Hibiscus Ups Stakes in VIC/L31, VIC/P57 Licenses in Gippsland Basin

Malaysia's Hibiscus Petroleum Berhad group announced Monday that it had signed a series of binding agreements with its Australian partner, 3D Oil Limited (3D Oil) July 4 to increase its effective stake in both the VIC/L31 Production License in Australia's Gippsland Basin which contains the West Seahorse discovered field, and the VIC/P57 Exploration Permit which is believed to contain several exploration opportunities.

Hibiscus Petroleum through its subsidiary, Carnarvon Hibiscus Pty Ltd (Carnarvon Hibiscus) currently holds a 50.1 percent stake in both licenses located in the Gippsland Basin, known to be the most oil-prolific offshore basin in Australia.

The arrangements as envisaged through the agreements will provide the Hibiscus Petroleum group with:

  • An increase in Carnarvon Hibiscus’ interest in the VIC/L31 Production License (West Seahorse discovery) from 50.1 percent to 56.17 percent, for a sum of $1.945 million under a debt conversion exercise
  • An exclusive option to further increase its stake in the VIC/L31 Production License (VIC/L31 Option)  from 56.17 percent to 100 percent for $14.05 million, based on a fair market value of 3DO’s 49.9 percent stake in the West Seahorse field determined by Deloitte Touche Tohmatsu
  • An increase in Carnarvon Hibiscus’ interest in the VIC/P57 Exploration Permit from 50.1 percent to 55.1 percent
  • A purchase of 3D Oil’s 49.9 percent share of the Britannia rig which is already 50.1 percent owned  by Carnarvon Hibiscus, thus providing Carnarvon Hibiscus with 100 percent ownership of the Britannia rig. The total consideration for the Britannia rig and the 5 percent interest in VIC/P57 Exploration Permit is $7.5 million
  • An exclusive option for Hibiscus Petroleum’s joint venture, HiRex Petroleum Sdn Bhd (HIREX) to obtain a 20 percent equity in VIC/P57 Exploration Permit (VIC/P57 Option) from 3D Oil in exchange for use of the Rex Virtual Drilling technology

The option of full ownership of the West Seahorse production license gives Hibiscus Petroleum more latitude to advance development plans of West Seahorse which contains 6.5 million barrels of proven oil reserves and contingent resources of 1.5 million barrels of oil, as certified by independent expert Gaffney, Cline & Associates. Having full ownership of the Britannia rig will also allow Hibiscus Petroleum to solely decide the most beneficial location to deploy this facility.

With respect to the VIC/P57 Exploration Permit, HIREX’s entry would allow the joint venture parties to pursue low risk, high impact exploration in VIC/P57 Exploration Permit using Rex Virtual Drilling technology provided by HIREX.

These agreements are in relation to Hibiscus Petroleum’s announcement May 12 regarding the signing of a Heads of Agreement with 3D Oil, a preliminary move towards allowing both parties to exploit the full potential of the VIC/P57 Exploration Permit and VIC/L31 Production License within their respective financial capacities. These binding agreements are subject to approvals from 3D Oil’s shareholders, the Australian Foreign Investment Review Board and NOPTA (National Offshore Petroleum Titles Administrator).


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