KUALA LUMPUR – Dagang Nexchange Bhd (DNeX) will acquire the remaining 50% interest in the development of Avalon Oilfield not owned by PING Petroleum UK Ltd (PING UK) for US$17 million (RM71.72 million) in total.
PING UK is a wholly owned subsidiary of PING Petroleum Ltd, a 90%-owned subsidiary of DNeX Energy Sdn Bhd (DESB), a wholly owned unit of DNeX.
In a filing with Bursa Malaysia, DNeX said the acquisition follows a sale and purchase agreement entered between PING UK, and Summit Exploration and Production Ltd, the vendor.
It said the vendor has been actively sourcing a buyer for its remaining 50% interest in the development of Avalon Oilfield, as it reportedly intends to shift away from the fossil fuel business.
“As the joint owner and operator of Avalon Oilfield, the proposed acquisition will allow PING UK to avoid any potential conflicting decisions that may arise should the vendor sell its 50% interest to a third party.
“In addition, the development of Avalon Oilfield is expected to result in a significant increase in oil production and reserves for PING UK.”
DNeX said the development will also provide significant portfolio risk mitigation as PING UK’s revenues will be realised from two independent installations, namely Anasuria Cluster and Avalon Oilfield, after the first production from the latter.
The purchase consideration will be funded by internally generated funds, it added.
Avalon Oilfield is currently in the second term of its licence, which will expire in June next year. – Bernama, August 9, 2021
