Delixy Holdings Limited (DLXY), a Singapore-based oil trader, saw its shares skyrocket on Wednesday after the company disclosed a non-binding letter of intent for a potential transaction involving an oil and gas project in Kazakhstan.

Considers Up to 48% Stake in Kazakhstan Project

Delixy signed an LOI with Luxembourg-based Caog S.a.r.l. to explore a potential acquisition or merger.

The transaction could involve up to 48% of Tarbagatay Munay, operator of the Sarybulak Oil Field in East Kazakhstan.

The company is considering an equity acquisition of the project operator. It may also pursue an asset merger involving pipelines, mineral rights and production operations.

The project sits about 90 kilometers from the China-Kazakhstan border and has supplied natural gas to China for more than 13 years through its privately owned cross-border pipeline.

Natural gas deliveries are expected to total nearly 4 billion cubic meters by April 2026.

Commercial crude oil sales are scheduled to begin in the first quarter of 2026. Tarbagatay Munay has approximately 100 million metric tons of approved original oil in place and holds full oil export rights.

“The proposed transaction represents a significant step in Delixy’s strategy to expand beyond oil trading and strengthen our participation across the energy value chain,” CEO Dongjian Xie said.

Key Challenges and Considerations

While the potential acquisition offers significant opportunities for Delixy, it also presents notable challenges.

The company must navigate complex regulatory requirements, conduct thorough due diligence and obtain several necessary approvals.

The proposed transaction remains subject to due diligence, definitive agreements, board approval and required regulatory and shareholder approvals.

Oil Trading Remains Delixy’s Primary Business

Delixy trades crude oil and oil-based products across Southeast Asia, East Asia and the Middle East.

Its portfolio includes crude oil, naphtha, gasoline, gas oil, fuel oil, asphalt, base oil, and petrochemicals. Crude oil accounts for the majority of its revenue.

East Asia represents the company’s largest geographic revenue market.

DLXY Stock Price Today

Delixy shares were up 779.52% to $3.65 at the time of publication on Wednesday, according to market data.