Corporate M&A

DneX Signs Agreement to Acquire Ping Petroleum

By Shivangi Jain
August 26, 2020
2 minutes read
Signing an Agreement

Malaysian diversified investment company Dagang NeXchange Bhd (DNeX) has signed a non-binding Heads of Agreement (HoA) to acquire the remaining 70% stake of Ping Petroleum Ltd. for an undisclosed consideration.

DNeX currently holds a 30% stake in Ping Petroleum through its subsidiary, DNeX Energy Sdn Bhd. Ping Petroleum’s founders Mr. David Roy Phillips, Mr. Ning Zhang, Mr. Paul A. Baltensperger, and Mr. Ju Ling Hong (collectively 56%) and other undisclosed shareholders (14%) hold the remaining 70%.

Under the terms of the HoA, DNeX will acquire the 25,000,000 shares of Ping Petroleum that it does not already own (representing 70% of the issued and paid-up share capital of the company). Upon completion, Ping Petroleum will operate as a wholly-owned subsidiary of DNeX, which shall assist the company to raise funds to finance the working capital or capital expenditure of Ping Petroleum.

DNeX is engaged in exploration, development, and production operations in Malaysia and the UK North Sea. The company is also engaged in providing oil fields services, and trading and supplying equipment to energy sector companies in Malaysia, United Kingdom, Indonesia, Bangladesh, and Thailand.

Aberdeen-based Ping Petroleum focuses on the exploration, development, and production of oil and natural gas assets in the UK North Sea. The company currently holds working interests in the Anasuria Cluster, Block 21/6b (Avalon Prospect), Block 15/16d (Ranger Prospect) Block 15/17c, Block 15/18c and Block 22/14c in the Central North Sea. During H1-2020, the company had proved and probable reserves (2P Reserves) of 24.8 million barrels of oil equivalent (MMboe).

“The proposal will enable DNeX to benefit from Ping’s future earnings in view of Ping’s potential to grow organically with its well-balanced portfolio of production, development and exploration assets,” DNeX said in a press release.

The transaction is subject to customary closing conditions, including signing of the definitive Share Sale and Purchase Agreement (SPA), approval by the board of directors and shareholders of DNeX and Ping Petroleum, and approval by regulatory authorities in Bermuda, United Kingdom, and Malaysia. The HoA shall expire on October 31st, 2020 unless extended to such other date as the parties shall mutually agree or the date the SPA is executed, whichever is the earlier.

MIDF Investment is acting as financial advisor to DNeX.

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