Cyberjaya, 30 June 2021 – Dagang NeXchange Berhad (“DNeX”) has completed the acquisition of an additional 60 per cent stake in Ping Petroleum Limited (“Ping"), expanding its holdings to 90 per cent. This makes Ping a subsidiary of DNeX Energy Sdn Bhd (“DNeX Energy”), a wholly owned subsidiary of DNeX. Ping is an upstream oil and gas (“O&G”) company, with a balanced portfolio of producing and developing O&G assets in the Anasuria Cluster located in North Sea, United Kingdom.

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 per cent 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 USD20 per barrel.

In the previous three financial years ended 31 December 2018, 2019 and 2020, Ping reported a cumulative audited net profit of USD34.7 million. As Ping will now be deemed a subsidiary as compared to an associate previously, the consolidation of Ping’s revenue and earnings will contribute positively to DNeX’s overall financial performance.

“The upswing in Brent oil prices to above USD70 per barrel level augurs well for our 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 USD71 million for redevelopment activities over the next five years. These activities include the drilling of infill wells, debottleneck exercise and facilities improvement work,” said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX.

“Being in the driver’s seat now allows us greater flexibility to plan and implement longer term strategies to realise Ping’s long-term growth potential. The shift in investment of major oil players to energy transition and renewable energy sector has presented us with opportunities to acquire mature and producing O&G fields at attractive prices. Ping’s expansion plans will be directed to expand and unlock the potential of other brownfield assets within the United Kingdom (“UK”) and Southeast Asia region.”

He also added that the overall outlook of DNeX’s Energy segment is promising with the lineup of exciting developments coming on-stream. 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 per cent stake is valued at USD78.0 million (RM314.3 million) (Exchange rate USD1.00: RM4.03) and will be satisfied by a combination of USD40.95 million (RM165.0 million) in cash, and the issuance of new ordinary shares in DNeX and new redeemable preference shares in DNeX Energy, for the remaining USD37.05 million (RM149.3 million).

Ping will be led by Encik Zainal Abidin Jalil as Managing Director and Dato' Robert Fisher will serve as Chairman of Ping post acquisition. Dato’ Robert Fisher currently serves as Independent Non-Executive Director of DNeX and Encik Zainal Abidin Jalil currently sits on DNeX’s board as Executive Director.

“We look forward to the significant contributions Dato’ Robert Fisher and Zainal Abidin Jalil will bring to Ping. With their track record and deep expertise in energy sector, we believe they are able to drive Ping to become a leading global upstream oil and gas company. We are truly excited to be in this exciting new phase for Ping,” said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir.

Dato’ Robert Fisher has some 45 years of experience in the oil and gas industry. He was chairman and managing director of the ExxonMobil Subsidiaries in Malaysia from 2003 until 2006, where he oversaw all aspects of ExxonMobil’s business including managing relationships with the Government of Malaysia, joint venturers, Bursa Malaysia and stakeholders.

Zainal Abidin Jalil has more than 30 years of experience in the oil and gas industry. He had a long career at ExxonMobil, spanning 28 years in various managerial and leadership capacities at the multinational company's business units and operations worldwide. He has in depth knowledge of major hydrocarbon producing areas in West Africa, North America and Asia Pacific in addition to leadership experience as Malakoff Chief Executive Officer overseeing power business in the Middle East, North Africa, South East Asia and Australia.