by ASILA JALIL
Dagang Nexchange Bhd (DNeX) has received approval from its shareholders to pursue its proposed acquisition to increase its stake in Ping Petroleum Limited (Ping) by another 60% for RM314.3 million.
Upon completion of the exercise, DNeX will have a 90% stake in the oil and gas company.
The proposed acquisition is expected to be completed by the end of June 2021.
In a filing to the local bourse today, the group revealed that 221 shareholders voted for the proposal, representing 593.37 million shares while a total of 46 shareholders voted against the acquisition, accounting for 5.99 million shares. The voting was done during the group’s extraordinary general meeting (EGM) earlier today.
The group’s MD Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said it is an opportune time for DNeX to expand its business in the upstream oil and gas (O&G) sector given the recent climb in Brent crude oil prices to levels above USD70 per barrel on top of the growth prospects of Ping.
“Moreover, as international O&G majors are divesting their upstream assets as part of their global portfolio rebalancing, we are also looking into acquiring additional late cycle producing assets in such target markets as the North Sea, Malaysia and within the region as well.
“Opportunities are plenty for us to embark on investments or acquisitions of late cycle producing brownfield assets in these regions,” he said in a statement today.
Syed Zainal Abidin also highlighted that Ping’s turnaround specialty includes improving operational uptime and reducing cost of production.
Ping had kept and continues to reduce operating costs to below USD20 per barrel to ensure the company remains profitable and generates a positive operating cash flow despite the volatile market conditions, he said.
The firm is involved in the exploration, development and production of crude oil and natural gas with working interests in a balanced portfolio of brownfield and greenfield assets located in the North Sea, United Kingdom.
The independent market valuation of Ping’s entitlement in the Anasuria Cluster stood at USD212.7 million based on the proved and probable (2P) oil reserves estimated at 23.9 MMstb (million stock tank barrels) and the 2P gas reserves estimated at 15.1Bscf (billion standard cubic feet) as at June 30, 2020.
During the EGM, DNeX’s shareholders had also set June 23, 2021 as the date for the voting of the proposed acquisition of 60% equity interest in SilTerra Malaysia Sdn Bhd.
The group had announced its plans to undertake a private placement to raise up to RM700.81 million to partly finance its proposal to acquire the stake in SilTerra from Khazanah Nasional Bhd.
DNeX share price remained unchanged and closed at 86 sen today valuing the company at RM2.04 billion.