KUALA LUMPUR (June 7): Dialog Group Bhd's wholly-owned Singapore subsidiary Dialog Systems (Asia) Pte Ltd (DSAPL) via DSAPL’s 100%-owned Canada-based company 2432707 Alberta Ltd is buying the entire stake in Canada-listed oil and gas (O&G) firm Pan Orient Energy Corp (POEC) for US$38.7 million (about RM170 million) in Dialog’s first upstream O&G venture outside Malaysia for mature oil producing fields.

In a Bursa Malaysia filing on Tuesday (June 7), Dialog said DSAPL had on Monday entered into a conditional agreement with POEC for the proposed acquisition.

"POEC is an Alberta, Canada incorporated corporation with its shares listed on the TSX Venture Exchange. POEC, through its wholly-owned Singapore incorporated subsidiary Pan Orient Petroleum Pte Ltd (POPS), holds 50.01% equity interest in Pan Orient Energy (Siam) Ltd (POES), which is the operator of concession L53/48, onshore Thailand.

"Upon finalisation of the proposed acquisition through POEC’s plan of arrangement, POEC will cease to be listed and Dialog will acquire the delisted POEC holding 100% equity interest in POPS 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 seven 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 (proven plus probable) oil reserves of 4.6 million barrels as at Dec 31, 2021,” Dialog said.

According to Dialog, the purchase price for POEC will be funded by Dialog’s internal funding or external borrowing including proceeds from Dialog’s Islamic bond or sukuk issuance.

Barring any unforeseen circumstances, the proposed acquisition is expected to be completed by the third quarter of calendar year 2022, Dialog said.

"The proposed acquisition will not have any effect on the earnings and net assets of Dialog for the current financial year ending June 30, 2022. 

"However, the completion of the proposed acquisition will have positive effect on earnings and net assets of Dialog for the financial year ending June 30, 2023 onwards and is expected to contribute positively to the long-term future earnings of Dialog,” Dialog said.

At Bursa on Tuesday, Dialog’s share price fell six sen or 2.55% at 2:36pm to RM2.29 for a market value of about RM12.92 billion.

Dialog has 5.64 billion outstanding shares, according to its latest quarterly financial report.