Kuwait Energy has reached an agreement with United Energy Group for a total cash acquisition worth up to $651m, the privately owned Kuwaiti company said in a statement Monday.

United Energy is an oil and gas company listed on the Hong Kong stock exchange. Its acquisition of Kuwait Energy marks its first step into the Middle East and North African oil and gas market, with upstream-focused Kuwait Energy holding assets in Egypt, Iraq, Yemen and Oman.

While giving United Energy access to the region, Kuwait Energy also hopes the deal will help provide opportunities for expansion.

“United Energy will bring considerable new investment and operational execution expertise to Kuwait Energy’s assets in Iraq and Egypt,” it said in a statement to the Hong Kong stock exchange.

"This transaction will provide the necessary financial resources to accelerate the development of the asset base,” said Mansour Aboukhamseen, Kuwait Energy’s chairman.

In May, Kuwait Energy hired US firm Perella Weinberg Partners (PWP) to advise it on the sale.

Kuwait Energy operates the Block 9 exploration and production license in southern Iraq, where it commenced production from its fourth well in June, taking total production from the block to 22,000 barrels a day (b/d). Two further wells planned for this year are expected to take Block 9 production to 30,000 b/d.

The company also operates the Siba gas field, which is being commissioned for startup by the end of 2018 producing 25 million cubic feet a day (cf/d), before ramping up to a plateau of 100 million cf/d in 2019.

Kuwait Energy made a discovery in 2017 at its Area license in Egypt. The South Kheir-1X discovery had an initial production rate of 1,900 barrels of oil equivalent a day.