Korea National to Buy Canadian Oil, Gas Fields From Hunt for $521 Million

Korea National Oil Corp. agreed to buy Canadian oil and gas assets from Dallas-based Hunt Oil Co. for C$525 million ($521 million) in the state-owned company’s second overseas acquisition this year.

Harvest Operations Corp., acquired by Korea National in October 2009, will purchase areas that produced about 11,720 barrels of oil equivalent a day in the third quarter, Harvest said in a statement yesterday. The fields hold 52.9 million barrels of proven and probable reserves.

The deal comes as Korea National completes its hostile 1.87 billion pounds ($2.95 billion) takeover of Scotland’s Dana Petroleum Plc. and is the latest in a series of South Korean investments in Canadian oil and gas. Chief Executive Officer Kang Young Won said Dec. 2 that after buying Dana the company will focus on acquiring oil blocks rather than companies.

“Korea National is switching to acquiring fields, which is cheaper than buying stakes in companies at a premium,” Cho Seung Yeon, a Seoul-based analyst at HMC Investment Securities Co., said by telephone today. “It has gained experience and skills in developing fields after recent acquisitions.”

The South Korean company probably paid Hunt $9.80 per barrel of oil equivalent, compared with $12 a barrel for Dana, Cho said.

Korea National, based south of Seoul in Gyeonggi, bought a 50 percent stake in Petro-Tech Peruana SA of Peru for $450 million in February last year and paid $3.9 billion for Calgary- based Harvest eight months later.

STX Energy Co., a South Korean fuel supplier and explorer, bought a natural gas field in August for C$152 million from EnCana Corp., Canada’s biggest natural gas producer. State-run Korea Gas Corp. bought 50 percent stakes in three Canadian gas fields in February.

To contact the reporter on this story: Shinhye Kang in Seoul at skang24@bloomberg.net.

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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