China National Offshore Oil Corporation (CNOOC) - parent company
) - is set to acquire an interest in Australia's Exoma Energy for a
cumulative amount of A$23.4 million (US$24.2 million). The deal
will enable CNOOC to raise its stake in various permits in central
Exoma stated that CNOOC is expected acquire a 13% interest with
purchase of over 62.1 million shares at A$0.173 each, in which case
the total consideration would add up to about A$10.7 million.
Subject to shareholder approval, CNOOC also holds an option to
raise its holding in the company up to 19.9% by purchasing
additional shares at the same purchase price. If CNOOC wishes to
increase its stake, it will have to put forward its proposal
stating the number of additional shares it wants to buy within five
days from the conclusion of the initial placement. Subsequently,
Exoma will issue these share on attaining shareholder's approval.
CNOOC also intends to increase its stake in several coalbed methane
and shale gas permits in Queensland's Galilee and Eromanga basins.
CNOOC already holds an interest of 50% in ATP's 991, 996, 999, 1005
and 1008 based on a farm-in agreement with Exoma signed back in
2010. Per the deal, CNOOC had agreed to finance exploration costs
for about A$50 million in the licenses.
CNOOC also proposes to exercise its right to gain a 50% interest in
ATPs 1127, 1130, 1137 and 1150 - awarded to Exoma in early 2012.
With a further payment of around A$12.7 million toward Exoma's
share of exploration and appraisal costs, CNOOC intends to boost
its stake by 10% in these nine licenses.
Both the subscription agreement and supplemental farm-in agreement
are subject to consent from the Chinese Government Authorities,
Australia's Foreign Investment Review Board and the Queensland
CNOOC Ltd., which recently inked a deal to purchase Canadian energy
), holds a Zacks #5 Rank (Short term Strong Sell rating). Longer
term, we maintain our Neutral recommendation.
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