By OGJ editors
HOUSTON, Feb. 23 -- Sunwing Energy Ltd. has acquired in exchange for stock in parent Ivanhoe Energy Inc. a 40% interest in the Kongnan development project in China's Dagang oil field from CITIC Resources, a subsidiary of CITIC Group (formerly China International Trust & Investment Corp.).
After closing of a transaction valued at $27 million, CITIC will hold 3.7% of Ivanhoe stock. Sunwing will own 100% of the working interest in the Kongang project.
Sunwing and CITIC formed an initial partnership in October 2002 to explore and develop oil, natural gas, coal, LNG, and gas-to-liquid projects in China. They formed a strategic alliance in 2003 (OGJ, May 19, 2003, p. 39).
Sunwing operates the Kongang project under a 30-year production sharing contract with China National Petroleum Corp. A total of 36 Kongang wells are producing 34º gravity sweet crude from six blocks covering 22,400 gross acres.
Ivanhoe said the transaction increases Sunwing's total production in China by 67% to more than 2,050 b/d gross, 1,681 b/d net.
