Reach Energy gets shareholders' nod to acquire stake in Palaeontol BV

-A +A

KUALA LUMPUR (Nov 16): Shareholders in Reach Energy Bhd have approved the company's proposed acquisition of a 60% stake in Palaeontol BV, which owns an onshore oil and gas field called Emir-Oil LLP in Kazakhstan.

Reach Energy managing director Shahul Hamid Mohd Ismail said the special purpose acquisition company (SPAC) obtained 81.07% shareholders voted for the resolution of its qualifying assets (QA) acquisition.

He added that 18.93% shareholders were voted against the resolution.

"It has been a very long journey for us and I am happy we were given a chance to bring value to our shareholders," said Shahul in a press conference here today, expecting the acquisition to be sealed by end of this month.

"The hard work will now begin."

On the oil market outlook, Shahul believed the industry has entered recovery stage, as the sector had been hit by a prolonged slow period in the past two years.

"The demand is rising... we believed supply and demand will be balanced, going forward," he added.

On Nov 4, the company's EGM was adjourned after shareholders sought more time to look at the asset to be acquired.

The proposed maiden acquisition comprises a 60% stake in Palaeontol BV, which owns an onshore oil and gas field called Emir-Oil LLP in Kazakhstan, for US$154.9 million (RM638.2 million).

The onshore oilfields Reach Energy is acquiring are currently in production. According to MIE Holdings’ interim report, its Kazakhstan operation’s net production of crude oil was 599,923 barrels for the six months ended June 30, while gas was at 1.039 million mscf. 

The average selling price of its crude oil exports was US$36.44 per barrel, while in the domestic market it was US$11.60. The average price of gas was US$0.77 mscf. 

Reach Energy raised RM750 million from its IPO on Aug 15, 2014, of which 94.75% or RM710.62 million was placed in an Islamic trust.