Hibiscus

Sources say the suspension of Rex has fuelled speculation that the venture in Oman may have discovered some evidence of hydrocarbon but its commercial value is hard to determine at this point.

Rex, Hibiscus and Schroder & Co Banque SA jointly control Lime Petroleum Plc (Lime) is currently (Feb 2014) undertaking a drilling programme in Oman. The programme to drill in Oman Block 50 is undertaken by Masirah Oil Ltd, a subsidiary of Lime Petroleum.

The drilling of the 3,000 m well is now (04 Feb 2014) completed and the hydrocarbon samples have been sent for testing. This will take a few weeks from 04 Feb 2014 where the flow rate and oil quality will then be determined.

If it was true that Masirah Oil would be sending the samples for testing, it pointed to evidence of hydrocarbon. The hydrocarbon has to be of good enough thickness and saturation. They could also be doing tests to analyse the potential source area.

The current (Feb 2014) drilling programme conducted by Hibiscus is the second in the Block 50 Oman concession area.

It planted its first spud in December 2013 but stopped drilling due to safety reasons even without reaching the target depth. The company discovered hydrocarbon but was of non-commercial value.

Meanwhile its audited financial statement for the fiscal year ended March 31 2013, rm181.4 million or 74% of its rm245 million pre IPO and IPO proceeds has been utilised. The rm79.48 million raised from the portion of its first CRPS tranche has also been fully used up.

In Oct 2013, Hibiscus proposed to issue a second tranche of CRPS to raise up to 10% of its share base to rasie cash. It has until April 19 2014 to issue a circular to shareholders to seek approval for the propsoed fund raising.

For the six months ended Sept 30 2013 it made rm2.8 million in net profit compared with a rm4.06 million net loss in the same period last year. Revenue rose nearly 70% year on year to rm6.56 million from rm3.87 million before.