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Hibiscus set to triple production now Repsol acquisition complete

© Supplied by ShutterStockThe Petronas Towers in Kuala Lumpur, Malaysia.
The Petronas Towers in Kuala Lumpur, Malaysia.

Hibiscus Petroleum (KLSE: HIBISCS) has completed its acquisition of Repsol’s upstream assets in Malaysia and Vietnam that will increase the Malaysian-listed company’s oil and gas production almost threefold.

Hibiscus said today that “out of the purchase price of $212.50 million, the net amount paid at completion is $123.65 million after taking into account various adjustments including the deposit paid of $15 million.”

Hibiscus said previously that the assets will generate around $255 million total net undiscounted cash flow over the next five years. It also expects daily oil and condensate production to double from 9,000 to 18,500 barrels per day this year after taking over the five production-sharing contracts.

The deal includes a 35% interest in production-sharing contract (PSC) PM3 CAA, 60% in 2012 Kinabalu Oil PSC, 60% in PM305 PSC, 60 % in PM314 PSC, and 70% in Block 46 CN in Vietnam – a tie-back asset to the PM3 CAA production facilities. The PM3 block is located within a commercial arrangement area (CAA) set up between Malaysia and Vietnam to allow exploration and the development of several oil and gas discoveries.

“Almost 50% of the production comprises gas. The addition of gas production is expected to present a better balance to our group’s asset portfolio in terms of price stability, markets and operations. Such diversification represents a key aspect of our energy transition strategy as natural gas has been regarded as an important bridging fuel as the world transits to a lower carbon energy mix,” Hibiscus said today.

The company added it is well positioned to build on its operational track record in other producing asses in the UK and Malaysia.

“This transaction has been made possible with the strong support of our shareholders, industry regulators both in Malaysia and Vietnam as well as our business partners. Our current partnership with PETRONAS and Petronas Carigali Sdn Bhd will be further strengthened and we are excited to forge a new working relationship with PetroVietnam as we expand our geographic footprint into Vietnam,” said Hibiscus.

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