Yanchang Petroleum International Ltd. agreed to buy Novus Energy Inc. for C$232 million ($220 million) cash, in China’s biggest purchase of a Canadian oil and gas company since Cnooc Ltd.’s takeover of Nexen Inc.
Yanchang will pay C$1.18 a share for Novus Energy, 42 percent more than its closing price yesterday, the Alberta-based company said in a statement. Yanchang said it will help fund the purchase by selling HK$1.6 billion ($206 million) in convertible bonds to its parent Shannxi Yanchang Petroleum Group Co., China’s fourth-largest producer.
Buying Novus will give Yanchang assets in Western Canada that produced 3,452 barrels of oil equivalent a day in the three months ended June 30, 20 percent more than a year earlier, according to Novus’s quarterly report. The Canadian company also has expertise in horizontal drilling and hydraulic fracturing, according to its website.
Novus had said on Aug. 23 that it was in exclusive talks on a potential transaction after completing a strategic review.
Cnooc, China’s biggest offshore oil and natural gas producer, completed the $15.1 billion takeover of Nexen Inc. in March.