They definitely know how to squeeze their JV partners,” Hanson said.įor many of the foreign companies, the investments are also designed bring technical knowledge on how to use the fracking technology in shale and other fields around the globe that are believe to hold huge energy reserves. “They got Total to pony up pretty good money. That price is well above the $7,000 to $9,000 completed recently in the neighboring Marcellus Shale, but below the peaks near $20,000 seen in Texas’ Eagle Ford field. That helped Chesapeake strike the Utica deal for nearly $15,000 per acre, analysts said, a high price for the field where only about a dozen wells have so far been drilled. ![]() benchmark natural gas prices slumping below $3 per million British thermal units, their lowest levels in more than two years, energy producers are focused on wells that contain high amounts of liquids such as propane, butane and ethane, whose price are linked to crude oil. The more exposure they get, the better,” said Mark Hanson, oil and gas analyst at Morningstar Inc.Ĭhesapeake had said in November it was close to a deal to bring in a partner to help it develop the Utica field in Ohio, where the company is ramping up drilling in fields it says are rich in liquids as well as natural gas. “It looks like the preferred transaction structure for a lot of these players, whether they are European or Asian, who are behind the curve on this technology. That has left many looking for deep-pocketed partners to form joint ventures to help pay for the expensive hydraulic fracturing technology that allows them to crack the brittle shale rocks and extract the natural gas and other products. Those deals sent the shares of Devon and Chesapeake higher and could be among the first in another busy year in the market for energy assets following the estimated $473 billion in transactions completed in 2011, according to Thomson Reuters data compiled through mid-December.Ĭhinese companies have been among the most aggressive, targeting assets around the globe, as well as in North America, where offshore oil company CNOOC Ltd 0883.HK formed a partnership with Canada's Nexen Inc NXY.TO and bought a $2 billion stake in oil sands property Opti Canada Ltd. That gives Sinopec a one-third interest in five fields, while Total's $2.3 billion deal with Chesapeake Energy CHK.N is its second joint shale venture with the U.S. shale with a $2.2 billion investment to create a joint venture with Devon Energy Corp DVN.N. Sinopec's Sinopec International Petroleum Exploration & Production Corp made its first foray into U.S. energy assets remained strong, with foreign oil and gas producers eager to invest in several of the mostly undeveloped fields that are believed to hold billions of cubic feet of natural gas and liquids. The ventures showed that the global appetite for U.S. energy sector on Tuesday, pouring $4.5 billion into deals to buy into booming production from shale rock formations. (Reuters) - China's Sinopec 600028.SS and France's Total SA TOTF.PA made major purchases in the U.S.
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