The Edge - Daya Materials' Fast Track into O&G Upstream
Last week, Daya Materials Bhd set a precedent for other Bursa Malaysia-listed companies when it announced the acquisition of a stake in a company with plans to list as an oil and gas special purpose acquisition company (SPAC).
Reach Energy Sdn Bhd, the SPAC in which Daya acquired a stake as an initial investor, plans to go into upstream O&G assets – in the exploration and production (E&P) segment – that are already in the development or production phase for its qualifying acquisitions.
It is hardly surprising that other O&G companies have not bought into SPACs as many may be cautious about investing in an entity whose only asset upon listing is a team of experts. However, analysts agree that Daya’s investment in Reach Energy can be seen as a strategic step to boost its upstream O&G activities.
If Reach Energy gets Securities Commission Malaysia’s approval and manages to acquire an asset within three years, then the calculated move will pay off. As an initial investor, Daya will have the advantage of being a sub-contractor for the extraction works carried out by Reach Energy.
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