• OQ S.A.O.C, (“OQ”) directly and indirectly through Oman Energy Trading Company Limited (“OETCL”) and Oman Oil Services Limited (“OOSL” together with OQ and OETCL, the “Selling Shareholders”) intends to offer up to 49% of OQ Gas Networks S.A.O.G. (under transformation) share capital
  • The listing on the Muscat Stock Exchange will provide investors with access to the growth of the Company, which holds a natural monopoly over essential gas transportation in Oman as the exclusive operator and owner of the Company’s natural gas transportation network (“NGTN”) in Oman.
  • The subscription period is expected to commence in September, after receiving the required approval from the Capital Market Authority of the Sultanate of Oman

Muscat, Oman: OQ Gas Networks S.A.O.G. (under transformation) (“OQGN” or the “Company”) today announces its intention to proceed with an initial public offering (the “IPO” or the “Offering”) and listing on the Muscat Stock Exchange (“MSX”), which is expected to take place in October 2023, subject to receiving the required regulatory approvals from the Capital Market Authority of the Sultanate of Oman (the “CMA”). The Company’s planned listing will allow investors to gain exposure to the exclusive operator and owner of the NGTN.

KEY DETAILS OF THE OFFERING

  • The Selling Shareholders expect to sell up to 49% of the total issued share capital of OQGN, with the Company and the Selling Shareholders retaining the right to amend the size of the Offering at any time before the end of the subscription period at their sole discretion, subject to applicable laws and the approval of the CMA. Immediately following the Offering, a minimum of 51.0% shareholding will continue to be held by OQ.
  • The Offering is being offered to eligible investors in Oman and qualified institutional and other investors in a number of countries (the "Category I Investors") and retail investors in Oman ("Category II Investors"). Further information on the eligibility requirements for participation in the Offering will be available in the Offering Document upon its publication.
  • The Subscription period for Category I and Category II investors is expected to commence in September, after receiving the required approval from the CMA.
  • Shariyah Review Bureau ("SRB") has issued a pronouncement confirming that, in its view, based on the circumstances as at the date of this pronouncement, the Offering is Sharia compliant in accordance with pertinent Sharia principles of the AAOIFI Sharia standards as of the date of this statement.
  • Admission of the Shares to trading on the MSX is expected in October 2023 (“Admission”).

DIVIDEND POLICY

  • The Company intends to adopt a semi-annual dividend distribution policy to pay dividends in cash after the Offer.
  • The Company expects to pay the first dividend distribution of OMR 33 million for the first nine months of 2023 around January 2024 and expects to pay the second dividend distribution of OMR 11 million for the last three months of 2023 around April 2024.
  • The Company currently expects to pay a dividend in respect of the fiscal year ending 31 December 2024, which will be the higher of 90% of the Company’s profit for the year ending 31 December 2024 or a 5% increase on the aggregate dividends paid for 2023.
  • For 2025, the Company expects to pay a dividend, which will be the higher of 90% of the profit for the year ending 31 December 2025 or a 5% increase on the dividends paid for 2024.
  • The Company’s ability to pay dividends is dependent on a number of factors, including the availability of distributable reserves, its capital expenditure plans and other cash requirements in future periods, as well as the necessary approvals.

Mansoor Al Abdali, Managing Director of OQGN, said: “OQGN, as the exclusive operator of the NGTN in Oman, provides critical infrastructure to deliver gas that supports the industries and economy of Oman. This listing, which we are proud to be conducting on the Muscat Stock Exchange, will allow us to move the company into the next chapter of growth. The core focus of OQGN will remain unchanged, focusing on the delivery of vital resources supporting the growth of our customers and the Sultanate of Oman. Our work is underlined by a commitment to reliability, efficiency, safety and sustainability. Together with our partners at OQ and OIA, we look forward to the listing and are excited by the opportunities it brings – to our customers, our investors, our employees, and the people of Oman”.

Talal Al Awfi, OQ Group CEO and OQGN Chairman, said: “The IPO of OQGN is part of a broader divestment programme envisioned by the government and being implemented by Oman Investment Authority (OIA) - the integrated sovereign wealth fund of the Sultanate of Oman. This marquee offering is an opportunity for Omani and international investors to participate in Oman’s Vision 2040, the long-term national development plan that aims to make Oman a prosperous, competitive and sustainable nation and to rapidly diversify its economy. The listing of OQGN, which owns and operates critical gas transportation infrastructure in Oman, is in line with this ambition while enriching the dynamically developing Omani stock market. We look forward to the listing on the MSX and are excited for what’s to come”.

DETAILS OF THE OFFERING

The Selling Shareholders intend to offer up to 49% of OQGN’s total share capital. Immediately following the Offering, a minimum of 51.0% shareholding will continue to be held by OQ. The Company and the Selling Shareholders reserve the right to amend the size of the Offering at any time prior to the end of the subscription period in their sole discretion, subject to applicable laws and the approval of the CMA.

All the shares being sold by the Selling Shareholders are existing ordinary shares and the Company will not receive any proceeds from the sale of the shares in the Offering, all of which will be paid to the Selling Shareholders. The Offering expenses will be paid by the Selling Shareholders.

The Offering will be conducted in the manner approved by the CMA and will be offered in two tranches, being carried out concurrently as defined below:

  • Category I Offer represents 70% of the total Offering (out of which 30% of the Offer Shares have been reserved for Anchor Investors) and will be made to eligible investors in Oman and qualified institutional and other investors in a number of countries.
  • Category II Offer represents 30% of the total Offering for retail investors.
  • If the aggregate demand in Category II is less than 30% of the Offer, then after full allocation to the Category II investors, the balance of the shares shall be made available to Category I investors, if there is oversubscription in Category I.

Details of the Offering will be included in the Offering Document which is expected to be published by the Company prior to subscription opening. The completion of the Offering and Admission of the shares to trading on the MSX is expected in October 2023, subject to market conditions and obtaining relevant regulatory approvals in Oman, including approval of Admission.

The shares held by the Selling Shareholders following completion of the Offering shall be subject to a lockup which starts on the date of Admission and ends 180 calendar days thereafter, subject to customary exceptions and waiver by the Joint Global Coordinators. The Company will also be subject to a lock-up starting on the date of Admission and ending 180 calendar days thereafter.

Shariyah Review Bureau ("SRB") is a Shariah Advisory firm licensed by the Central Bank of Bahrain. It has issued a pronouncement confirming that, in its view, based on the circumstances as at the date of this pronouncement, the Offering is Sharia compliant in accordance with pertinent Sharia principles of the AAOIFI Sharia standards as of the date of this statement. The pronouncement is not intended to be and does not constitute a legal, financial, or investment advice and SRB shall not bear any liability in this context. Investors are advised to conduct their own due diligence and consult with their own Sharia advisors before making any investment decisions based on the pronouncement.

Bank Muscat S.A.O.G., BofA Securities and EFG-Hermes UAE Limited (acting in conjunction with EFG Hermes UAE LLC) have been appointed as Joint Global Coordinators, and Bank Muscat has been appointed as Issue Manager.

OVERVIEW OF OQGN

OQGN holds a natural monopoly over the essential gas transportation infrastructure in Oman and is the exclusive owner and operator of the NGTN, serving critical roles in Oman as the asset owner, operator and maintenance and transportation provider of gas through the NGTN. The NGTN is a comprehensive gas transportation network encompassing a system of pipelines, metering facilities, compressor stations, gas supply stations and block-valve stations. The NGTN serves as an essential link connecting gas producers with gas consumers operating in various essential sectors requiring gas as a critical production feedstock or for power generation, such as liquefied natural gas (“LNG”), power generation and water desalination, oil and gas and industrial and commercial (e.g., petrochemical, fertiliser, aluminium and steel plants).

The Company transports gas, through the NGTN on behalf of the Shipper, which buys gas from gas producers and sells it to gas consumers. At present, there is only one Shipper, IGC, although additional Shippers may be introduced in the future. In 2022, the Company transported 39.4 BCM of gas, from six gas producers to a diverse consumer base of approximately 130 gas consumers through approximately 4,031 kms of gas pipelines, supported by three compressor stations and 25 gas supply stations, providing uninterrupted gas supply in 2022.

INVESTMENT HIGHLIGHTS

OQGN operates in the attractive investment destination of Oman

  • Oman is a resilient and stable economy, growing at a steady rate with a strong Gross Domestic Product (“GDP”) outlook (Real GDP Growth CAGR 23E-25E of 3.7%), evidenced through various ratings and supported by a young and growing population (population growth 23-25E of 3.2% with 50% of the population under 30 years old in 2023E).
  • Oman’s strategic vision, “Oman Vision 2040”, which is a national comprehensive 20-year plan, which aims for rationalisation of government expenditures, ensuring Oman is on track to achieve sustainable fiscal surplus with an economic diversification strategy and the introduction of new sources of revenue.
  • Other initiatives to transform Oman into an increasingly attractive investment destination include consolidating national assets and promoting privatization and implementing favourable regulatory changes to support Foreign Direct Investment (“FDI”) flows.

Natural monopoly over critical gas transportation infrastructure under a 50-year concession (up to 2070)

  • OQGN holds a natural monopoly over essential gas transportation infrastructure in Oman as the exclusive operator and owner of the NGTN.
  • OQGN operates under a 50-year concession expiring in 2070 granted by the Government of Oman under the Amended Concession Agreement.
  • OQGN has a strong operational track record with consistent gas availability, minimal interruptions and international certifications.

Indispensable role as the link between core Omani gas producers and gas consumers, with stable long-term demand and supply

  • OQGN’s NGTN plays the critical role of connecting gas producers with consumers through pipelines, gas supply stations, and gas compressor stations, earning transportation and connection fees.
  • OQGN serves a diverse consumer base of approximately 130 gas consumers through approximately 4,031 km of gas pipelines, transporting 39.4 BCM of gas from six gas producers in 2022. Oman has substantial gas reserves estimated to be 692 BCM in 2022 and a reserves-to-production ratio estimated at approximately 20 years.
  • The Company’s future growth is supported by Oman’s growing demand for gas, which is forecasted to range between 37.7 BCM and 54.5 BCM by 2043, coinciding with a rise in economic activity and industrialisation across Oman’s critical industries, including LNG, power, desalination, oil and gas and industrial and commercial sectors.

Established RAB framework underpinning predictable cash flows

  • The Regulatory Asset Base (“RAB”) Framework provides a regulated revenue system pursuant to which the Company charges Transportation Charges to the Shipper, as well as Connection Fees to Connected Parties that require the Company to build a Connection to the NGTN.
  • The RAB Framework aims to provide a predictable tariff-setting regime that should allow a relatively stable and cost-reflective revenue stream, with Allowed RAB Revenues not affected by changes in the price and volume of gas transported during a Price Control Period, which is currently set for a period of three years. Thus, it supports the Company in achieving stable profitability margins with resilient performance and stability against the volatility in commodity prices and gas volumes transported.
  • The Regulator determines the maximum revenue that the Company may earn from gas transportation (i.e., the Allowed RAB Revenues) based on several building blocks set out in the Amended Concession Agreement.
  • The Transportation Charges charged to the Shipper are then derived from the Allowed RAB Revenues as approved by the Regulator and the network capacity booked by the Shipper. A large majority of the Company’s income in 2022 was received from the Shipper.

Stable financial performance with a growing asset base and efficient capital structure

  • In 2022, the Company earned income of OMR 160.4 million and Regulated Adjusted EBITDA[1] of OMR 96.4 million (Regulated Adjusted EBITDA Margin[2] of 70.9%).
  • For the six months ended 30 June 2023, the Company earned income of OMR 85.0 million and Regulated Adjusted EBITDA of OMR 59.3 million (Regulated Adjusted EBITDA Margin of 78.0%). In comparison, the Company earned income of OMR 73.0 million and Regulated Adjusted EBITDA of OMR 49.0 million (Regulated Adjusted EBITDA margin of 73.1%) for the six months ended 30 June 2022.
  • The Company has also maintained an efficient capital structure, resulting in its Adjusted Net Debt-to-Regulated Adjusted EBITDA[3] of 3.3x in 2022 (4.1x in 2021) and Adjusted Net Debt-to-Regulated Asset Base[4] of 0.3x in 2022 (0.4x in 2021).
  • In June 2023, the Company entered into refinancing facilities in order to improve the Company’s long-term capital structure.

Strong growth prospects through approved near-term network expansion and long-term transformative growth initiatives

  • OQGN has strong growth prospects through Regulator-approved near-term network expansion and long-term transformative growth initiatives.
  • The Company’s growth strategy comprises three key pillars, namely (i) continued investment in natural gas transportation network growth, debottlenecking and upgrades, (ii) acquisition of gas transportation assets and (iii) expansion into transportation of other energy sources.
  • The Company’s growth strategy also contemplates utilizing its strengths and market position to play an essential role in the energy transition in Oman by facilitating hydrogen and captured carbon transportation and storage.
  • OQGN is a forward-looking organisation with ESG embedded in the Company’s strategy. The company’s strategic priorities are aligned with Oman’s ambitious sustainability agenda and it is committed to contributing to the achievement of Oman’s Net Zero goals.

Experienced management team with a strong track record of successful project deliveries

  • The Company is led by an experienced management team with a strong track record of successful delivery of projects within the gas sector.
  • The management team combines private and public experience in the oil and gas sector, both within the industry and in corporate finance.
  • The Company is led by the Managing Director, Mansoor Al Abdali, the Vice President of Finance, Khalid Al Qassabi, the Vice President of Business Development and Commercial, Saif Al Hosni and other senior management team members who have been involved in the Company’s evolution as a critical gas infrastructure asset in Oman.
  • The Company also benefits from a highly experienced and qualified Board of Directors, with decades of experience across the energy and logistics sectors. The Board members include Chairman, Talal Al Awfi (Group Chief Executive Officer, OQ Group), Deputy Chairman, Ayad Al Balushi (Chief Financial Officer, Oman Investment Authority), Fathi Al Balushi (Chief Executive Officer at Oman Brunei Investment Co), Raiya Al Salmi (Head of Organisational Excellence, OQ) and Hanaa Al-Hinai (Chief Executive Officer at Al Ahlia Insurance).

Summary of OQGN’s Financial Performance and Operating Highlights

Key Financial Highlights (In OMRm)

2020

2021

2022

H1-22

H1-23

IFRS Measures

     

Total Income

166.1

157.5

160.4

73.0

85.0

y-o-y growth

 

(5.2%)

1.9%

 

16.5%

EBITDA[5]

83.2

66.7

71.3

34.7

46.3

EBITDA Margin[6]

50.1%

42.4%

44.5%

47.5%

54.5%

Net Profit

59.3

43.1

45.6

23.4

33.1

Net Profit Margin

35.7%

27.4%

28.4%

32.0%

38.9%

RAB Measures

     

Regulated Asset Base[7]

923.1

953.2

972.1

n.a.

975.6

Regulated Adjusted Income[8]

134.0

132.0

136.0

67.1

76.0

y-o-y growth

 

(1.5%)

3.0%

 

13.3%

Regulated Adjusted EBITDA[9]

103.2

92.6

96.4

49.0

59.3

Regulated Adjusted EBITDA Margin[10]

77.1%

70.1%

70.9%

73.1%

78.0%

Adjusted Net Debt-to-Regulated Adjusted EBITDA[11]

3.8x

4.1x

3.3x

n.a.

2.8x

 

Operating KPIs

2020

2021

2022

Total Gas Delivery[12] (bn SCM)

35,101

37,292

39,380

Pipeline Length (km)

3,969

3,999

4,031

Gas Availability[13] (%)

99.9977%

99.9999%

100.0000%

-Ends-

About OQGN

OQGN holds a natural monopoly over critical gas transportation infrastructure in Oman as the exclusive owner and operator of the NGTN. OQGN aims to champion the management and development of the NGTN through innovative and sustainable solutions. With the support of its around 480 talented individuals as at 30 June 2023, the Company prioritizes maintaining high standards of operation and maintenance, which is reflected in the OQGN’s operational track-record, having delivered 99.99% gas availability over the last 10 years and recorded no gas supply interruptions in 2022. OQGN’s health and safety record is also testament to its commitment to applicable occupational health and safety standards. OQGN actively considers the interests of society at large and the economic development of Oman in the course of its operations and strives to maximize its engagement in and contribution to the Omani communities and supporting the Government’s efforts towards environmental sustainability.

For more information about OQGN, please visit: https://oqgn.om/
MEDIA ENQUIRIES
Kekst CNC (as Financial Communications Advisor)
Katherine Fennell, Director
Katherine.Fennell@kekstcnc.com  
INVESTOR RELATIONS ENQUIRIES
Ir.oqgn@oq.com
JOINT GLOBAL COORDINATORS
Bank Muscat S.A.O.G
BofA Securities
EFG-Hermes UAE Limited (acting in conjunction with EFG Hermes UAE LLC)
ISSUE MANAGER
Bank Muscat

DISCLAIMER

This announcement is an advertisement for the purposes of the Prospectus Regulation EU 2017/129 and underlying legislation. It is not a prospectus. A copy of any prospectus published by OQGN will, if approved and published, be made available for inspection on OQGN’s website at http://oqgnuat.gct.om/ipo.html, subject to certain access restrictions.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change. No obligation is undertaken to update this announcement or to correct any inaccuracies, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of OQGN to proceed with the Offering or any transaction or arrangement referred to herein. This announcement has not been approved by any competent regulatory authority. None of the Joint Global Coordinators, the Issue Manager, the Collection Agents or any of their respective subsidiaries, affiliates or any of their respective directors, officers, employees, advisers or agents are responsible for the contents of this announcement.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment whatsoever. Investors should not purchase any shares referred to in this announcement except on the basis of information in the Offering Document to be published by OQGN in due course in connection with the proposed admission of the shares to listing and trading on the MSX (the “Admission”). The Offering and the distribution of this announcement and other information in connection with the Offering in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia or Japan. These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for, or otherwise invest in, securities in the United States. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “Securities Act”) or with any securities regulatory authority of any state or other jurisdiction in the United States, or under the applicable securities laws of Canada, Australia or Japan. The securities may not be offered or sold in the United States absent registration except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the securities referred to herein may not be offered or sold in Canada, Australia or Japan or to, or for the account or benefit of, any national, resident or citizen of Canada, Australia or Japan. There will be no public offer of securities in the United States or any jurisdiction other than Oman. Copies of this announcement are not being, and should not be, distributed in or sent into the United States, Canada, Australia or Japan.

This announcement is being distributed to and is only directed at (i) persons who are outside the United Kingdom; (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (iii) high net worth entities falling within Article 49(2)(a) to (d) of the Order; and (iv) persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated (all such persons in (i), (ii), (iii) and (iv) above, together, being referred to as “relevant persons”). Any invitation, offer or agreement to subscribe for, purchase or otherwise acquire securities will be engaged in only with relevant persons. Any person who is not a relevant person should not act or rely on this announcement or any of its contents. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons. In the United Kingdom, this announcement is only addressed to and is only directed at “qualified investors” within the meaning of the Prospectus Regulation (as defined below) as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018, and no person that is not a qualified investor may act or rely on this announcement or any of its contents.

In any member state of the European Economic Area, this announcement is only addressed to and is only directed at “qualified investors” in such member state within the meaning of Article 2(e) of Regulation EU 2017/1129 (the “Prospectus Regulation”), and no person that is not a qualified investor may act or rely on this announcement or any of its contents.

In the Sultanate of Oman: this announcement and the information contained in it is strictly private and confidential and is being distributed to a select number of investors/recipients and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purpose. If you are in any doubt about the contents of this announcement, you should consult an authorised financial adviser. This announcement does not constitute an offer of securities in Oman as contemplated by the Commercial Companies Law of Oman (Royal Decree 18/2019) or Article 28 of the Omani Securities Law (Royal Decree 46/2022) (the “Relevant Oman Laws”). This announcement will only be made available to investors in Oman in accordance with the provisions of Relevant Oman Laws.  This announcement has not been filed with or approved by the Omani Capital Market Authority or any other regulatory authority in Oman. Any person in Oman to whom this announcement is made available and who invests in the securities concerned will be deemed to have represented and warranted that they are sophisticated investors (i.e., investors that have experience in investing in local and international securities, are financially solvent and have knowledge of the risks associated with investing in securities) and are acquainted with the documents relating to the concerned issuance and the risks and rewards associated with investment in such securities.

In the United Arab Emirates (outside of the financial free zones established pursuant to UAE Federal Law No.8 of 2004): this announcement is strictly private and confidential and is being distributed to a limited number of investors/recipients and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purpose. If you are in any doubt about the contents of this announcement, you should consult an authorised financial adviser. By receiving this announcement, the person or entity to whom it has been issued understands, acknowledges and agrees that this announcement has not been approved by or filed with the United Arab Emirates (“UAE”) Central Bank, the Securities and Commodities Authority (the “SCA”) or any other authorities in the UAE. No marketing of any financial products or services has been or will be made from within the UAE other than in compliance with the laws of the UAE and no subscription to any securities or other investments may or will be consummated within the UAE. Securities may not be marketed, offered or sold directly or indirectly to the public in the UAE without the approval of the SCA. This announcement does not constitute a public offer of securities in the UAE in accordance with the Federal Commercial Companies Law, No. 32 of 2021 (as amended or replaced from time to time) or otherwise. This announcement may be distributed in the UAE only to “professional investors” (as defined in SCA Board of Directors’ Chairman Decision No.13/R.M of 2021 (as amended from time to time)) and may not be provided to any person other than the original recipient. Nothing contained in this announcement is intended to constitute investment, legal, tax, accounting or other professional advice. This announcement is for your information only and nothing in this announcement is intended to endorse or recommend a particular course of action. Any person considering acquiring securities should consult with an appropriate professional for specific advice rendered based on their respective situation.

In the Dubai International Financial Centre (“DIFC”): this announcement relates to an Offering which is not subject to any form of regulation or approval by the Dubai Financial Services Authority (“DFSA”). The DFSA has not approved this announcement nor has any responsibility for reviewing or verifying any document or other documents in connection with the Offering. Accordingly, the DFSA has not approved this announcement or any other associated documents nor taken any steps to verify the information set out in this announcement, and has no responsibility for it. The Offering has not been offered and will not be offered to any persons in the DIFC except on that basis that an offer is:

  • an “Exempt Offer” in accordance with the Markets Rules (“MKT”) module of the DFSA Rulebook; and
  • made only to persons who meet the “Deemed Professional Client” criteria set out in the Conduct of Business (“COB”) Module of the DFSA Rulebook (the “COB Module”).

This announcement must not, therefore, be delivered to, or relied on by, any other type of person. The Offering to which this announcement relates may be illiquid and/or subject to restrictions on its resale. Prospective purchasers should conduct their own due diligence on the Offering. The DFSA has not taken steps to verify the information set out in this announcement, and has no responsibility for it. If you do not understand the contents of this Offering or are unsure whether the securities to which this Offering relates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial adviser. This announcement is only addressed to and is only directed at “Deemed Professional Clients” as defined in the DFSA Rulebook, COB Module. This announcement is not directed at Retail Clients as defined in the COB Module.

In the Abu Dhabi Global Market (“ADGM”): this announcement relates to an Offering which is not subject to any form of regulation or approval by the Financial Services Regulatory Authority (“FSRA”). The FSRA has not approved this announcement nor has any responsibility for reviewing or verifying any document or other documents in connection with the Offering. Accordingly, the FSRA has not approved this announcement or any other associated documents nor taken any steps to verify the information set out in this announcement, and has no responsibility for it. The shares have not been offered and will not be offered to any persons in the ADGM except on the basis that an offer is: (i) an “Exempt Offer” in accordance with the FSRA Financial Services and Markets Regulations 2015 and Markets Rules; and (ii) made only to persons who meet the “Deemed Professional Client” criteria set out in the FSRA Conduct of Business Rulebook. The FSRA has not taken steps to verify the information set out in this announcement, and has no responsibility for it. If you do not understand the contents of this Offering or are unsure whether the securities to which the Offering relates are suitable for your individual investment objectives and circumstances, you should consult an authorised financial adviser.

In the Kingdom of Saudi Arabia: this announcement may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Rules on the Offer of Securities and Continuing Obligations issued by the Board of the Capital Market Authority (the “Capital Market Authority”) pursuant to resolution number 3-123-2017, dated 27 December 2017G (as amended by resolution of the Board of the Capital Market Authority number 1-94-2022 dated 22 August 2022G). The Capital Market Authority does not make any representation as to the accuracy or completeness of this announcement, and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this announcement. Prospective purchasers of the securities referred to herein should conduct their own due diligence on the accuracy of the information relating to the securities.

In the Kingdom of Bahrain: any offering of securities of the Company to which this announcement relates does not and will not constitute an offer of securities in the Kingdom of Bahrain in terms of Article (81) of the Central Bank and Financial Institutions Law 2006 (Decree Law No. 64 of 2006). This announcement has not been and will not be registered as a prospectus with the Central Bank of Bahrain (the “CBB”). Accordingly, no securities may be offered, sold or made the subject of an invitation for subscription or purchase nor will this announcement or materials be used in connection with any offer, sale or invitation to subscribe or purchase securities, whether directly or indirectly, to persons in the Kingdom of Bahrain, other than as marketing to accredited investors for an offer outside the Kingdom of Bahrain.

The CBB has not reviewed, approved or registered this announcement and it has not in any way considered the merits of the securities to be marketed for investment, whether in or outside the Kingdom of Bahrain. Therefore, the CBB assumes no responsibility for the accuracy and completeness of the statements and information contained in this announcement and expressly disclaims any liability whatsoever for any loss howsoever arising from reliance upon the whole or any part of the content of this announcement. No offer of securities will be made to the public in the Kingdom of Bahrain and this announcement must be read by the addressee only and must not be issued, passed to, or made available to the public generally.

In Kuwait: the securities of the Company to which the announcement relates have not been and will not be offered, sold, promoted or advertised in Kuwait except on the basis that an offer is made in compliance with Decree Law No. 31 of 1990 and the implementing regulations thereto, as amended, and Law No. 7 of 2010 and the bylaws thereto, as amended governing the issue, offering and sale of securities. No private or public offering of any securities is being made in Kuwait, and no agreement relating to the sale of any securities will be concluded in Kuwait. No marketing or solicitation or inducement activities are being used to offer or market any securities in Kuwait.

If you do not understand the contents of this announcement you should consult an authorised financial adviser.

None of the Selling Shareholders, OQGN, the Joint Global Coordinators, the Issue Manager, the Collection Agents or any of their respective subsidiaries, affiliates or any of their respective directors, officers, employees, advisers, agents or any other person(s) accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or whether any information has been omitted from this announcement) or any other information relating to OQGN or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement does not constitute a recommendation concerning the Offering. The price and value of securities and any income from them can go down as well as up and you could lose your entire investment. Past performance is not a guide to future performance. Information in this announcement cannot be relied upon as a guide to future performance. Before purchasing any securities in OQGN, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Offering Document, when published. There is no guarantee that the Offering will take place and potential investors should not base their financial or investment decisions on the intentions of OQGN or any other person in relation to the Offering at this stage. Nothing contained herein constitutes or should be construed as: (i) investment, tax, financial, accounting or legal advice; (ii) a representation that any investment or strategy is suitable or appropriate to your individual circumstances; or (iii) a personal recommendation to you. Potential investors should consult a professional adviser as to the suitability of the Offering for the person(s) concerned.

This announcement contains certain “forward-looking statements” which relate to, among other things, the Company’s plans, objectives, goals, targets, strategies, future operational performance and anticipated developments in markets in which the Company operates and in which it may operate in the future. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Company’s control and all of which are based on the Company’s current beliefs and expectations about future events. These forward-looking statements generally can be identified by the use of forward-looking terminology, including terms such as “aim”, “anticipate”, “assume”, “believe”, “continue”, “could”, “expect”, “estimate”, “goal”, “intend”, “may”, “objective”, “plan”, “potential”, “predict”, “project”, “risk”, “shall”, “should”, “target”, “will”, “will continue”, “will pursue”, “would”, and their negative, or other variations thereon or comparable terminology. Similarly, statements that describe the Company’s strategies, objectives, plans, goals, future events or intentions are also forward-looking statements. They appear in a number of places throughout this announcement and include statements regarding intentions, beliefs and current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies, dividend policy and the industry in which the Company operates. These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions and are based on the beliefs of the Company’s management, as well as the assumptions made by, and information currently available to, the Company’s management. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual outcomes, including among other things, the Company’s results of operations, financial condition, cash flows, liquidity, financial projections, financial targets and growth to differ materially from those contemplated by the relevant forward-looking statement. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this announcement. The Selling Shareholders, OQGN, the Joint Global Coordinators, the Issue Manager and the Collection Agents and/or their respective affiliates, expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law.

The date of Admission may be influenced by things such as market conditions. The Company may decide not to go ahead with the Offering and there is no guarantee that Admission will occur, at all or in accordance with the timing indicated in this announcement. You should not base your financial decisions on OQGN’s intentions in relation to Admission at this stage.  Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested.  Persons considering making such investments should consult an authorised person specialising in advising on such investments. Neither this announcement, nor the documents referred to herein, constitute a recommendation concerning the Offering. The value of shares can decrease as well as increase and potential investors must be able to bear the risk of loss, including a total loss, on their investment. Potential investors should consult a professional advisor as to the suitability of the Offering for the person concerned.

Bank Muscat SAOG (“Bank Muscat”), EFG-Hermes UAE Limited, EFG Hermes UAE LLC (acting in conjunction with EFG Hermes UAE Limited) (together, “EFG”) and Merrill Lynch International (“BofA Securities”) have been appointed as joint global coordinators (collectively, the “Joint Global Coordinators”) and Bank Muscat has been appointed as issue manager of the Offering (the “Issue Manager”). BofA Securities is not acting on, or otherwise involved in, the Offering to investors in Oman. Bank Muscat is authorised and regulated by the Central Bank of Oman (“CBO”) and the CMA. EFG-Hermes UAE Limited is authorised and regulated by the Dubai Financial Services Authority. EFG Hermes UAE LLC is authorised and regulated by the UAE Securities and Commodities Authority. BofA Securities is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Ahli Bank SAOG, Bank Dhofar SAOG, Bank Muscat, EFG Hermes Oman LLC (Vision Capital), Horizons Capital Markets SAOC, National Bank of Oman SAOG, Oman Arab Bank SAOG, Sohar International SAOG, Ubhar Capital SAOC and United Securities LLC have been appointed as collection agents (the “Collection Agents”).

The Joint Global Coordinators, the Issue Manager and the Collection Agents are acting exclusively for the Company and the Selling Shareholders and no one else in connection with the Offering. They will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other than the Company and the Selling Shareholders for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Offering, each of the Joint Global Coordinators, the Issue Manager and the Collection Agents and any of their affiliates may take up a portion of the shares in the Offering as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in the Offering Document, once published, to the shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, each of the Joint Global Coordinators, the Issue Manager and the Collection Agents and any of their affiliates acting in such capacity. In addition, certain of the Joint Global Coordinators, the Issue Manager and the Collection Agents or their affiliates may enter into financing arrangements (including swaps, warrants or contracts for differences) with investors in connection with which they or their affiliates may from time to time acquire, hold or dispose of shares. None of the Joint Global Coordinators, the Issue Manager or the Collection Agents or any of their respective affiliates intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

The contents of the Company’s website are not incorporated by reference into, and do not form part of, this announcement.

NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

This announcement is not a prospectus and is not an offer of securities for sale or subscription in any jurisdiction, including in or into the United States, Canada, Australia or Japan.

Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Any offer to acquire shares pursuant to the potential offering will be made pursuant to, and any investor should make its investment decision solely on the basis of the information that is contained in, as the case may be, the final prospectus or international offering memorandum (each an “Offering Document”, including in each case any supplement thereto), which may be published by OQ Gas Networks SAOG (under transformation) ("OQGN" or the "Company") in due course in connection with the admission of its ordinary shares to trading on the Muscat Stock Exchange (the "MSX"). Any published final prospectus is subject to approval of the Capital Market Authority of the Sultanate of Oman (the “CMA”).

[1] “Regulated Adjusted EBITDA” as the sum of profit for the period before interest income on short-term deposits, finance cost, taxation and depreciation expenses, plus construction cost, receipts against concession receivables, receipts against contract assets (due from the Shipper), minus construction revenue, interest on concession receivables and contract assets (which are derived from the Financial Statements in accordance with IFRS) and other adjustments (derived from the regulatory financial statements)

[2] “Regulated Adjusted EBITDA Margin” as Regulated Adjusted EBITDA divided by Regulated Adjusted Income for the period, expressed as a percentage

[3] “Adjusted Net Debt-to-Regulated Adjusted EBITDA” as Adjusted Net Debt divided by Regulated Adjusted EBITDA. Adjusted Net Debt is defined as the Total Debt minus cash and cash equivalents and short term deposits, with the underlying figures for the calculation of Adjusted Net Debt being the same in the Financial Statements in accordance with IFRS and the regulatory financial statements

[4] “Adjusted Net Debt-to-Regulated Asset Base” as Adjusted Net Debt divided by Regulated Asset Base., with the underlying figures for the calculation of Adjusted Net Debt being the same in the Financial Statements in accordance with IFRS and the regulatory financial statements.

[5] “EBITDA” as profit for the period before interest income on short-term deposits, finance cost, taxation and depreciation expenses

[6] “EBITDA Margin” as EBITDA for the period divided by income, expressed as a percentage

[7] “Regulated Asset Base” as the sum of the closing balance of (i) Fixed Assets, calculated as the opening balance of fixed assets plus additions and transfers from construction work in progress (“CWIP”) to Fixed Assets minus depreciation, transfers from Fixed Assets to investment property and penalty adjustments during the period, and (ii) CWIP, calculated as the opening balance of CWIP plus additions and transfer between CWIP and other assets minus transfers from CWIP to Fixed Assets, transfers from related party to CWIP, and penalty adjustments during the period.

[8] “Regulated Adjusted Income” as the sum of Regulated Revenue, other income and interest income received on fixed deposits. Regulated Revenue is defined as the sum of (i) allowed return on capital (driven by the Company’s weighted average cost of capital (“WACC”) and the Regulated Asset Base) (“Allowed Return on Capital”), (ii) depreciation allowance (“Depreciation Allowance”), (iii) taxation allowance (“Taxation Allowance”), (iv) allowed operating expenditures (“Allowed Operating Expenditure”), and (v) allowed pass-through expenditure (“Pass-through Expenditures”), subject to (vi) annual reconciliation of the planned and actual values of the Allowed RAB Revenues (i.e., the sum of the planned value of Allowed RAB Revenue and other revenues generated from RAB resources) and Pass-through Expenditures (the “Annual Reconciliation”) and (vii) Price Control Reconciliation (referred to as revenue setting period reconciliation in the RAB Rules) of the planned and actual values for the Allowed Return on Capital, Depreciation Allowance and Taxation Allowance (“RSP Reconciliation”);

[9] “Regulated Adjusted EBITDA” as the sum of profit for the period before interest income on short-term deposits, finance cost, taxation and depreciation expenses, plus construction cost, receipts against concession receivables, receipts against contract assets (due from the Shipper), minus construction revenue, interest on concession receivables and contract assets (which are derived from the Financial Statements in accordance with IFRS) and other adjustments (derived from the regulatory financial statements)

[10]  “Regulated Adjusted EBITDA Margin” as Regulated Adjusted EBITDA divided by Regulated Adjusted Income for the period, expressed as a percentage

[11] “Adjusted Net Debt-to-Regulated Adjusted EBITDA” as Adjusted Net Debt divided by Regulated Adjusted EBITDA. Adjusted Net Debt is defined as the Total Debt minus cash and cash equivalents and short-term deposits, with the underlying figures for the calculation of Adjusted Net Debt being the same in the Financial Statements in accordance with IFRS and the regulatory financial statements.

[12] “Total gas delivery” as the aggregate of all gas consumption recorded for all gas consumers through the NGTN

[13] “Gas availability” as the percentage of the undelivered volume of gas by the total delivered volume in a given year