PETALING JAYA: Taking advantage of the current low oil price environment, Hibiscus Petroleum Bhd is eyeing to acquire producing oil fields that can quadruple its production.
Group managing director Dr Kenneth Pereira (pic) said Hibiscus is targeting to bid for assets in South-East Asia over the next six months with the RM203mil cash it raised from a private placement exercise.
“There are a lot of assets for sale now but we are not looking at a distressed asset. We want assets that have a strong cash flow with an internal rate of return of at least 12%, ” he told reporters at a virtual meeting.
When asked if Hibiscus is planning to bid for ExxonMobil’s assets in Malaysia, Pereira declined to answer but said the acquisition would have a “material change” to the company.
“At the moment, Hibiscus is producing 10,000 barrels of oil per day and the target acquisition could be three to four times of our current size, ” he said.
Pereira added that the potential acquisition would be financed through debt and equity. Hibiscus is a debt-free company.
Late last year, it was reported that ExxonMobil was looking to sell its upstream offshore assets for between US$2bil (RM8.3bil) and US$3bil (RM12.3bil).
Hibiscus is in the midst of issuing Islamic convertible redeemable preference shares (CRPS) to raise RM2bil, a figure which is twice its market capitalisation.
It recently raised RM203mil from domestic investors and high net-worth individuals for the second tranche of the CRPS, and were listed on Bursa Malaysia yesterday.
“The CRPS tranches will be sized to minimise dilutive effects to existing shareholders, taking into account the requirements of financial institutions that are supporting the debt component of various bids being contemplated for submission by the company, ” Hibiscus said.
Pereira had also participated in the CRPS after subscribing 33.5 million units for RM33.5mil.
Hibiscus currently has assets in the UK, Malaysia and Australia. It took a massive impairment worth RM183.5mil in the fourth quarter ended June 30 for its assets in Australia.
“It was a one-off impairment as we are working to find partners for the Australian assets and if there is an opportunity to sell the assets, we will go for it, ” Pereira said.
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