Kuala Lumpur, 27 April 2016 – Dagang NeXchange Berhad (“DNeX”) today received shareholders’ approval on its acquisition, through DNeX’s wholly-owned subsidiary company, DNeX Petroleum Sdn Bhd, of 30 per cent enlarged equity of Ping Petroleum Limited (“Ping”), an independent upstream company that focuses on shallow water offshore production.
The acquisition is a key milestone in DNeX’s diversification into the Energy sector, and will be fulfilled at a cost of US$10.0 million in cash to be funded by internal and borrowed funds.
Buying into Ping serves as part of DNeX’s growth strategy in the Energy sector namely the upstream oil and gas (“O&G”) segment through acquiring producing assets that are for sale and offer development opportunities, and can be progressively scaled up over time.
“Through this move, we will be able to build our capability as an upstream O&G player via Ping, and tap into the expertise of Ping’s human capital who are equipped with vast experiences in this business,” said En Zainal Abidin Jalil, Group Managing Director of DNeX.
Through the acquisition, he said DNeX is tapping into reserves and resources of Ping’s acquisition of the Anasuria Cluster. Ping and Hibiscus Petroleum Berhad had jointly entered into sale and purchase agreements to each acquire 50 per cent interest in the Anasuria Cluster oil and gas fields and related facilities from Shell U.K. Limited, Shell EP Offshore Ventures Limited and Esso Exploration and Production UK Limited, which was completed on 10 March 2016. The transfer of the said asset was effective from 1 January 2015.
The Anasuria Cluster is located about 175km east of Aberdeen in the UK Central North Sea and the joint acquisition comprises a 100 per cent interest in the Anasuria FPSO, Teal, Teal South, Guillemot A fields and related facilities and a 38.65 per cent interest in the Cook field and related facilities. The cluster represents an attractive, geographically focused package of operated interests in producing fields and associated infrastructure.
According to Zainal, DNeX will use this opportunity to gather the necessary expertise to be able to leverage on its track record of being an upstream O&G player via Ping and bid for future O&G related jobs in Malaysia and regionally as well.
“Our entry into the Energy sector takes a medium and long term view whereby the prospect of Energy business remains positive in the long run, despite the current soft market conditions due to the volatility in oil prices,” he said.
The acquisition is expected to contribute positively to DNeX’s future earnings that will propel profitable growth for the Group, improve earning resiliency and enhance shareholders’ value, he added.