Geo-Jade eyes Shanghai Longzhou Xinke purchase https://www.chinadaily.com.cn/bizchina/2016-03/22/content_24009114.htm
Geo-Jade Petroleum Corp, a Chinese petroleum explorer, announced a plan on Sunday topurchase a Shanghai-based firm with overseas oil and gas assets worth 8.2 billion yuan($1.27 billion).
Geo-Jade is a Beijing-based oil and gas exploration and development enterprise with a totalacreage of nearly 30,000 square kilometers and an annual oil output more than 500,000metric tons.
The company has suspended trading on the stock market for half a year. It now plans to issue1.2 billion shares at 6.83 yuan per share to buy 99.99 percent of the shares of ShanghaiLongzhou Xinke through private replacement.
Geo-Jade plans to purchase Shanghai Longzhou Xinke Co Ltd, a power investment companyfor purchasing overseas assets, was founded in 2015. Longzhou Xinke currently has threetarget assets overseas, including Canada's Bankers Petroleum Ltd estimated at 2.98 billionyuan. Other overseas assets targeted by Longzhou Xinke are estimated at 4.6 to 4.9 billionyuan.
Bankers Petroleum is listed in Canada and Britain. Longzhou Xinke can only purchase itwhen it has been privatized.
Bankers Petroleum mainly operates three oilfields in AlbaniaPatos-Marinza, Kucova andBlock F. Patos-Marinza and Kucova are producing oil, while Block F is still being prospected.
Geo-Jade also plans to raise 7 billion yuan among its major shareholders for the constructionof Longzhou Xinke's targeted projects, replenishing the company's cash flow and the paymentfor intermediary agencies.
The company said that if the purchase is successful, it will boost the company's oil and gasreserves, speed up the capacity building and push its annual oil output up to 5 million tons.
"Oil prices have been falling in recent years, which has created opportunities for mergers andacquisitions in the industry," said Lin Boqiang, director of the China Center for EnergyEconomics Research at Xiamen University.