KUALA LUMPUR (Jan 24): The country’s low-profile and well-connected corporate player Tan Sri Dr Azmil Khalili Khalid is taking the top post in Reach Energy Bhd as its executive chairman, just a day after he was appointed to the company’s board as a non-independent and non-executive director.

Azmil is currently the president and chief executive officer of AlloyMTD Group, a privately-held infrastructure company with interests in civil engineering and construction, manufacturing, infrastructure development, real estate and properties, and operations and maintenance. Its business spans across 15 countries.

Azmil has brought along his trusted lieutenant Tan Siew Chaing, 48, to Reach Energy’s board as the executive director, as evident in the filings with Bursa Malaysia this evening. A chartered accountant, Tan has been AlloyMTD’s Senior Vice President 1 and Head of Finance and Treasury since October 2007.

Azmil directly owns some 43.53 million shares — equivalent to 3.41% — in Reach Energy via Maybank Nominees (Tempatan) Sdn Bhd and CIMSEC (Nominees) Tempatan Sdn Bhd.

However, he also has an indirect interest in Reach Energy via his flagship company MTD Capital Bhd with an 11.68% stake, while his wife Puan Sri Nik Fuziah Nik Hussein has a 3.13% equity interest in the oil and gas outfit.

Meanwhile, Reach Energy said its instrumental founder and managing director Shahul Hamid Mohd Ismail has been redesignated as the company’s Executive Director and General Director of Emir Oil LLP.

At the same time, Reach Energy has also re-designated Izlan Izhab as anindependent and non-executive director from the chairman's post.

Reach Energy is the second company in Malaysia to graduate from special purpose acquisition company status to become a full-fledged exploration O&G company after Hibiscus Petroleum Bhd.

This is “quite a feat” as Reach Energy is the only company that had managed to obtain shareholders’ approval to buy an O&G asset when the petroleum industry is going through turbulence with the oil price crashing since 2014, said HLIB Research analyst Lim Sin Kiat in a Jan 4 note.

Reach Energy completed the acquisition on Nov 25, 2016, and the purchase price of the O&G asset in Kazakhstan has been adjusted to US$175.9 million.

Lim, which initiated coverage on Reach Energy with a “buy” call said there is a minimal downside risk at the current price point, adding that at this juncture, “the company is undervalued with oil price expectations being set too low.”

He also wrote that the market has been “pricing-in overly conservative oil price outlook which is unjustifiable given the company’s relatively low cost of production and its hugely untapped potential in its oil assets.”

“The company is expected to escalate to the next level by tapping into the reserves of a young oilfield with limited risk of straining balance sheet,” he said.

HLIB Research has assigned a target price for Reach Energy at 83 sen per share, a 27.8% upside to yesterday’s closing price of 65 sen per share.