Polo Resources Limited HIBISCUS PETROLEUM - INVESTMENT UPDATE (4386D)
09 October 2018 - 9:51PM
UK Regulatory
TIDMPOL
RNS Number : 4386D
Polo Resources Limited
09 October 2018
This announcement contains inside information as defined in
Article 7 of the EU Market Abuse Regulation No 596/2014 and has
been announced in accordance with the Company's obligations under
Article 17 of that Regulation.
09 October 2018
Polo Resources Limited
("Polo" or the "Company")
HIBISCUS PETROLEUM - INVESTMENT UPDATE
Polo Resources Limited (AIM: POL), the multi-sector investment
company with interests in oil, gold, coal, copper, phosphate,
lithium, iron and vanadium, is pleased to announce that its 8.75%
investee company Hibiscus Petroleum Berhad (HIBI:MK) ("the Group")
has reported that its indirect wholly-owned subsidiary, Anasuria
Hibiscus UK ("AHUK") has entered into a conditional sale and
purchase agreement ("SPA") with Caldera Petroleum (UK) Ltd ("CPL")
to acquire to acquire a 50% interest in the UK Continental Shelf
Petroleum Production Licence No. P.198 Block 15/13a and Block
15/13b in the UK Central North Sea ("Licence") for a total cash
consideration of USD37.5 million.
The Blocks (Block 15/13a and Block 15/13b), within Licence P.198
in the United Kingdom Continental Shelf, are situated approximately
250km northeast of Aberdeen and 19km northeast of the Piper Field
in the UK Central North Sea, in 140m water depth.
Hibiscus Petroleum's strategy since listing has been to invest
in a balanced portfolio of assets, with an increasing focus on
development and producing assets and expanding the Group's
footprint in the UK.
Based on an independent report by AGR TRACS International
Limited, the gross contingent oil resources ("2C Oil Resources") in
the Blocks is estimated to be 60.0 million barrels of oil (30
million barrels of oil net to AHUK). Prior to this transaction, the
Group's proved and probable oil reserves ("2P Oil Reserves") and 2C
Oil Resources in its current portfolio are 46.0 million barrels and
38.5 million barrels, respectively.
A total of seven wells under the Licence have been drilled
to-date exploring the Palaeocene interval and exploring/appraising
the Upper Jurassic interval. A discovery within Block 15/13a, has
significant contingent oil resources. A smaller field, within Block
15/13b, lies northeast of Block 15/13a. Oil bearing layers were
tested in Palaeocene in Block 15/13a and in Upper Jurassic in Block
15/13b. In Block 15/13a, a 16-hour drill stem test resulted in a
final flow rate of 1,937 barrels per day on a 40/64" choke in a
conventional vertical well.
The range of contingent oil resources (gross, and net to AHUK at
50% participating interests) are given below.
Contingent Oil Resources (MMstb)
1C 2C 3C
-------------- -------------- --------------
Gross* Net Gross* Net Gross* Net
------- ----- ------- ----- ------- -----
Block 15/13a 31.8 15.9 56.0 28.0 88.5 44.3
------- ----- ------- ----- ------- -----
Block 15/13b 2.4 1.2 4.0 2.0 5.8 2.9
------- ----- ------- ----- ------- -----
Total 34.2 17.1 60.0 30.0 94.3 47.2
------- ----- ------- ----- ------- -----
*Source: AGR's report of September 2018.
Glossary:
1C Low estimate scenario of contingent resources - with
respect to resource categorisation, this is considered
to be a conservative estimate of the quantity that
will actually be recovered from the accumulation by
a project. If probabilistic methods are used, there
should be at least a 90% probability (P90) that the
quantities actually recovered will equal or exceed
the low estimate
2C Best estimate scenario of contingent resources - with
respect to resource categorisation, this is considered
to be the best estimate of the quantity that will
actually be recovered from the accumulation by a project.
It is the most realistic assessment of recoverable
quantities if only a single result were reported.
If probabilistic methods are used, there should be
at least a 50% probability (P50) that the quantities
actually recovered will equal or exceed the best estimate
3C High estimate scenario of contingent resources - with
respect to resource categorisation, this is considered
to be an optimistic estimate of the quantity that
will actually be recovered from an accumulation by
a project. If probabilistic methods are used, there
should be at least a 10% probability (P10) that the
quantities actually recovered will equal or exceed
the high estimate
MMstb Million stock tank barrels
Subject to the completion of CPL's acquisition of the Licence,
AHUK shall acquire the Interest from CPL and thereafter assume the
role of project manager/operator of the Licence under a proposed
joint operating agreement to be entered into between CPL and AHUK
upon the completion of the SPA ("JOA"). At Completion Date, the JOA
will provide the contractual basis for governing the joint
operations for the business of exploration, development and
production of oil and gas from the Blocks. The JOA will also
document (i) the respective participating interest of AHUK and CPL
in the Licence and detail their respective rights, benefits,
obligations and liabilities (including for meeting cash calls by
the operator) in accordance with their respective participating
rights, and (ii) AHUK as the operator. This acquisition is expected
to be completed by mid-October 2018 and is subject to, amongst
others, regulatory approvals and third party consents, including
approvals from the Oil & Gas Authority, UK. The Proposed
Acquisition is not subject to Hibiscus Petroleum's shareholders'
approval.
Financial effects of the Proposed Acquisition
Subject to the approval of a field development plan by the
relevant UK regulatory authorities, the Blocks are expected to
contribute positively to the future earnings of the Hibiscus
Petroleum Group within the next 5 financial years.
The Proposed Acquisition is not expected to have any material
effect on the earnings of the Hibiscus Petroleum Group for the
financial year ending 30 June 2019.
The full details of this announcement can be found at
http://www.hibiscuspetroleum.com/.
For further information, please contact:
Polo Resources Limited
- Kudzayi Denenga, Investor Relations +27 (0) 787 312 919
Allenby Capital Limited (Nominated
adviser & broker)
- John Depasquale +44 (0)20 3328 5657
Blytheweigh (Public relations)
- Julia Tilley, Simon Woods +44 (0) 207 138 3204
About the Company
Polo Resources Limited is a multi-sector investment company
focused on investing in undervalued companies and projects with
strong fundamentals and attractive growth prospects. For complete
details on Polo, please refer to: www.poloresources.com.
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END
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