China National Offshore Oil Corporation (CNOOC) - parent company
) - has received the approval of Australia's Foreign Investment
Review Board (FIRB) 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 onshore
permits in central Queensland.
CNOOC will acquire a 13% interest by purchasing over 62.1 million
shares of Exoma at the rate of A$0.172 per share, amounting to a
total consideration of about A$10.7 million.
Following shareholder approval, CNOOC can also choose to raise its
stake in the company 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 shares after receiving shareholder approval.
CNOOC has also decided to increase its current 50% stake in a
number of coalbed methane and shale gas permits in Queensland's
Galilee and Eromanga basins to 60%.
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 in 2010.
Per the deal, CNOOC had agreed to finance exploration costs of
about A$50 million.
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 and
the Queensland government.
CNOOC Ltd., which recently inked a deal to purchase Canadian energy
), holds a Zacks #3 Rank (Short term Hold rating). Longer term, we
maintain our Neutral recommendation.
CNOOC LTD ADR (CEO): Free Stock Analysis Report
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