CNOOC Ltd. to acquire Nexen Inc. for $15.1 billion

By OGJ editors

CNOOC Ltd. will acquire Nexen Inc., Calgary, for $15.1 billion as China expands its holdings in worldwide exploration and production operations.

CNOOC said the definitive agreement represents a 61% premium to Nexen’s common share closing price on July 20, 2012. It said the deal “provides significant long-term benefits to Canada” and has the unanimous approval of the boards of both companies. Shareholder approval will be sought on Sept. 21.

Nexen averaged production of 207,000 b/d of oil equivalent after royalties in the quarter ended June 30 and had 900 million boe of proved reserves and 1.122 billion boe of probable reserves at end of 2011. It also had best estimate contingent resources of 5.6 billion boe, mainly in Canadian oil sands.

CNOOC noted that Nexen’s assets, which will expands its own global offshore footprint, are mainly in  Western Canada, the UK North Sea, the Gulf of Mexico, and offshore Nigeria. Nexen is focused on conventional oil and gas, oil sands, and shale gas.

Nexen management’s current mandate will be expanded to include all of CNOOC’s North American and Caribbean assets.

CNOOC had net production of 909,000 boe/d at the end of 2011 and net proved reserves of 3.19 billion boe.

CNOOC said the transaction establishes Calgary as its North and Central American headquarters that will manage Nexen’s global operations and CNOOC’s $8 billion of existing operations in the region.

Nexen’s management and employees will be retained and its capital spending will be enhanced, CNOOC said. Nexen’s $4.3 billion in current debt will remain outstanding.

CNOOC noted that it has been a large investor in Canada since 2005, having spent $2.8 billion (Can.). The investments include stakes in MEG Energy Inc., OPTI Canada Inc., and a 60% interest in Northern Cross (Yukon) Ltd. OPTI Canada is Nexen’s partner in the Long Lake steam assisted gravity drainage production facilities.

Nexen’s assets in the UK, US, and other countries will continue to be managed from its regional offices, and CNOOC will retain the current management and employees in those operations as well as continue to work with local suppliers.

CNOOC said it is committed to Nexen’s assets in the UK and will maintain its operations in the US Gulf of Mexico and offshore Nigeria.

Related Articles

OMV acquires West of Shetland licenses from Hess

03/21/2014 OMV AG has reached an agreement with Hess Corp. to acquire four licenses in West of Shetland, UK, including Cambo field and the Blackrock prospect,...

Millennium Pipeline appoints president

03/20/2014 Millennium Pipeline Co. LLC has selected Joseph Shields as its president. He succeeds Rocco D’Alessandro, who held the position beginning in May 20...

ONGC Videsh names exploration director

03/19/2014 ONGC Videsh Ltd. (OVL), the overseas arm of Oil & Natural Gas Corp. Ltd., has named Anil Bhandari as exploration director. In his role, Bhandar...

Vermilion to buy southeast Saskatchewan assets

03/18/2014 Vermilion Energy Inc., Calgary, has signed an agreement with a private southeast Saskatchewan producer to acquire light oil producing assets in the...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected