hibiscus said it has upped its offtake guidance for the financial year to 9-9.4 million barrels of oil equivalent (mmboe) from 8.8-9.3 mmboe previously. The group sold 8.9 mmboe in FY2025.

Shares in Hibiscus ended one sen or 0.69% lower at RM1.44, valuing the group at RM1.06 billion.