DNeX completes acquisition of 60% stake in Ping Petroleum


DNeX group managing directorTan Sri Syed Zainal Abidin Syed Mohamed Tahir

KUALA LUMPUR: Dagang Nexchange Bhd (DNeX) has completed the acquisition of an additional 60% stake in Ping Petroleum Limited, raising its holdings to 90%.

This makes Ping, an upstream oil and gas (O&G) company, a subsidiary of DNeX Energy Sdn Bhd (DNeX Energy), a wholly owned subsidiary of DNeX.

“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 US$20 per barrel,” DNeX said in a statement Wednesday.

DNeX noted that in the past three three financial years ended 31 December 2018, 2019 and 2020, Ping reported a cumulative audited net profit of US$34.7mil.

Group managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said the upswing in Brent oil prices to above US$70 per barrel level augurs well for its 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 US$71mil for redevelopment activities over the next five years. These activities include the drilling of infill wells, debottleneck exercise and facilities improvement work,” Syed Zainal said.

He added that the group expects better contribution from Ping amid the rising oil prices driven by higher global oil demand as economies reopen in many parts of the world.

To recap, the acquisition of the additional 60% stake is valued at US$78mil (RM314.3mil) and will be satisfied by a combination of US$40.95mil (RM165mil) in cash, and the issuance of new ordinary shares in DNeX and new redeemable preference shares in DNeX Energy, for the remaining US$37.05mil (RM149.3mil).

Ping will be led by Zainal Abidin Jalil as CEO and Datuk Robert Fisher will serve as chairman of Ping post acquisition.

Fisher currently serves as independent non-executive director of DNeX and Zainal Abidin currently sits on DNeX’s board as executive director.

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DNeX , Ping Petroleum , Brent , O&G

   

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