KUALA LUMPUR: Dagang Nexchange Bhd (DNeX) will acquire the remaining 50 per cent interest in the development of Avalon Oilfield not owned by PING Petroleum UK Ltd (PING UK) for $17.0 million (RM71.72 million) in total.
PING UK is a wholly owned subsidiary of PING Petroleum Ltd (PING), which in turn is a 90 per cent owned subsidiary of DNeX Energy Sdn Bhd (DESB), a wholly owned subsidiary of DNeX.
In a filing with Bursa Malaysia, DNeX said the acquisition was following a sale and purchase agreement entered between PING UK and Summit Exploration and Production Ltd (Vendor).
It said the Vendor has been actively sourcing for a buyer for its remaining 50 per cent interest in the development of the Avalon Oilfield as it reportedly intends to shift away from the fossil fuel business.
“As the joint-owner and operator of the Avalon Oilfield, the proposed acquisition would allow PING UK to avoid any potential conflicting decisions which may arise should the Vendor sell its 50 per cent interest to a third party.
“In addition, the development of the Avalon Oilfield is expected to result in a significant increase in oil production and reserves for PING UK,” it said.
DNeX said the development would also provide significant portfolio risk mitigation as PING UK’s revenues would be realised from two independent installations namely from the Anasuria cluster and the Avalon Oilfield after the first production from the Avalon Oilfield.
The purchase consideration would be funded by internally generated funds, it added.
The Avalon Oilfield is currently in the second term of its licence, which will expire in June 2022. – Bernama
