Yanchang Petroleum Group to continue buying spree
The Globe and Mail reports in its Thursday, Sept. 5, edition that Yanchang Petroleum Group is in a friendly $320-million (Canadian) deal to take over Novus Energy ($1.075). The Globe's Jeffrey Jones writes the deal is the first Canadian energy acquisition by a state-owned Chinese company since last year when CNOOC bid $15.1-billion (U.S.) for Nexen. Novus chief executive officer Hugh Ross says the takeover is just the start of a Canadian buying spree for Yanchang's international division. He says Yanchang is starting small and is keeping Novus management in place. Mr. Ross says, "We're going to aggressively grow Novus through a series of acquisitions and through aggressive drilling programs." He says Yanchang was not put off by tightened scrutiny on takeovers by state-owned enterprises that followed the Nexen deal. For Yanchang, the Novus deal is its entry to Canada. The Globe says given the deal's size it is more of a ripple than a splash. Raymond James analyst Luc Mageau says the move is clearly a beachhead from which to expand. Novus's main assets are in a region of Saskatchewan known as Dodsland, where it produces oil using horizontal drilling and hydraulic fracturing methods.
Might be great timing for Blackbird to start proving up reserves on their Saskatchewan properties!