China Investment Corp and GDF Suez announced this week that they were entering into a major cooperation framework, which will aid GDF SUEZ in its planned expansion into Asia, in what GDF foresees as being a key growth market. To kick the partnership off, CIC will take a 30% stake in the upstream division of GDF for $3.3 billion and a 10% in the Atlantic LNG project in Trinidad & Tobago for $850 million. The deal represents the largest by a Chinese state controlled company since Petrochina’s failed attempt to take a 50% interest in Encana’s Cutbank Ridge shale gas 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 that 5.5 also pointed more towards a deal that seeks long term cooperation rather than a Chinese asset grab.
In Namibia, Chariot Oil announced the long anticipated results of their farm-out tender for certain blocks in their offshore portfolio of assets. One deal involved Norwegian oil service company, Petroleum Geo Services ASA taking a 10% stake in two blocks in exchange for funding 50% of the forthcoming seismic programme. More importantly however was the deal that saw BP take a 25% interest in Block 2714A containing the Nimrod “mega structure” which Chariot believes could potentially hold 4.9 billion barrels of oil. For Chariot Oil the farm out allies BP with existing farm in partner Petrobras, in what the company will see as the ideal operating team to progress the Nimrod block forward. Despite its Manaconda oil spill in the Gulf of Mexico BP is still a much respected deep water operator, whilst Petrobras brings a vast amount of experience within the geologically similar pre-salt assets offshore Brazil.
Two diverse shale operators merged this week with Zaza Energy combining its Eagle Ford portfolio of assets with Toreador’s shale oil assets in the Paris Basin of France. The deal will come as a relief to many Toreador shareholders after a dramatic share price fall during 2011. At the start of the year, buoyed by the French laissez-faire attitude towards shale drilling, the market cap of Toreador stood at over $400 million. However following a ban on the practise of hydraulic fracturing in the country due to environmental concerns, the market cap plunged to stand at just $73 million at the time of the deal announcement. The terms of the merger means that Toreador shareholders will gain a 25% interest in 83,000 acres in the Eagle Ford play, which with recent valuations in the play in excess of $10,000 is debatably worth far more than the market cap of Toreador. The share price of Toreador responded to the deal with a 16% rise on the day of announcement.
In Denmark, Hess Corp increased their stake in the South Arne oil field from 57.5% to 64.4% through the acquisition of Noreco’s 6.56% stake for $200 million. Noreco stated the need to improve financial flexibility as the reason for the sale. Whilst in the midst of number of existing investment projects and with a current debt-to-equity of Noreco standing in excess of 100%, the sale will improve the risk profile of the company. The deal announcement coincided with a welcome day on the equity markets involving no major fear induced sell-offs and the shares of Noreco responded with a rise of 20%.
|Acquirer||Target Company||Target Business Segment||Brief Description||Total Acquisition Cost ($000)|
|China Investment Corporation||GDF SUEZ E&P||E&P||China Investment Corp acquires a 30% interest in GDF SUEZ’s E&P division||3,285,403|
|China Investment Corporation||GDF SUEZ||Midstream||China Investment Corp acquires a 10% interest in train 1 of the LNG Atlantic liquefaction plant in Trinidad and Tobago as well as production payments associated with trains 2, 3 and 4 from GDF Suez||857,062|
|Hess Corp||Noreco ASA||E&P||Hess Corp acquires Noreco’s 6.56% interest in the South Arne oil field offshore Denmark||200,000|
|ZaZa Energy, LLC||Toreador Resources Corporation||E&P||ZaZa Energy LLC and Toreador Resources merges to form ZaZa Energy Corp, combining ZaZa’s Eagle Ford shale assets and Toreador’s Paris Basin shale assets||100,851|
|Risco Energy Pte Ltd||Vitol Group||E&P||Risco Energy acquires a 26.84% interest in the Galoc oil field offshore the Philippines||35,296|
|Allied Petroleum Exploration Inc.||Government body||E&P||Allied Petroleum enters PSC for block 36 in Oman covering 18,000 sq km, Allied Petroleum is committed to spending around $18 million in the two phases of a six-year-long work programme that includes the acquisition of new seismic, reprocessing of old seismic and the drilling of exploratory wells.||18,655|
|Otto Energy Ltd||Vitol Group||E&P||Otto Energy acquires a 14.22% interest in the Galoc oil field offshore the Philippines||18,700|
|Base Oil and Gas Ltd||Unspecified||E&P||Base Oil and Gas Ltd acquires oil and gas producing properties located in East Central Alberta||8,084|
|Victoria Oil & Gas||Cameroon Holdings Limited||E&P||Victoria Oil & Gas acquires a one third interest in a 6.8% royalty interest in the Logbaba gas and gas condensate project in Cameroon via the purchase of one third of the shares in Cameroon Holdings Limited||3,500|
|ADX Energy Ltd||Carnavale Resources Limited||E&P||ADX Energy Ltd acquires a 20% interest in the Kerkouane Permit offshore Tunisia from Carnavale Resources Limited||1,724|
|Tap Oil Limited||Challenger Minerals Inc.||E&P||Tap Oil Limited increases its stake in the offshore Ghanain Accra contract area from 40% to 45%||1,500|
|BP||Chariot Oil & Gas||E&P||BP farms into a 25% interest in Block 2714A offshore Namibia from Chariot Oil and Gas Limited||-|
|Petroleum Geo Services ASA||Chariot Oil & Gas||E&P||Petroleum Geo Services ASA farms into a 10% interest in Blocks 2312 A & B and Northern halves of 2412 A & B offshore Namibia from Chariot Oil and Gas Limited||-|