KUALA LUMPUR (April 27): Dagang NeXchange Bhd (DNeX) has received the approval of its shareholders for the acquisition of a 30% stake in Ping Petroleum Ltd, for US$10 million (RM39.14 million), to expand its oil and gas (O&G) operations.

In a statement today, DNeX said the total acquisition cost will be funded by internal and borrowed funds.

"Through this move, we will be able to build our capability as an upstream O&G player via Ping, and tap into the expertise of Ping's human capital who are equipped with vast experiences in this business," said DNeX group managing director Zainal Abdul Jalil.

He noted that Ping had jointly entered into sale and purchase agreements with Hibiscus Petroleum Bhd, for each to acquire a 50% stake in the Anasuria Cluster O&G fields from Shell UK Ltd, Shell EP Offshore Ventures Ltd and Esso Exploration and Production UK Ltd.

Zainal added that the opportunity to participate in the oil cluster will grant the group the necessary expertise to be an upstream O&G player through Ping, to bid for more regional O&G jobs in the future.

"Our entry into the energy sector takes a medium- and long-term view whereby the prospect of energy business remains positive in the long run, despite the current soft market conditions due to the volatility in oil prices," he said.

He expects the acquisition to contribute to DNeX's future earnings, going forward.

DNeX closed unchanged at 23 sen today, giving it a market capitalisation of RM178.31 million.