Hibiscus’ Marigold field development marks one step further towards tapping oil reserves, says HLIB  Hibiscus’ Marigold field development marks one step further towards tapping oil reserves, says HLIB

Hong Leong Investment Bank (HLIB) is positive on Hibiscus Petroleum Bhd’s wholly owned unit Anasuria Hibiscus UK Ltd (AHUK) entering into a unitisation and unit operating agreement (UUOA) to develop the Marigold field located in the Central North Sea.

The research firm in a note on Monday said this development marks one step further for Hibiscus towards tapping its best estimate of contingent (2C) resources.

“Subject to the conclusion of the field development plan (FDP) submission and regulatory approval process, management guided it will roughly take 12 months from the submission day to reach final investment decision (FID),” HLIB said.

HLIB added it will take AHUK about four years to achieve first oil from the Marigold field.

Hibiscus’ net production is expected to peak in the financial year 2025 (FY2025) of 25,000 barrels of oil equivalent per day (boepd), which serves as another level of growth for Hibiscus, the research outfit said.

“Although the production rate of the oil field is still uncertain at this juncture, we think it will substantially elevate Hibiscus’ net production due to the sizeable 2C resources within the field,” HLIB said.

HLIB maintained its ‘buy’ call on Hibiscus, with a higher target price of RM1.29, from RM1.12 previously, based on net present value of all its producing assets’ future free cash flows, after accounting for each asset’s targeted lifespan.

“At about only five times revised FY2024 forecast P/E (price-earnings), we believe that Hibiscus is a compelling case and is conspicuously undervalued given its strong foothold in the upstream energy space,” HLIB added.

On Sept 15, Hibiscus’ AHUK announced it has entered into the UUOA with Ithaca Oil and Gas Ltd and Caldera Petroleum (UK), to jointly develop the Marigold field, comprising the Marigold West Field and East Field.

Led by Hibiscus, the consortium will develop the Marigold field FDP, targeted for submission by early 2024. The FDP of Marigold Sunflower field (Block 15/13b) will be submitted separately and does not form part of the UUOA.

At the time of writing, Hibiscus shares traded unchanged at RM1.09, valuing the company at RM2.19 billion.

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