2nd Dec 2015 09:35
LONDON (Alliance News) - Polo Resources Ltd shares rose on Wednesday after the company said it has invested USD5.0 million in a Malaysian-listed petroleum company with assets in Australia.
Polo has interests in multiple commodities including oil, gas, copper, coal, iron ore, gold and phosphate, and Polo shares were trading down 2.5% to 2.49 pence per share on Wednesday morning.
Through its subsidiary, it has accepted a cash subscription offer to invest USD5.0 million into Hibiscus Petroleum Bhd, giving Polo an 8.4% stake in the company after it paid MYR0.235 per Hibiscus share, which was at a 4.1% discount to the closing price of Hibiscus shares on Tuesday.
Hibiscus currently has a market cap of around USD56.0 million and has its primary asset in Australia which is thought to contain around 8.0 million barrels of oil in proven and probable (2P) reserves.
However, Polo noted that Hibiscus has also recently made two acquisitions which look set to boost that 8.0 million barrel figure upwards.
Hibiscus has signed a joint venture with Ping Petroleum Ltd whereby each of them will take 50% of the stake held by Shell UK Ltd, Shell EP Offshore Ventures Ltd and Esso Exploration and Production UK Ltd in the producing Anasuria Cluster oil and gas fields in the North Sea.
Anasuria is currently producing around 7,000 barrels of oil per day net to Shell and Esso, with a total of 40.4 million barrels in 2P reserves and 27.9 billion standard cubic feet of gas.
That deal is being reviewed by UK authorities, and if approved, will see Hibiscus pay a total of USD52.5 million, of which it has already paid USD4.0 million.
Hibiscus has also recently agreed to takeover Hydra Energy Holdings Pty Ltd in an all-share deal, giving it access to Hydra's interests in petroleum assets offshore Australia. That deal also is being analysed by authorities for approval.
If both those acquisitions go through, Hibiscus will have a total of 47.0 million barrels of oil in 2P reserves.
However, Hibiscus is currently loss-making, after reporting a MYR75.8 million pretax loss in the 18 month period ended June 30, which equates roughly to a GBP13.9 million loss. Revenue in that period only totalled MYR15.6 million, equivalent to around GBP2.9 million.
Polo has increased its stakes in a number of companies recently, increasing its stake in investee company Ironstone Resources to 18.8% on Tuesday, and increasing its stake in Blackham Resources to 11% in November.
Polo also said Tuesday that it had started to receive funds from Signet Petroleum, in which it holds a 42% stake, after Signet shareholders agreed to a distribution of Signet's net cash.
Polo said it has so far received a cash distribution totalling USD691,000 from Signet and a further USD91,000 is expected to be received in the first quarter of 2016 as Signet winds down its activities and settles its liabilities.
Signet shareholders also approved an in-specie distribution by Signet's Nigerian subsidiary of shares it holds in Regalis Petroleum Ltd, which is a private company holding interests in two blocks in Chad that it plans to explore.
Polo said it has now received just under 1.9 million Regalis shares from Signet and another 1.2 million shares from other Signet shareholders as part of the winding down of Signet. In total, those shares have a value of just under USD7.0 million, according to Polo.
After securing those Regalis shares, Polo now holds a total of 6.6 million Regalis shares, representing around a 13.7% stake in the company.
Polo said it expects to book a write down of its Signet investment of around USD20.6 million, which is net of the value of the Regalis shares it has acquired.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
POL.L