KUALA LUMPUR – Dagang NeXchange Bhd’s (DNeX) wholly owned subsidiary DNeX Energy Sdn Bhd has acquired an additional 60% stake in Ping Petroleum Ltd valued at US$78 million (RM323.9 million), expanding its holdings to 90%.
Ping is an upstream oil and gas company with a balanced portfolio of producing and developing assets in the Anasuria Cluster located in the North Sea of the United Kingdom.
In a statement today, DNeX, an IT services provider, said the acquisition exercise will be satisfied by a combination of a US$40.95 million cash consideration and the issuance of new ordinary shares in the group.
It also includes new redeemable preference shares in DNeX Energy for the remaining US$37.05 million.
With the acquisition, DNeX will consolidate Ping’s financial performance into the group’s earnings from next month.
Since DNeX’s acquisition of a 30% stake in Ping in 2016, it said, the latter has consistently delivered profits and generated a positive operating cash flow, driven by its ability to keep its operating costs below US$20 per barrel.
“In the previous three financial years ended December 31, 2018, 2019 and 2020, Ping reported a cumulative audited net profit of US$34.7 million.
“As Ping will now be deemed a subsidiary instead of an associate, the consolidation of Ping’s revenue and earnings will contribute positively to DNeX’s overall financial performance.”
Group managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir said the upswing in Brent crude prices to above US$70 per barrel augurs well for DNeX’s energy segment.
“Against this favourable backdrop, we will expand 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$71 million for redevelopment activities over the next five years.”
These activities include the drilling of infill wells, a debottlenecking exercise, and improvements made to facilities.
Syed Zainal Abidin said being in the driver’s seat allows the group greater flexibility to plan and implement long-term strategies to realise Ping’s growth potential.
“The shift in the investment of major oil players to energy transition and renewable energy has presented us with opportunities to acquire mature and producing O&G fields at attractive prices.
“Ping’s expansion plan will be directed to unlock the potential of other brownfield assets within the UK and Southeast Asia.”
The overall outlook for DNeX Energy is promising, with a line-up of exciting developments coming on-stream, he said.
He added that better contribution from Ping is expected amid rising oil prices, driven by higher global demand as economies around the world reopen.
On another note, the group said post-acquisition, Ping will be led by Zainal Abidin Jalil as managing director and Datuk Robert Fisher as chairman.
Fisher currently serves as DNeX independent non-executive director, while Zainal Abidin sits on its board as executive director. – Bernama, June 30, 2021
