Hibiscus Petroleum Berhad, Malaysia-based exploration and production company, announced Friday that its jointly-controlled entity, Lime Petroleum Norway AS (Lime Norway) has executed an additional agreement with North Energy ASA (North Energy) to acquire a 20 percent stake in PL509CS, located in the North Sea, at a symbolic purchase consideration of $0.16 (NOK 1 or MYR 0.55). North Energy was awarded operatorship of the license in the 2013 Awards Predefined Areas (APA 2013) Jan. 21. The transfer of the equity interest in PL509CS to Lime Norway is pending regulatory approval.
Lime Norway is a wholly-owned subsidiary of Lime Petroleum Plc (Lime). Lime is a jointly-controlled entity in which Hibiscus Petroleum owns a 35 percent stake.
As part of Lime Group’s growth strategy with Norway taking an increasingly important focus, this latest acquisition was made after performing in-depth technical evaluations including Rex Virtual Drilling on on on the production licenses held by North Energy. Upon completion of the acquisition, Hibiscus Petroleum’s portfolio of licences in Norway would increase to 14.
Following the capital injections totalling $23 million made by Lime’s shareholders in November 2013 and January 2014, together with the Norwegian Kroner (NOK) 300 million financing facility secured Skandinaviska Enskilda Banken AB, Lime Norway has secured adequate financing to fulfil their work commitments for at least the next one year.
The attractive fiscal terms offered by the Norwegian Petroleum Tax Act also benefit Lime Norway as 78 percent of eligible exploration expenditure is reimbursed, irrespective whether production achieved. This is unlike the petroleum fiscal systems of most countries whereby a certain portion exploration expenditure may only be recovered upon production.
The acquisition of the interests in Norwegian Continental Shelf concessions is line with Hibiscus Petroleum’s portfolio balancing strategy to acquire assets in geo-politically stable regions. The Norwegian Continental Shelf is a prolific, mature oil and gas basin with significant level of exploration and production activity. Norway is the world’s 3rd largest gas exporter.
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