Malaysia-based UBG Bhd has signed a deal to acquire a 100% stake in Pearl Thailand (Holdings) Ltd for US$19.21 million in cash, paving the way for the company to enter the oil and gas sector and the Thai market for the first time.
The acquisition of Pearl Thailand from Pearl Energy Ltd, a regional oil and gas company, gives UBG participating interest in a six-block offshore petroleum concession in the Gulf of Thailand that contains potential new hydrocarbon basins, the company said in a statement to the Kuala Lumpur Stock Exchange.
Pearl Energy is an upstream company with exploration, development and production activities in Southeast Asia, with more than 20,000 barrels of oil equivalent per day (boed) of operated production.
Pearl Thailand, via its subsidiaries, holds a 20% stake each in four of the six blocks and 25% in the two remaining blocks.
UBG said that on completion of the acquisition, the Thai operations would become an indirect wholly owned subsidiary of UBG.
The company has launched a drilling programme across the six-block concession that covers a total area of 83,200 sq km of underexplored acreage in the Gulf of Thailand.
UBG also said it had agreed to assume the historical costs borne by the Pearl Group related to the subsidiaries' participating interests in the blocks in the amount of $16.13 million and would repay that amount to the seller.
The Malaysian company said it would use internally generated funds to pay for the acquisition.
Expansion into the energy sector is part of the group's overall plan to diversify and to take advantage of lower prices of energy amid a global slowdown.
The UBG Group is involved in the infrastructure and construction sectors as well as concession-based road maintenance.
The Malaysian business newspaper The Edge reported that the acquisition was sealed in Singapore, between UBG chairman Datuk Seri Mahmud Abu Bekir Taib and deputy chairman Syed Ahmad Alwee Alsree, and Pearl Energy president Barry O'Donnell.
The company is wholly owned by Mubadala Development Company, a business development and investment group headquartered in Abu Dhabi, United Arab Emirates.
"This tie-up with Pearl Energy will provide UBG with the exposure to exploration risks and returns while we seek to build up capacity in other segments of the oil and gas value chain," the UBG chairman was quoted as saying.
"We are on the hunt for a few more assets and businesses to make our position in the oil and gas sector meaningful for our energy business. Our current investment portfolio comprising investments in the construction and water infrastructure sectors would be more balanced with the acquisition of a few more oil and gas assets."
UBG currently holds majority stakes in the Malaysian construction company Putrajaya Perdana Bhd and the water infrastructure provider Loh & Loh Corp Bhd.
The group's other indirect concessions and infrastructure interests are in CMS Roads Sdn Bhd and CMS Pavement Tech Sdn Bhd.
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