Cyberjaya, 18 June 2021 – Dagang NeXchange Berhad (“DNeX”) has received approval from shareholders after its Extraordinary General Meeting today for the company’s proposed acquisition of an additional 60 per cent stake in Ping Petroleum Limited (“Ping") not owned by DNeX for USD78.0 million (RM314.3 million). Upon completion of the exercise, DNeX will own 90 per cent of Ping.

Ping has contributed positively to DNeX’s earnings since the company acquired a 30 per cent stake in Ping in 2016. By acquiring an additional 60 per cent stake in Ping, DNeX will be able to consolidate the financial results from Ping moving forward and have greater control to plan and implement strategies in realising its longer term growth potential.

“It is also an opportune time for us to expand our business in the upstream oil and gas (“O&G”) sector considering the recent climb in Brent crude oil prices to levels above USD70 per barrel and the attractive growth prospects of Ping,” said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX.

He said Ping’s focus in the near term will be to unlock its untapped potential and maximise economic value from its asset portfolio as there is opportunity to further improve Ping’s production output by rejuvenating existing wells to monetise economically attractive reserves in the Anasuria Cluster.

“Moreover, as international O&G majors are divesting their upstream assets as part of their global portfolio rebalancing, we are also looking into acquiring additional late cycle producing assets in such target markets as the North Sea, Malaysia and within the region as well. Opportunities are aplenty for us to embark on investments or acquisitions of late cycle producing brownfield assets in these regions,” he said.

“Improving operational uptime and reducing cost of production are Ping’s turnaround speciality. Hence Ping has successfully kept and continues to reduce operating costs to below USD20 per barrel to ensure the company remains profitable and generate a positive operating cashflow despite the soft and volatile market conditions,” he added.

The proposed acquisition also allows greater synergies within DNeX’s existing Energy businesses namely OGPC Sdn Bhd, which provides engineering and technical support services for the O&G industry.

Ping is involved in the exploration, development and production of crude oil and natural gas
with working interests in a balanced portfolio of brownfield and greenfield assets located in
the North Sea, United Kingdom. Supported by a strong management team with extensive
O&G experience, Ping is a successful low cost O&G operator with a consistent track record of
delivering profitability and positive operating cash flow.

The independent market valuation of Ping’s entitlement in the Anasuria Cluster stood at
USD212.7 million. This is based on the proved and probable (“2P”) oil reserves estimated at
23.9 MMstb (million stock tank barrels) and the 2P gas reserves estimated at 15.1Bscf (billion
standard cubic feet) as at 30 June 2020.

The proposed acquisition is expected to be completed by the end of June 2021.