May 2014 spewing with oil for all hibiscian!!

These guys are here again to promote negative news with the intention to scare investors to panic sell so they can buy at the bottom.

Unfortuntately Hibiscus no longer fall under the category of SPAC. Its now listed in the Main Board. Have to make this clear.

The exploration cost is shared between Rex and Hib. Hib owns 30+% of Lime, hence the drilling cost is around 18 mil of 60 mil

No write off for the time being....

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1502113

Masirah Oil Limited (“Masirah”), the entity which holds rights to the Block 50 concession, is held by Lime Petroleum Plc (“Lime”) (64%) and Petroci Holding (36%). Hibiscus holds 35% in Lime. Hibiscus accounts for its 35% interest in Lime as Investment in Joint Venture in its consolidated Statement of Financial Position and recognises its share of Lime’s profit or loss in its consolidated Income Statement.

The total estimated costs incurred by Masirah for the MNN #1 well recently drilled is approximately USD18.3 million (RM60 million). Hibiscus and Lime have both adopted the full cost method of accounting wherein oil and gas expenditure incurred is accumulated in respect of each identifiable area of interest and capitalized (and not expensed) to the extent certain conditions are satisfied 1.

In this instance, the area of interest is the Block 50 Oman concession, and in line with the adopted accounting policy, we believe that Lime would be capitalizing the costs of the MNN #1 well and would not be writing off the cost to its Income Statement at this stage. Until and unless the area is abandoned (and as there are no plans to abandon the area currently), there is no requirement for costs to be written off. In this event, Hibiscus would not be recognizing its share of the cost of the MNN #1 well in its Income Statement at this time.

In addition, exploration and evaluation (“E & E”) assets are assessed for impairment when facts and circumstances suggest that the carrying amount of an E & E asset may exceed its recoverable amount. For Lime/Masirah, as there is a plan to drill a second well in the near future, and with the existence of other prospects within the Block 50 Oman concession, at this stage, we believe that it is too premature to conclude on potential impairment, if any. The impact of the MNN #1 well result on the impairment assessment will be fully evaluated by Lime/Masirah and the results will be disclosed in Lime’s audited consolidated financial statements for the financial year ending 31 December 2013. Hibiscus would then account for impairment losses as part of its share of Lime’s profit or loss, if any.

In relation to its investment in Lime, Hibiscus shall assess the carrying value of its investment with its recoverable amount as at 31 December 2013, in accordance with its accounting policy. The results of its assessment will be disclosed in its next Quarterly Report.

The total estimated cost for the second exploration well is expected to be approximately USD25 million (RM83 million). The cost of this well is expected to be fully funded by cash already available in Masirah. The shareholders of Masirah, namely Lime and Petroci Holding, had injected the required funds into Masirah prior to the commencement of the 2-well drilling programme in Oman. It should be noted that the second well is subject to the approval of the relevant regulatory authorities in Oman.

Something worth sharing.

http://www.nextinsight.net/index.php/story-archive-mainmenu-60/919-2013/7886-rex-international-cosco-what-analysts-now-say