KUCHING: Reservoir Link Energy Bhd’s (RLEB) shareholders have been urged to vote in favour of the proposed acquisition of the remaining 70 per cent equity interest in Propel Maxflo Sdn Bhd for RM17.24 million by its whollyowned subsidiary, Reservoir Link Sdn Bhd (RLEB), at the company’s forthcoming extraordinary general meeting (EGM) on Dec 30.
The acquisition will be made via a combination of cash payment of RM13.79 million and the balance of RM3.45 million via the issuance of about 18.688 million new RLEB shares at an issue price of RM0.1845 each.
Maxflo is principally involved in providing products and services for exploration, drilling and well intervention, enhanced oil recovery/improved oil recovery and production technologies specifically for offshore and onshore oil and gas, refining, chemical and pterochemical.
RLEB group is engaged in oil and gas field services, trading in petroleum drilling equipment and the provision of related engineering services,well perforation and well leak repair services, developing and providing oil and gas production enhancement services as well as sand management solutions.
Additionally, the group is also involved in investment holding and renewable energy activities, oil and gas extraction service activities, installation of non-electric solar energy collectors,and provision of wastewater treatment services.
RLEB’s chairman Datuk Tai Hee said after RLSB acquired the initial 30 per cent stake in Maxflo for RM7.39 million in cash, RLEB was able to assess Maxflo’s operational capabilities, key customer relationship and internal processes.
“The early integration has highlighted significant opportunities for cost efficiencies, optimisation of workflow and leveraging shared expertise, which can be fully realised through full ownership. Accordingly, our group decided to acquire the remaining 70 per cent stake a few months after the initial acquisition.
“Following the initial acquisition,our group is able to tap into the Middle East market via Maxflo’s established relationship with overseas customers in Saudi Arabia as well as extensive expertise, such as in enhanced oil recovery and improved oil recovery technologies thus further strengthening our group’s competitive position in the region.
“Further, Maxflo will serve as our strategic launchpad for expansion into key Middle East markets, especially the United Arab Emirates,Oman and Qatar.
From a tendering standpoint,the synergy resulting from full ownership of Maxflo is expected to enhance competitiveness and standing in tenders issued by customers located in the Middle East ,” he added in a circular to shareholders related to the proposed acquisition.
Tai said the proposed acquisition would also allow RLEB group to establish a costeffective supply chain through strategic resource integration, including the cross border sharing of manpower.
“Maxflo’s Saudi Arabia operations, which currently employs 19 personnel comprising management, technical, engineering, operations and administrative staff, are supported by a diverse workforce comprising personnel from Malaysia, India, Thailand, countries of the Gulf Cooperation Council,Nigeria and Sudan.
The crews are versatile and can be rapidly mobilised for projects outside Saudi Arabia or Malaysia, enabling Maxflo to deploy the right expertise whenever needed.
“This flexibility ensures seamless operational continuity, reduce idle time, improve manpower utilisation, and supports costefficiency,effectively workforce management, ultimately giving Maxflo operational agility and competitive advantage.
This multi-cultural and multidisciplinary workfore forms one of Maxflo’s key operational strengths.”
According to Tai,the Middle East remains one of the world’s most active upstream oil and gas regions, underpinned by significant and sustained capital expenditure by national oil companies, ongoing brownfield optimisation projects, well workovers, integrity programmes and intervention activities as well as a substantial and stable rig base.
“In Saudi Arabia alone, approximately 70-120 rigs support workover, completion,and intervention operations.Countries such as Saudi Arabia, Qatar, the United Arab Emirates, and Oman continue to implement multiyear drilling and production enhancement programmes, creating steady long-term demand for specialised well services, including those provided by our group.
“In light of this outlook, our group is well positioned to strengthen its presence in the Middle East, expand its service offerings, and leverage Maxflow’s existing operations and expertise to capture opportunities arising from ongoing and future projects in the region,” he added.
At the EGM.RLEB is also seeking shareholders’ green light on the company’s proposed establishment of a new long-term incentive plan (LTIP), comprising an employees share option scheme (ESOS) and a share grant scheme, of up to 15 per cent of the company’s total number of issued shares (excluding treasury shares) at any point of time during the duration of the LTIP for eligible directors and employees of RLEB and its subsidiaries (excluding dormant subsidiarie ).
