•  
  •  
  •  
  •  
  •  
  • Untitled Document
    Untitled Document

    Chinese companies increase stake in global upstream energy assets

    The 30-day period from mid-July to mid-August was a slow one for US and global energy M&A transactions. We are only reporting five domestic deals and seven international transactions during this time.

    China Investment Corp. (CIC) and Gaz de France Suez have entered into a major cooperation framework, which will help GDF Suez in its planned expansion into Asia, where the French company sees a huge growth market. The August 8 deal, which still has to be approved by GDF's board of directors, would allow China's sovereign wealth fund to take a minority stake in the energy giant's exploration and production business, as part of a wider alliance to boost the company's exposure to the energy-hungry Asian market.

    Under the deal's terms, CIC will take a 30% stake in the upstream division of GDF for $3.3 billion and a 10% stake in the Atlantic LNG project in the Caribbean nation of Trinidad & Tobago for $850 million. This represents the largest deal by a Chinese state-controlled company since PetroChina's failed attempt to take a 50% interest in Encana's Cutbank Ridge shale assets in Canada in February.

    At $12 per proved and probable boe of reserves, the deal didn't include the usual premium that Chinese companies are willing to pay to secure global reserves. The annual EBITDA multiple of less than 5.5 also pointed more towards a deal that seeks long-term cooperation rather than a Chinese asset grab.

    The French company has been looking to reduce its debt, while focusing on organic growth and boosting its presence in the Asia-Pacific region.

    In another move by Asian companies into the North American energy sector, China's state-owned CNOOC has agreed to acquire OPTI Canada, a bankrupt Calgary-based oil sands producer, for $2.1 billion, including debt. The Canadian company's main asset is a 35% stake in the Long Lake oil sands project in Alberta, which has been plagued by technical problems and is performing below expectations.

    The move by CNOOC brings the total expenditure on upstream properties in Canada by Asian companies in the past three years to $16 billion, a figure that would have been even greater had PetroChina's $5.5 billion Montney shale farm-in with Encana not been cancelled last month. The deal will also see CNOOC join fellow Chinese state companies, PetroChina, Sinopec, and CIC in owning interests in the growing Canadian oil sands sector. CNOOC has also signed two multi-billion-dollar shale oil deals with Oklahoma City-based Chesapeake Energy in the past year.

    The latest deal has yet to receive regulatory approval from Canadian authorities, but sources in Canada do not believe this will be a major hurdle. Canada has been more open to Chinese investment than has the US, where there are significant political risks to such deals.

    The largest US transaction during this period was BreitBurn Energy Partners' proposed $285 million acquisition of certain oil and gas assets of Cabot Oil & Gas Corp. in the Evanston and Green River basins of Wyoming and certain acreage and non-operated oil and gas interests in Colorado and Utah. The deal was announced on July 27, has an effective date of Sept. 1, and is expected to close in early October.

    Houston-based Cabot said it plans to use the proceeds from the sale to increase its acreage position in liquids-rich areas of Texas and Oklahoma, as well as enhance its opportunity to drill additional wells in its Marcellus Shale holdings in Pennsylvania.

    More Oil & Gas Financial Journal Current Issue Articles
    More Oil & Gas Financial Journal Archives Issue Articles
    View Oil and Gas Articles on PennEnergy.com

    Related Articles

    Cabot updates on pipeline agreements

    02/21/2014 Cabot Oil & Gas Corp. reports the execution of a definitive gas sale and purchase agreement with a subsidiary of WGL Holdings and the execution of a binding precedent agreement with Transc...

    Cabot Oil & Gas provides operations update

    12/14/2013 Cabot Oil & Gas Corp. has reported results from the company's first 10-well pad in the Marcellus shale play. Additionally, the company has provided an update on its share repurchase program and...

    Industry Briefs

    11/12/2013

    Chaparral ramps up Panhandle Marmaton position with acquisition from Cabot

    10/17/2013

    Chaparral Energy Inc. has agreed to purchase net production of roughly 2,000 boe/d and 66,000 net acres in the Panhandle Marmaton Play for $160.1 million from Cabot Oil & Gas Corp.

    Baird expands energy research platform

    10/16/2013 Baird, an employee-owned, international financial services firm, has added senior analyst Daniel Katzenberg who expands the firm’s exploration & production (E&P) equity research coverage. S...

    More Oil & Gas Financial Articles

    Cabot updates on pipeline agreements

    Fri, Feb 21, 2014

    Cabot Oil & Gas Corp. reports the execution of a definitive gas sale and purchase agreement with a subsidiary of WGL Holdings and the execution of a binding precedent agreement with Transcontinental Gas Pipe Line Co. LLC for a new pipeline with committed takeaway capacity from Cabot's acreage position in Susquehanna County, Pennsylvania. 

    Cabot Oil & Gas provides operations update

    Sat, Dec 14, 2013

    Cabot Oil & Gas Corp. has reported results from the company's first 10-well pad in the Marcellus shale play. Additionally, the company has provided an update on its share repurchase program and announced the sale of legacy conventional Mid-Continent properties. 

    Industry Briefs

    Tue, Nov 12, 2013

    Chaparral ramps up Panhandle Marmaton position with acquisition from Cabot

    Thu, Oct 17, 2013

    Chaparral Energy Inc. has agreed to purchase net production of roughly 2,000 boe/d and 66,000 net acres in the Panhandle Marmaton Play for $160.1 million from Cabot Oil & Gas Corp.

    Baird expands energy research platform

    Wed, Oct 16, 2013

    Baird, an employee-owned, international financial services firm, has added senior analyst Daniel Katzenberg who expands the firm’s exploration & production (E&P) equity research coverage. Senior analyst Dan Leben has initiated research coverage on the oilfield services and equipment sector

    Most Popular

    Oil & Gas Jobs

    Search More Job Listings >>
    Subscribe to OGFJ