Kuala Lumpur: Hibiscus Petroleum’s wholly-owned subsidiary, Timor Hibiscus, has executed a share sale agreement for the acquisition of 100% of the shares in Talisman Resources, a wholly-owned subsidiary of Toronto Stock Exchange and New York Exchange listed, Talisman Energy Inc. The assets of the company acquired include a 25% stake in the Kitan producing oil field. Based on the current estimates, Hibiscus expects the Kitan oil field to contribute significant net cash to the company in the second half of 2014. At current oil prices, this will allow Hibiscus to book its first operating profit in 2014.
The purchase price for the acquisition is $18m.
The Kitan field was discovered in 2008 and started production in 2011. Wood Mackenzie has estimated 17m barrels of remaining reserves on 1 January 2014 (4.25m barrels net to Hibiscus) and that the average production rate in 2014 is expected to be 10,000 barrels of oil per day (2,500 barrels of oil per day net to Hibiscus).
The Kitan oil field is currently being operated by Eni, the Italian integrated energy company. The field is in the Bonaparte Basin within the Australia-Timor Leste Joint Petroleum Development Area (JPDA) approximately 550km northeast of Darwin, Australia. The field is developed by a subsea production system with three subsea wells tied back to the Glas Dowr Floating Production Storage Offloading Unit (FPSO). Eni owns a 40% stake in the asset while the remaining 35% is held by the Japanese oil and gas exploration & production (E&P) company, Inpex. A number of infill drilling and additional well tieback opportunities are under consideration.
“The acquisition of a producing asset represents a key milestone under Hibiscus Petroleum’s portfolio balancing strategy. After evaluating many producing assets over the course of the past three years, we believe we have finally found a target that has a manageable risk profile with many areas of upside potential at a reasonable price. We also look forward to working with reputable international E&P companies as partners in extracting further value from this asset. We bid for this asset using certain base assumptions while taking into consideration potential value accretion from future development and infill drilling projects,” said Dr Kenneth Pereira, managing director of Hibiscus Petroleum. [23/06/14]