Dagang NeXchange Berhad via subsidiary Ping Petroleum Limited has completed taking over the remaining 50% stake in UK based Avalon Oil Development from Summit Exploration and Production Limited, a wholly-owned subsidiary of Sumitomo Corporation
The cost of the stake was for cash consideration of USD5.0 million with further contingent payments, giving a total purchase consideration of USD17.0 million.
Ping which now fully owns the green field asset will accord DNeX greater flexibility in executing the project in line with the company’s growth strategy and diversification of assets. The purchase consideration was funded by Ping’s internal generated funds.
The Avalon Oil Development lies entirely in the United Kingdom North Sea block, 21/6b, 20km Northeast of Aberdeen at a water depth of 120m. In 2014, oil was discovered by the 21/6b-8 exploration well and the discovery was successfully appraised in 2017 by another find. The Avalon Oilfield has an estimated volume of 9.3 million stock tank barrels in addition it has 4.1 billion of standard cubic feet if gas resources.
“Avalon is a high-quality and low-cost development asset that complements Ping’s existing upstream portfolio in the North Sea, UK. This acquisition enables Ping’s full control of the development project, especially on the concept selection and field development plan. Our aim is to initiate procurement, project execution and drilling operations to deliver first oil by July 2023, said Tan Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX.
The Group is exploring for more opportunities to further expand Ping’s portfolio of assets in the North Sea, UK as well as Southeast Asia region.
Ping also owns several producing fields in the Anasuria Cluster that are also located in the North Sea, UK. Like the Anasuria hub, the planned Avalon hub can provide third party access to fields within its proximity. This can provide economy of scale that can further lower Ping’s average operating costs per barrel.
