Dialog Group Berhad and its wholly owned Singapore incorporated subsidiary, Dialog Systems (Asia) Pte. Ltd. has entered into a conditional agreement with Canadian oil producer Pan Orient Energy Corp. to acquire the entire equity interest for a cash consideration of USD 38.7 million (or approximately RM 170 million).
POEC is an Alberta, Canada incorporated corporation with its shares listed on the TSX Venture Exchange, through its wholly-owned Singapore incorporated subsidiary Pan Orient Petroleum Pte. Ltd. holds 50.01% equity interest in Pan Orient Energy (Siam) Ltd. which is the operator of Concession L53/48, onshore Thailand. Upon finalisation of the proposed acquisition through the plan of arrangement, POEC will cease to be listed and Dialog will acquire the delisted POEC holding 100% equity interest in Pan Orient Petroleum Pte. Ltd. which in turn owns 50.01% in POES.
As concessionaire and operator of Concession L53/48, POES produced approximately 2,700 barrels of oil per day from 7 oil fields in Thailand in 2021 with plans to increase production in the future. The current production offtake is to a local refinery. POES has 2P (proved plus probable) oil reserves of 4.6 million barrels. DIALOG presently has an Oilfield Service Contract for Bayan field since 2012 and a Production Sharing Contract for D35/D21/J4 since 2014. The Proposed Acquisition is DIALOG’s first upstream venture outside of Malaysia for mature upstream oil-producing fields, paving the way for DIALOG to move further up the value chain in the upstream business.
The Proposed Acquisition is in line with DIALOG’s strategy to continue to expand and diversify across the upstream, midstream, downstream, and renewable businesses of the energy sector, thereby increasing opportunities for synergies within the group. Dialog will remain focused and steadfast in the pursuit of diversification across the energy sector to strategically position the group to weather different economic and oil price cycles and is optimistic about the future prospects of POES contributing positively to the Group’s results, which is in line with the Group’s strategy of generating long term recurring income.
The Proposed Acquisition involves the acquisition by DSAPL of the entire equity interest in POEC, subject to terms and conditions of the Agreement. POEC holds 100% equity interest in POPS which in turn owns 50.01% in POES. In addition,
POEC through other subsidiaries and joint venture companies also owns other businesses in Indonesia and Canada.
Dialog sees the move will further up the value chain in the upstream business and give the group low-risk opportunity comprising onshore producing fields, close to the customers.
