Under the farm out agreement, Ping UK that is currently co-operating the Anasuria cluster of producing fields in the UK sector of the North Sea, will farm in and co-invest with Summit in two oil and gas assets located in the UK Central North Sea.
Kuala Lumpur, 28 April 2017 – Ping Petroleum Limited (“Ping”), an associate company of Dagang NeXchange Berhad (“DNeX”), has received approval from the Oil and Gas Authority of the United Kingdom for a farm out agreement.
The approval is a key condition precedent for the farm out agreement between Ping’s subsidiary company Ping Petroleum UK Limited (“Ping UK”) and a wholly-owned subsidiary of Sumitomo Corporation, Summit Exploration and Production Limited (“Summit”).
Under the farm out agreement, Ping UK that is currently co-operating the Anasuria cluster of producing fields in the UK sector of the North Sea, will farm in and co-invest with Summit in two oil and gas assets located in the UK Central North Sea.
Ping UK will have a 50 per cent working interest in the Avalon oilfield development located at licence area 21/6b. Ping UK will also participate with a 20 per cent working interest in the Ranger exploration well located at licence area 15/16d. Investments for Ping UK’s share of this venture will be fully funded by Ping UK.
This is an expansion of DNeX’s diversification into the Energy sector via its wholly-owned subsidiary company, DNeX Petroleum Sdn Bhd, which holds a 30 per cent enlarged equity of Ping, an independent upstream company that focuses on shallow water offshore production.
Completed in August last year, the acquisition of shares in Ping has contributed to a significant jump in DNeX’s net profit in the financial year ended 31 December 2016 through the share of result in associate company Ping that amounted to RM123.5 million.
Through the acquisition, DNeX has an indirect interest in Ping’s joint acquisition with Hibiscus Petroleum Berhad of the Anasuria Cluster, located about 175km east of Aberdeen in the UK Central North Sea and 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.
“Our acquisition into Ping has successfully generated positive results in generating profitability and improvement of DNeX’s earning resiliency,” said En Zainal Abidin Jalil, Group Managing Director of DNeX.
“Moreover, it provided us with the opportunity to gather the necessary expertise and track record of being an upstream oil and gas player via Ping. The latest development, we believe, is another significant milestone for Ping consistent with its strategy to diversify its oil and gas portfolio by targeting assets with that are lower risk with good upside. This is clearly an expansion in the right direction,” he added.