On June 26, 2024, Strong Petro's direct wholly-owned subsidiary, Saint Ocean Investment Limited, as buyer, entered into a purchase agreement with SH Energy Fund 1, as seller, under which the buyer conditionally agreed to acquire and the seller conditionally agreed to sell all the shares of the target company, Success Plus Global Limited, for a price of US$9 million.

The valuation of the target group, which is approximately US$9.1 million, was performed by a valuer. The main assets of the target group are all participating rights in the production-sharing contract held by Panhua and the mining rights in Block 13, Daqing Zhaozhou Oilfield, China. As of the date of this announcement, the target company is 100% owned by the seller.

Upon completion, the member companies of the target group will become wholly-owned subsidiaries of the Company, and the financial performance of the target group will be consolidated into the Group's financial statements.

For the year ended December 31, 2023, due to uncertainty as to whether the production-sharing contract can be extended, the target group incurred a loss from the impairment of available oil well assets with a short useful life. In addition, this uncertainty also resulted in a delay in the drilling of new oil wells, leading to a decrease in revenue.

Despite the above situation, the board of directors, after considering (i) the Group's experience in the oil trading business; (ii) Panhua's rich knowledge and experience as a long-term operator in the oil & gas business; and (iii) the board's belief that there are no foreseeable obstacles to obtaining an extension to the production-sharing contract, believes that the acquisition is a valuable and attractive opportunity, a first and important step for the Group to enter the upstream sector of the oil industry and become a producer of oil, and is in the overall interest of the Company and its shareholders.