PETALING JAYA: Hibiscus Petroleum Bhd, which has earmarked about RM194.5 million for its oilfields in the Anasuria Cluster and North Sabah, has deferred development of its Australian asset until it secures more capital.
The group deems the West Seahorse field in Australia, as its most expensive asset to develop, due to its unit operating cost which is more or less twice the cost of Anasuria or North Sabah.
The cost to develop the asset is expected to range between US$50 million (RM206 million) and US$100 million (RM413 million).
The board which is expected to discuss on the means of raising capital for the Australian asset in the next few months, would take on a cautious approach, as capital raising is not particularly attractive when oil prices are volatile.
“We haven’t decided (on Australia yet). Right now we have a certain amount of money which we are ploughing into places where we will get the biggest benefits,” said the group’s managing director Kenneth Gerard Pereira at a media briefing today.
As at Sept 30, Hibiscus had a cash pile of RM288.13 million. In addition to securing capital, Hibiscus is also looking at ways of bringing the cost of development down.
“So we will probably spend in Anasuria something in the range of US$30 million. That is not yet sanctioned by the board but that is what seems to be the plan,” Pereira said.
The RM70 million allocation for North Sabah Production Sharing Contract is for the St Joseph Infill Drilling project being undertaken with Petronas Carigali Sdn Bhd on a joint venture basis, which has been sanctioned by its board.
The total capital commitment for the project, which received the approval of Petroliam Nasional Bhd in August, is anticipated to be about RM142.5 million. This will be equally shared by both partners.
Pereira said any additional funding requirement for the Anasuria and North Sabah will depend on oil prices.
On acquiring more assets, he said the group is always on the lookout but nothing has materialised so far. He added that the group will continue to scout for assets within the areas it is currently operating in.
Hibiscus, which has managed to keep operating expenditure per barrel of oil (opex/boe) at below US$20, said it will have to tighten its belt and keep cost as low as possible if oil prices go down to below US$40.
The group is also looking to step up production to 10,000 to 12,000 barrels per day (bbls/day) in 2019 from the current 9,000 bbls/day.
Source: The Sun Daily