Malaysia’s independent exploration and production company Hibiscus Petroleum returned to profit for the financial period ended March 31, 2016 due to completion of acquisition of Shell’s Anasuria cluster in the UK North Sea.

To remind, in August 2015, Shell reached an agreement to sell a batch of its North Sea oil fields to Ping Petroleum Limited and Hibiscus Petroleum whereby each of the two companies acquired 50% of the entire interests of Shell UK Ltd, Shell EP Offshore Ventures Limited and Esso Exploration and Production UK Limited in the Anasuria Cluster of oil and gas fields.

For this period, the group recorded a profit after taxation of RM80.5 million ($19.5M), an increase of RM 91.5 million ($22.2M) versus a loss after taxation of RM11 million ($2.7M) in the corresponding three-month period ended March 31, 2015.

Hibiscus explained that the turnaround achieved in the third quarter was attributable to the completion of the acquisition of the Anasuria Cluster on March 10, 2016. Following the completion in March, Petrofac was appointed as duty holder to support Anasuria Operating Company (AOC), a UK joint venture formed between Hibiscus Petroleum and Ping Petroleum.

Further, upon completion of the acquisition, the group recognised a fair value gain of RM135.3 million. The gain was generated as a result of the difference between the net assets of Anasuria Cluster at fair value versus the purchase consideration for the acquisition.

Hibiscus noted that the ownership of the Anasuria Cluster, with oil priced at a premium to Brent, provides the platform for Hibiscus Petroleum to generate a stable and long-term revenue stream. This is now also positively set against a backdrop of rising oil prices as the oil marketplace appears to have turned the corner with December 2017 Brent futures trading at $53/barrel as at the date of the quarterly report for the third quarter, the company added.

With respect to its future plans for this asset, Hibiscus said that its key objective is to boost the production rate of the Anasuria Cluster. Since taking over operatorship of the asset, the planning process has started for the development work to be undertaken to transform the productive capacity of the Anasuria assets. This would enhance oil and gas production rates which are expected to last well over the remaining useful economic life of the asset.

Hibiscus Petroleum Managing Director, Dr Kenneth Pereira commented, “With the completion of the acquisition of the Anasuria Cluster, Hibiscus Petroleum now has a profitable, cash generating asset within its portfolio with an estimated remaining economic life of twenty years. The focus is now on operations and proving our capability as a responsible operator in UK North Sea.”