PETALING JAYA: Hibiscus Petroleum Bhd has raised RM203.6mil from its private placement exercise that will be used to acquire producing oil and gas (O&G) assets in South-East Asia.
The private placement was part of Hibiscus’ multi-tranche Convertible Redeemable Preference Shares (CRPS) of up to RM2bil exercise that was announced in September.
Taking advantage of the current low oil price environment, its group managing director Dr Kenneth Pereira said that there are a lot of O&G assets on sale and that it is an opportune time to look into acquisition opportunities.
“We are targeting producing assets with a minimum internal rate of return of 12%,” he told reporters at a virtual press conference on Monday.
“Our target is to bid for assets in the next six months. There are already some available in the market now and we are engaged in the processes,” he added
This morning, the first tranche of 203.6 million CRPS were listed on the Bursa Malaysia Main Market at RM1 apiece.
Pereira hinted that the acquisition would also include a debt portion and would be “material” for Hibiscus.
On the oil price outlook, Hibiscus chairman Zainul Rahim Mohd Zain expected that price would stabilise in the second half of 2021 depending on the Covid-19 cases and the OPEC+ decisions.
“Assuming the pandemic is going to flatten off and the vaccine is in place, which will improve economic growth prospects, we expect the oil price to move up in the second half of next year.
"We expect a more stable oil price in the second half of 2021 and if nothing goes wrong with the pandemic, the oil price should be further strengthened from 2022 onwards, which is higher than what we see today,” added Zainul Rahim.
Oil prices extended gains on Monday as the hopes for a recovery in oil demand thanks to the success of Covid-19 vaccine trials.
International benchmark Brent crude oil increased 2% to US$45.88 a barrel, the highest since Sept 2.
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