KUALA LUMPUR | By 0107 GMT, SapuraKencana shares were up 5.4 percent at 4.30 ringgit per share, outperforming the broader market's .KLSE 0.2 percent rise, as investors cheered the company's maiden expansion into the business of owning and operating fields.
"In essence we are acquiring a proven oil and gas operator with a balanced portfolio of producing and discovered fields and exploration assets in peninsula Malaysia and Sabah and Sarawak," SapuraKencana CEO, Shahril Shamsuddin, said in a statement.
The sale signals an aggressive diversification strategy, making the firm Malaysia's fourth-largest producer after oil majors like Shell (RDSa.L) and Exxon-Mobil (XOM.N).
"As a field owner and operator, this business will require different set of operating principles and as such we will manage this new business division separately as an independent subsidiary," he said.
SapuraKencana will hold interests in nine production-sharing blocks offshore Malaysia, giving the company an opportunity to learn the business and look at ways to boost the productivity of the fields - some of which are in natural decline.
The deal is subject to approval from state oil firm and industry regulator Petronas PETR.UL, which is in charge of awarding all production-sharing blocks in the country and has been tasked with boosting the production of marginal and depleted fields.
