OIL and gas exploration company Hibiscus Petroleum Bhd, through its subsidiary, has entered into a conditional share sale agreement to takeover TotalEnergies EP (Brunei) B.V for RM1.2 billion (US$259.4 million).

The deal is entered between the subsidiary company Simpor Hibiscus Sdn Bhd and TotalEnergies Holdings International B.V., Hibiscus told Bursa Securities in a filing.

Upon execution of the SPA, Simpor Hibiscus paid a deposit of RM229.9 million (US$49.0 million) to TotalEnergies Holdings.

TotalEnergies Brunei owns a 37.5 percent operated interest in Block B Maharajalela Jamalulalam (MLJ) field.

Hibiscus said the proposed acquisition was in line with the growth strategy of the company of acquiring producing assets in the well established regions with an operator ship role.

“This asset, situated near the company’s home country, Malaysia, will enable Hibiscus Group to further strengthen its position as a significant independent exploration and production company in the region,” it said.

Hibiscus said it will fund the purchase through a combination of internally generated funds of the company and its subsidiaries or existing debt or other facilities.

“The group does not intend to propose any equity issuances as a source of funding as the group believes that other available sources of funding are sufficient to fund the purchase consideration,” it said in its filing.

Hibiscus said the MLJ field was a producing and cash generating gas asset with no additional financial commitments expected to be incurred.

The actual breakdown of the source of funding will only be determined later and will depend on, amongst others, the group’s cash reserves and future funding requirements,” it added.

The MLJ field is located in a prolific hydrocarbon-bearing region and was discovered in 1989. It has been producing gas and condensate since 1999.

The field has long-term production rights of up to 15 years (expiring on November 23, 2039), if extended with the agreement of the joint venture parties.

Other parties holding the remaining interest in the MLJ field are Shell Deepwater Borneo Limited (35%) and Brunei Energy Exploration Sdn Bhd (27.5%), a company ultimately owned by Brunei Minister for Finance Corporation.

Trading in its shares is suspended from 9am to 5pm today.

The stock closed at RM2.43 yesterday, valuing the company at RM1.96 billion. – June 14, 2024.