DIALOG BUYS CANADIAN FIRM FOR US$38.7M

Group says Pan Orient Energy acquisition in line with its business expansion strategy

DIALOG Group Bhd’s wholly owned, Singapore incorporated subsidiary, Dialog Systems (Asia) Pte Ltd, is acquiring the entire stake in Pan Orient Energy Corp, which is listed on the TSX Venture Exchange in Canada, for US$38.7 million.

Pan Orient Energy, through its wholly owned Singapore-incorporated subsidiary Pan Orient Petroleum Pte Ltd, holds a 50.01 per cent equity interest in Pan Orient Energy (Siam) Ltd, (POES), which is the operator of Concession L53/48, onshore Thailand.

In a filing to Bursa Malaysia, Dialog said as the concessionaire and operator of Concession L53/48, POES produced approximately 2,700 barrels of oil per day from seven oil fields in Thailand last year, with plans to increase production in the future.

POES has proved plus probable oil reserves of 4.6 million barrels as of Dec 31 last year.

Dialog currently has an oilfield service contract for Bayan field and a production sharing contract for D35/D21/J4.

Dialog said the acquisition was its first upstream venture outside of Malaysia for mature upstream oil-producing fields, paving the way for the company to move further up the value chain in the upstream business.

“The acquisition is in line with Dialog’s strategy to continue expanding and diversifying across the upstream, midstream, downstream and renewable businesses of the energy sector.

“Dialog will remain focused and steadfast in its diversification across the energy sector to strategically position the company to weather different economic and oil price cycles.

“The company is optimistic about the future prospects of POES contributing positively to Dialog’s results.”

Dialog said the purchase would be funded by internal funding and external borrowing, including proceeds from sukuk issuance.

The acquisition is expected to be completed by the third quarter of this year.

It would not affect the earnings and net assets of Dialog for the current financial year ending June 30, it added.