CYBERJAYA: Dagang Nexchange Bhd (DNeX) is looking into acquiring additional late cycle producing assets in the North Sea, Malaysia and within the region, said group managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir.
“International oil and gas majors are divesting their upstream assets as part of their global portfolio rebalancing. Opportunities are aplenty for us to embark on investments or acquisitions of late cycle producing brownfield assets in these regions,” he said in a statement.
At its EGM on Friday, DNeX shareholders have approved the group’s proposed acquisition of an additional 60% stake in Ping Petroleum Ltd for US$78mil (RM314.3mil).
DNeX will own 90% of Ping upon completion of the exercise, which is expected by end-June 2021.
Ping has contributed positively to DNeX’s earnings since it bought a 30% stake in 2016.
“It is also an opportune time for us to expand our business in the upstream oil and gas sector considering the recent climb in Brent crude oil prices to levels above US$70 per barrel and the attractive growth prospects of Ping,” said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, group managing director of DNeX.
He said there is opportunity to further improve Ping’s production output by rejuvenating existing wells to monetise reserves in the Anasuria Cluster.
“Improving operational uptime and reducing cost of production are Ping’s turnaround speciality.
“Hence Ping has successfully kept and continues to reduce operating costs to below US$20 (RM82) per barrel to ensure the company remains profitable and generate a positive operating cashflow despite the soft and volatile market conditions,” added Syed Zainal.
The proposed acquisition also allows greater synergies within DNeX’s existing energy businesses namely OGPC Sdn Bhd, which provides engineering and technical support services for the oil and gas industry.
Ping is involved in the exploration, development and production of crude oil and natural gas with brownfield and greenfield assets located in the North Sea, United Kingdom.