Polo Resources' Hibiscus Petroleum purchases Shell's Malaysian fields

Polo resources, an AIM-listed natural resources investment company, announced that its investee company Hibiscus Petroleum Berhad’s subsidiary SEA Hibiscus has entered into a sale and purchase agreement with Sabah Shell.

The agreement is to acquire Shell’s entire 50% participating interests in the 2011 North Sabah enhanced oil recovery production sharing contract (PSC) for a purchase consideration of $25m.

The acquisition is expected to be complete in 2017 and is subject to regulatory approval of the national oil company of Malaysia, Petronas, and its subsidiary Petronas Carigali, a 50% joint center partner in the PSC.

The PSC comprises four oil producing fields and associated infrastructure in a key hydrocarbon province in Malaysia.

According to the independent technical valuer, RISC Operations, the field produces over 16,000 barrels of oil per day and have an estimated remaining developed reserves of 62m barrels as of April 2016.

The PSC also contains pipeline infrastructure and the Labuan Crude Oil Terminal, which is an onshore processing plant and oil export terminal.

The contract provides long-term production rights until 2040, with identified future development opportunities expected to add incremental proven and probable or best estimate of contingent resources (2P/2C) up to 79m barrels. The firm believes the contract will add to Hibiscus Petroleum’s future growth prospects.

The share price rose 0.44% to 5.75p at 1548 BST on Thursday.