UKCS: Hibiscus Petroleum secures Crown

UKCS: Hibiscus Petroleum secures Crown

Via Anasuria Hibiscus UK, Hibiscus Petroleum Group has entered into a conditional sales and purchase agreement to acquire License P2366, from United Oil & Gas and Swift Exploration for USD 5 million.

The blocks include the Crown discovery (Palaeocene Balmoral Sandstones) which consists of  2C  contingent resources that range between 4 to 8 MMboe, subject to an independent 3rd party expert assessment and are located 12 km south-east of Marigold field, which together with the Sunflower field, was acquired by Anasuria Hibiscus UK in October 2018.

Crown discovery location. Source: OGA

United and Swift were awarded License P2366 as part of the OGA’s 30th Licencing Round, in August 2018, and they each hold 95% and 5% participating interest respectively.

Anasuria Hibiscus UK holds 50% operated interest in Licence P198 blocks 15/13a and 15/13b containing the Marigold and Sunflower oilfields respectively, in addition to 50% joint‐operating interests in the P013 licence  consisting of the Teal, Teal South and Guillemot A fields (collectively known as Anasuria Cluster), as well as 19.3% non‐operating interest in the P185 licence consisting of the Cook field.

Anasuria Cluster fields. Source: Hibiscus Petroleum

Under further negotiations with the sellers post-execution of the earlier conditional non‐binding term sheet, the payment terms of the proposed acquisition of License P2366 would commence with a non‐refundable payment of USD 0.1 million to the sellers and a further USD 0.9 million upon completion of the agreement.

Subject to further milestones being achieved post-agreement completion, an additional sum of USD 3 million will be paid within 7 business days of  the actual date of approval of the Marigold Field Development Plan (“FDP”) which includes the development of the Crown discovery as part of the overall Marigold development (“FDP Approval”), by the relevant UK regulatory authority, which is expected to be received by the end of 2020.

However, if FDP Approval is not achieved, or if the Marigold FDP submitted does not include the development of the Crown discovery, Anasuria Hibiscus may, at its discretion,  proceed with the USD 3 million payment or transfer License P2366 back to the sellers at nominal consideration without any further payment obligation.

Also, up to  USD 1 million will be paid through an overriding royalty scheme once the Crown discovery has commenced production. Given its proximity to Marigold, the contemplated development of Crown is based on a single well subsea tieback to the Marigold field.

The proposed consideration was arrived at on a similar basis to the consideration paid for the Marigold and Sunflower fields as they are seen as being accretive to the existing Marigold and Sunflower development.

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