by PRIYA VASU / graphic by TMR

DAGANG NeXchange Bhd (DNeX) has completed the acquisition of an additional 60% stake in Ping Petroleum Limited expanding its holdings to 90%.

This makes Ping a subsidiary of DNeX Energy Sdn Bhd, a wholly owned subsidiary of DNeX, the company said in a filing to Bursa Malaysia today.

Ping is an upstream oil and gas company, with a balanced portfolio of producing and developing O&G assets in the Anasuria Cluster located in the North Sea, United Kingdom.

“With the completion of this exercise, DNeX will consolidate Ping’s financial performance into the Group’s earnings from July 2021 onwards.

“Since DNeX’s acquisition of a 30% stake in Ping in 2016, Ping has consistently delivered profits and generated positive operating cash flow driven by its ability to keep its operating costs below USD20 per barrel,” DNeX stated.

In the previous three financial years ended 31 December 2018, 2019 and 2020, Ping reported a cumulative audited net profit of USD34.7 million.

“As Ping will now be deemed a subsidiary as compared to an associate previously, the consolidation of Ping’s revenue and earnings will contribute positively to DNeX’s overall financial performance,” said DNeX.

Group MD of DNeX Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said the upswing in Brent oil prices to above USD70 per barrel level augurs well for the company’s Energy segment.

“Against this favourable backdrop, we will be expanding our business in the upstream O&G sector to capitalise on the upcycle. To enhance our production levels at the Anasuria Cluster, we have earmarked about USD71 million for redevelopment activities over the next five years. These activities include the drilling of infill wells, debottleneck exercise and facilities improvement work,” said Syed Zainal.

The acquisition of the additional 60% stake is valued at USD78.0 million (RM314.3 million) and will be satisfied by a combination of USD40.95 million (RM165.0 million) in cash, and the issuance of new ordinary shares in DNeX and new redeemable preference shares in DNeX Energy, for the remaining USD37.05 million (RM149.3 million).