Chinese investment company to buy Texas oil fields for $1.3B

[Jonathan Fairfield]

Chinese investment company to buy Texas oil fields for $1.3B

BEIJING (AP) — A Chinese investment holding company said it has signed a letter of intent to purchase oil fields in Texas for 8.3 billion yuan ($1.3 billion) through a limited liability partnership.

In a disclosure to the Shanghai Stock Exchange, Yantai Xinchao Industry Co. Ltd. said the oil fields in Howard and Borden counties would be bought from Tall City Exploration and Plymouth Petroleum, two Nevada-based companies.

In the Saturday filing, Yantai Xinchao said it signed a letter of intent Friday with Ningbo Dingliang Huitong Equity Investment Center, a limited liability partnership, and its seven shareholders to buy the oil fields through a Ningbo Dingliang subsidiary, Moss Creek Resources LLC.

It said the transaction has been approved by the Committee on Foreign Investment in the United States.

-- (c) Associated Press 2015-10-25

[Chicog]

A fine step towards energy independence that.

[bartender100]

They will not be getting much oil for that price, be interesting to see what the reserves of those fields are

[Scott]

Off-topic posts and replies removed.

[bassman]

A fine step towards energy independence that.

Will have no impact on energy independence, it is illegal to export crude oil from the USA, regardless of who owns the field.

[ClutchClark]

A fine step towards energy independence that.

Will have no impact on energy independence, it is illegal to export crude oil from the USA, regardless of who owns the field.

It is not illegal to export crude oil from the US.

It used to be illegal to export NG from the US but that is changing.

[ClutchClark]

They will not be getting much oil for that price, be interesting to see what the reserves of those fields are

Huh?

$1.3 Billion buys a decent stakehold in the Permian Basin and these leases were most likely heavily discounted from the price Tall City paid for them back in 2012 when the price of crude and future forecasts were much higher than they are today.

Edited October 26, 2015 by ClutchClark

[Nowisee]

There will be more deals like this coming soon. They are smart to buy now.

[Assurancetourix]

China can pay in $ ; they have more US banknotes than USA

[boomerangutang]

If they were high-value fields, they wouldn't be for sale. It's not as though the Texans don't have the tech to get the stuff out of the ground. The buyers may be doing something like when Time-Warner bought AOL for a big ticket price.

[ClutchClark]

If they were high-value fields, they wouldn't be for sale. It's not as though the Texans don't have the tech to get the stuff out of the ground. The buyers may be doing something like when Time-Warner bought AOL for a big ticket price.

Things of high value come up for sale all the time.

Oftentimes, the reason a seller "sells" is because they are in over their head.

Right now with crude prices being low for 5 quarters and the forecast not looking for much improvement in 2016 then you see more of this "positioning" taking place. Eventually prices will increase again, its just a matter of who can afford to sit on an investment.

[Nowisee]

I missed the part where they mention them being high value.

It's not about getting it out of the ground, it's about pumping it out while crude is so low... not profitable and some of the smaller companies just can't take the pain anymore.

If they were high-value fields, they wouldn't be for sale. It's not as though the Texans don't have the tech to get the stuff out of the ground. The buyers may be doing something like when Time-Warner bought AOL for a big ticket price.

[Jai Dee]

Some off-topic comments about Donald Trump have been removed from this thread.

Please do not try to derail the discussion.

[bartender100]

They will not be getting much oil for that price, be interesting to see what the reserves of those fields are

Huh?

$1.3 Billion buys a decent stakehold in the Permian Basin and these leases were most likely heavily discounted from the price Tall City paid for them back in 2012 when the price of crude and future forecasts were much higher than they are today.

http://www.khabarindia.in/bpcl-eyes-10-in-kenya-oil-block/

Encouraged by depressed crude prices, state-owned oil retailer Bharat Petroleum Corporation (BPCL) is in talks with UK-based Tullow Oil to buy a 10% stake in its discovered oil block in the South Lokichar Basin in Kenya with an estimated one billion barrels of oil reserves, of which 600 million barrels may be recoverable.

At current oil prices, the resource potential is valued at $27 billion and BPCL may have to shell out about $2.7 billion, depending upon the recoverable resource potential of the block, said sources in the know.

When contacted, BPCL chairman S Vardarajan told TOI, “It’s very premature to talk on these. We are in talks with many firms with interests in Africa and other places.”

So here someone is paying $2.7 billion for approx 60 million barrels, so as I said, Chinese wont be getting much oil for $1.3

[elgordo38]

If they were high-value fields, they wouldn't be for sale. It's not as though the Texans don't have the tech to get the stuff out of the ground. The buyers may be doing something like when Time-Warner bought AOL for a big ticket price.

Things of high value come up for sale all the time.

Oftentimes, the reason a seller "sells" is because they are in over their head.

Right now with crude prices being low for 5 quarters and the forecast not looking for much improvement in 2016 then you see more of this "positioning" taking place. Eventually prices will increase again, its just a matter of who can afford to sit on an investment.

This will go part way in keeping the junk bond wolves away from the door. Another case of killing the golden goose that lays the golden egg. Everybody jumped on ye old ship fracking in their greedy rush for profits and sunk it. I understand the value of fracking junk bonds is in access or 850 billion dollars. There will be much more consolidation but once the cycle turns again everybody will jump back in again. The only winners of this fiasco for the present are the big SUV drivers who will also be caught in the trap yet again when pump prices go up and the whole sorry mess repeats itself. I can remember all the oil cycles in the past and history has taught us nothing. Greed pushes us over the debt cliff every time.

[Chicog]

A fine step towards energy independence that.

Will have no impact on energy independence, it is illegal to export crude oil from the USA, regardless of who owns the field.

But it's not illegal to export Petroleum products.

U.S. Was Net Oil-Product Exporter for First Time Since 1949

Barbara Powell

March 1, 2012 — 1:52 AM AST

[chuckd]

A fine step towards energy independence that.

Will have no impact on energy independence, it is illegal to export crude oil from the USA, regardless of who owns the field.

It is not illegal to export crude oil from the US.

It used to be illegal to export NG from the US but that is changing.

"It is not illegal to export crude oil from the US."

FYI:

---------------------------------------------------------------------

U.S. Mulls Lifting Oil Export Ban, but a Tough Sell on the Hill

BY KEITH JOHNSON

OCTOBER 2, 2015 - 1:43 PM

The U.S. Senate took another small step this week toward ending the 40-year ban on crude oil exports, but the whole notion of shipping oil overseas has become so politicized that it likely will die in a divided Congress.

The Senate Banking Committee passed legislation to end the ban, a limitation that was put in place in the mid-1970s after the trauma of the OPEC oil embargo led to long gas lines and soaring prices at the pump. Nominally, the measure earned bipartisan support, passing out of committee in a 13-9 vote. But that included all 12 Republicans on the committee and just one Democrat, the bill’s cosponsor, Sen. Heidi Heitkamp of North Dakota. What’s more, unrelated amendments tacked onto the bill would force Iran to use money it will earn from sanctions relief under the nuclear deal to compensate terrorism victims. Senate Democrats don’t want to scupper President Barack Obama’s Iran deal, so amendments like that all but doom the measure.

http://foreignpolicy.com/2015/10/02/u-s-mulls-lifting-oil-export-ban-but-a-tough-sell-on-the-hill/

[ClutchClark]

They will not be getting much oil for that price, be interesting to see what the reserves of those fields are

Huh?

$1.3 Billion buys a decent stakehold in the Permian Basin and these leases were most likely heavily discounted from the price Tall City paid for them back in 2012 when the price of crude and future forecasts were much higher than they are today.

http://www.khabarindia.in/bpcl-eyes-10-in-kenya-oil-block/

Encouraged by depressed crude prices, state-owned oil retailer Bharat Petroleum Corporation (BPCL) is in talks with UK-based Tullow Oil to buy a 10% stake in its discovered oil block in the South Lokichar Basin in Kenya with an estimated one billion barrels of oil reserves, of which 600 million barrels may be recoverable.

At current oil prices, the resource potential is valued at $27 billion and BPCL may have to shell out about $2.7 billion, depending upon the recoverable resource potential of the block, said sources in the know.

When contacted, BPCL chairman S Vardarajan told TOI, Its very premature to talk on these. We are in talks with many firms with interests in Africa and other places.

So here someone is paying $2.7 billion for approx 60 million barrels, so as I said, Chinese wont be getting much oil for $1.3

Africa vs West Texas ?

Apples and Oranges my friend.

[ClutchClark]

Thanks chuck. I should have been more specific:

http://www.wsj.com/articles/u-s-approves-limited-crude-oil-trade-to-mexico-1439570613

[ggt]

The Chinese are buying up companies who mine natural resources all around the globe...they have a plan and vision for the future...they are building a transcontinental high speed rail link from China to Spain...England...the ME...Africa and plan to eventually reach the US overland thru Alaska...

This train is already carrying goods from China to Germany...Shipping by boat takes 4 weeks...by rail 2 weeks...they are exporting twice as many goods as they are importing via this rail link...

They are not bickering about the environment...climate change...or anything that would stop their aggressive march to world economic and military dominance...

The world...except for a few countries with their head in the sand...sees what is happening and wants to be in on the action...Chinese money will soon be included in the IMF (International monetary fund) basket of currencies...giving them more prestige in making deals with other world powers...

So, when you see countries like Thailand aligning themselves with the Chinese...it is with their countries future wellbeing in mind...