KUALA LUMPUR (Aug 26): Dagang NeXchange Bhd (DNeX) has backtracked from its plan to dispose of its 30% stake in Ping Petroleum Ltd, and instead wants to buy up the remaining 70% stake in the oil and gas (O&G) exploration and production (E&P) outfit.

In a filing today, DNeX said it has signed a heads of agreement (HoA) with Ping, to make the offer to the 70% shareholders through Ping. The HoA, it said, is effective until end-October.

The group said in July last year that it wanted to dispose of the 30% stake in the company, which has contributed to around 25% of its pre-tax profit over the past four years, for no less than RM250 million.

DNeX acquired the 30% stake in Ping for US$10 million in 2015 (or RM42.05 million then).

While it has not stated a price for the acquisition of the 70% stake, DNeX said it plans to pay for the acquisition via a combination of cash and new DNeX shares.

Ping's main business is the 50% joint upstream O&G operating company with Hibiscus Petroleum Bhd, which operates in the Anasuria cluster in the North Sea in the UK. It also has an E&P unit in Malaysia.

"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.

"Ping is estimated to have proved and probable (2P) oil reserve of 24.8 million barrels equivalent," it said.

Shares in DNeX closed unchanged at 24 sen today, valuing the group at RM421.94 million.

Edited by S Kanagaraju