“The acquisition serves as part of critical building blocks to develop our diversification into oil, gas and energy in our journey to become a serious player in this sector. This asset is already on production and there are potential opportunities in terms of cost reduction, uptime improvement and future reserves development. It 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,” said En Zainal Abidin Jalil, Group Managing Director of DNeX.
Kuala Lumpur, 7 September 2015 – Dagang NeXchange Berhad (“DNeX”), through wholly-owned subsidiary company DNeX Petroleum Sdn Bhd, is acquiring 30 per cent 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 oil, gas and energy sector announced last year, and will be fulfilled at a cost of US$10.0 million to be funded by internal and borrowed funds.
Through the acquisition, DNeX is tapping into reserves and resources of Ping’s recent agreement for the acquisition of the Anasuria Cluster. Ping and Hibiscus Petroleum Berhad have jointly entered into sale and purchase agreements to each acquire 50 per cent of the entire interests of Shell U.K. Limited, Shell EP Offshore Ventures Limited and Esso Exploration and Production UK Limited in the Anasuria Cluster of oil and gas fields 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 a 38.65 per cent interest in the Cook field. The cluster represents an attractive, geographically focused package of operated interests in producing fields and associated infrastructure.
The assets have a proven and producing resource base that provides a platform for further development. Moreover, a number of incremental development and exploration opportunities exist within the licenced areas, which are expected to generate incremental value in the medium term.
DNeX’s acquisition into Ping is expected to be completed in the fourth quarter of 2015 pending approval required from relevant authorities including Securities Commission, Bursa Securities as well as shareholders of DNeX, and any other relevant third parties.
“The acquisition serves as part of critical building blocks to develop our diversification into oil, gas and energy in our journey to become a serious player in this sector. This asset is already on production and there are potential opportunities in terms of cost reduction, uptime improvement and future reserves development. It 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,” said En Zainal Abidin Jalil, Group Managing Director of DNeX.
He added that DNeX’s diversification into oil, gas and energy has also borne early achievements by starting to register revenue in the second quarter this year through rental of drilling equipment to Baker Hughes (Malaysia) Sdn Bhd.
Also in the pipeline is the completion of the Group’s proposed acquisition of OGPC Group, which is expected in fourth quarter 2015. DNeX has also acquired 51 per cent stake of Forward Energy Sdn Bhd, a company involved in power plant, energy, energy-related business specifically in the area of Independent Power Producer.