China now owns some prime real estate in Northeastern B.C.’s shale gas fields and a stake in the nascent LNG sector, with the acquisition of Nexen Inc. (TSX:NXY) by China National Offshore Oil Corp. (CNOOC).
The $15 billion acquisition by the state-owned oil and gas company was finalized Monday. It happened to coincide with this week’s two-day LNG conference hosted by the B.C. government, and is just one more sign of the opportunities global players in the oil and gas industry see in B.C.
Premier Christy Clark said Monday that $7 billion has already been invested in B.C. by companies hoping to develop LNG plants and infrastructure.
Based in Alberta, Nexen and its partners own 300,000 acres in the Horn River and Cordova basins of Northeastern B.C.
“The company is delighted to acquire a leading international platform through the acquisition of Nexen,” CNOOC chairman Wang Yilin said. “We strongly believe that this acquisition is a good strategic fit for us and will create long-term value for our shareholders.”
In 2011, Nexen entered into a joint-venture agreement with a consortium led by Japan’s INPEX Corp. of Japan, which gave the consortium a 40% interest in Nexen’s shale gas holdings in B.C.
“Nexen believes liquefied natural gas export could be an attractive option for maximizing the value of our shale gas business,” the company states on its website.
Under the sale agreement, holders of Nexen common shares will receive cash worth US$27.50 per share, without interest, and holders of Nexen preferred shares will receive $26. Kevin Reinhart will stay on as CEO of Nexen.
Nexen’s shares were trading at $28.19 at close of markets Tuesday.
