A quick look on the West Seahorse reserve based on theEdge article.
Quote:
Australian Manufacturing, an online portal specializing in
manufacturing-related news, reported on Sept 8 that Australian Minister
for Industry, Innovation and Science Arthur Sinodinos confirmed that the
Federal Government had renewed its major project status to the West
Seahorse Project, which is located in the Gippsland Basin, off the coast
of Victoria" Unquote.
Reserve reported at 9.2 mmbbls. AR stated 8.0 mmbbls with 6.5 mmbbls 2P and 1.5 mmbbls 2C.
Reported capex of US$140m & a further US$100m over the life of the reservoir.
CAPEX per barrel = 140/9.2 = US$15.22 per barrel with first oil probably only in 3 years.
Hibiscus,
in their latest quarterly report dated 30 June 2017, stated that the
management may delay seeking FID for a minimum of 3 years in favor of
other more attractive investment options.
Hibiscus
should indeed channel their capital to the opportunities that generate
larger economic benefits. West Seahorse is a greenfield project, there
is no existing infrastructure ready, hence development would probably
take 2~3 years for the first oil. Priorities should definitely given
first to producing wells in Anasuria, later then to North Sabah after
sorting out handover issues and stabilizing the operations.
With
capital so tight (just recently completed share placement for RM23.5m
only), I would rather the management sell the West Seahorse, invested
all the proceeding to accelerate the work programs in Anasuria &
North Sabah.
Disclaimer:
1)
The author has no access to management of Hibiscus and the report was
written purely based on the news reports, company statements and media
releases together with industrial trade reports. Verificacy of the
report is based on best efforts and was subject to the author's
knowledge inadequacies, assumptions used and the probabilistic nature of
the future events.
2)
The author has position in Hibiscus and while trying to stay as
objectively as possible but may still be influenced by subconscious
confirmation and memory bias.
http://klse.i3investor.com/blogs/hibiscus_part1/132396.jsp
