Malaysia-based Hibiscus Petroleum and Australia’s Hydra Energy entered into a deal that will see Hibiscus acquire 100% of the outstanding shares of Hydra Energy at “fair market value.”
The addition of Hydra Energy and its portfolio of discovered oil fields offshore Australia is set to increase Hibiscus Petroleum’s 2P reserves by 15-17 MMbbl, in addition to providing exploration upside, the two companies said in a joint statement.
Should shareholder and regulatory approvals be met, the deal will provide Hibiscus Petroleum with a significantly increased reserve base in Australia, and Hydra Energy will become a wholly owned subsidiary of Hibiscus Petroleum.
The deal will be satisfied through the issue of new Hibiscus shares at an issue price to be determined, following the fair market value of Hydra Energy that will be conducted by an independent valuer.
Both Hydra and Hibiscus boards support the proposed deal, and expect it to be complete by Q1 2016.
Hydra has interest in seven operated petroleum licenses in theCarnarvon Basin, offshore North West Australia. Of the seven, four have discoveries of 15-17 MMbbl net to Hydra, meaning that upon closing of the deal, Hibiscus Petroleum’s net 2P / 2C Australian oil resource base would increase from 8 MMbbl to 23-25 MMbbl, and its global net 2P / 2C resource base would be about 47 MMbbl.
“The assets we are currently investing must be in production or have near term potential to be revenue generating. The Hydra Energy assets fall firmly in that category. They are also located in a geopolitically stable area where we are already present. These assets will give us scale in two major producing basins in Australia and will allow us to build a long-term sustainable business there,” Hibiscus Petroleum managing director Dr. Kenneth Pereira said.
Currently, Hydra is owned by Global Natural Resource Investments (GNRI) with 97% stake, with the remaining 3% being held by Hydra Energy management.
Another deal is also in the works with Hydra Energy management, GNRI and Hibiscus Petroleum management on a non-equity based US$20 million financing facility to underpin the combined companies capital requirements. This facility will be used to fund existing operational commitments, and also allows Hibiscus Petroleum to explore new business opportunities.
Also this week, Hibiscus announced its Sealion-1 well offshore southeast Australia found no commercial hydrocarbon pay, and is in the process of being plugged and abandoned. The well, which saw a weather delay, was spudded in late October.
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