Polo Resources Ltd said investee company Hibiscus Petroleum Berhad has reported that its indirect wholly-owned subsidiary, SEA Hibiscus Sdn Bhd, has entered into a conditional sale and purchase agreement with Sabah Shell Petroleum Company Limited and Shell Sabah Selatan Sdn Bhd (together, Shell).
This would see it acquire Shell's entire fifty percent participating interests in the 2011 North Sabah Enhanced Oil Recovery Production Sharing Contract ("PSC") for a purchase consideration of $25m.
Shell's interest also include operatorship responsibilities which would be transferred to SEA Hibiscus through a transfer of operatorship program.
This acquisition is expected to complete in 2017 and is subject primarily to obtaining regulatory approval of Petroliam Nasional Berhad ("PETRONAS") and consent of Petronas Carigali Sdn Bhd ("Petronas Carigali"), a fifty percent joint venture partner in the PSC.
The PSC comprises of four producing oil fields and associated infrastructure; i.e. St Joseph, South Furious, SF30, and Barton oilfields which are located in a key hydrocarbon province in Malaysia and have delivered reliable production since coming onstream in 1979.
The PSC also contains pipeline infrastructure and the Labuan Crude Oil Terminal, an onshore processing plant and oil export terminal.
The PSC provides long-term production rights until 2040 with identified future development opportunities expected to add incremental 2P/2C resources up to 79 million barrels, this bodes well for the increased trajectory of Hibiscus Petroleum into its next milestone of growth.
The fields are reported by independent technical valuer, RISC Operations Pty Ltd to be producing over 16,000 barrels of oil per day and have an estimated remaining developed reserves (2P) of 62 million barrels as of April 2016.