Malaysia's Dialog Group has come to an agreement with a Canadian energy company for the all-cash purchase of a majority interest in a producing oil complex onshore Thailand.

Dialog said the conditional agreement would see it acquire the entire equity interest in Pan Orient Energy for a cash consideration of US$38.7 million.

A subsidiary of Pan Orient holds a 50.01% operator interest in Pan Orient Energy (Siam), which is the operator of the multi-field Block L53/48 onshore Thailand.The other co-owner of Pan Orient Energy (Siam) is Thailand's Sea Oil Energy.

Oil production from Block L53/48 was about 2700 barrels per day from seven fields in 2021, with plans to increase production in the future, said Dialog.

The current production offtake is to a local refinery, and the permit has proved plus probable oil reserves of 4.6 million barrels as at 31 December 2021.

The Malaysian buyer said the acquisition will be its first upstream venture outside of Malaysia "paving the way for Dialog to move further up the value chain in the upstream business".

The company's other upstream production assets are the Bayan licence and the D35 production sharing contract both offshore Malaysia.

"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 Dialog Group."

In a separate statement, Pan Orient confirmed the deal with Dialog, adding that its non-Thailand business would be transferred to CanAsia Energy, a new company to be owned by Pan Orient shareholders.

The rationale for the changes is that Pan Orient shareholders can realise value from their investment "while continuing to participate, through CanAsia, in the development or monetisation of the Sawn Lake heavy oil project and potential exploration and development activities in Thailand through participation in an anticipated future bid round for new oil concessions".

Concession L53 is at a mid-to-late stage of development and current oil prices are attractive, said the Canadian seller.

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