BEIJING--China's Cnooc Ltd. (0883.HK) said Monday it has reached an
agreement to acquire oil and gas producer Nexen Inc. (NXY) for $15.1
billion, in what will be China's biggest overseas energy acquisition
to-date.
Cnooc will pay $27.50 per share for Nexen, representing a 61% premium
to their closing price on Friday on the New York Stock Exchange.
State-owned Cnooc is China's largest offshore oil company by
production. The deal will give it ownership of oil and gas reserves in
western Canada, the U.K. North Sea, the Gulf of Mexico and offshore
Nigeria.
"The acquisition reflects our strong belief in Nexen's rich and
diverse portfolio of assets and world-class management and employees.
This is an exciting opportunity for us to build on our existing joint
venture relationship with Nexen in Canada, and to acquire a leading
international platform in the process," Cnooc chairman Wanh Yilin said
in a statement to the Hong Kong Exchange.
Nexen Chairman Barry Jackson said the company's board of director was
unanimous in recommending that shareholders to approve the
transaction.
Cnooc had previously tried to make a major investment in North
America, but in 2005 its $18.5 billion bid for California-based Unocal
Corp. failed after a storm of protest in Washington.
In 2012, approximately 70% of Nexen's output is expected to come from
offshore fields, according to Nexen's website, making it a good fit
for the Chinese company's offshore fields. In 2011, Nexen produced
around 207,000 barrels a day of oil equivalent.
Nexen, which describes itself as a major player in Canada's oil-sands
sector, is also a producer of shale gas in northeastern British
Columbia.
Cnooc said it will fund the deal through existing cash resources and
external financing. Nexen's current debt of around $4.3 billion will
remain outstanding.
If the deal is approved by Nexen shareholders, Nexen will become a
wholly owned subsidiary of Cnooc, the statement said.
The planned purchase comes almost a year to the day after Cnooc
announced the acquisition for $2.1 billion of Canadian oil sands
producer OPTI Canada Inc. (OPCDF), on July 20, 2011. In so doing, it
became a partner with Nexen in the Long Lake oil-sands project in
Alberta, Canada. Cnooc deepened its relationship with Nexen in
December 2011, when the two agreed a joint venture deal which gave
Cnooc stakes in six deepwater Gulf of Mexico operated by Nexen.
Chinese companies have invested heavily in Canada, and particularly
its resources sector, pumping in at least $12.8 billion into companies
and projects since 2009, according to Dealogic.
Cnooc said it planned to establish Calgary as the head office of its
North and central American operations and list its common shares on
the Toronto stock exchange.
Write to Simon Hall at simon.hall@dowjones.com
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(END) Dow Jones Newswires
July 23, 2012 06:45 ET (10:45 GMT)
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