• 1 hour U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 hours Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 5 hours Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 7 hours EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 9 hours Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 9 hours Aramco Says No Plans To Shelve IPO
  • 3 days Trump Passes Iran Nuclear Deal Back to Congress
  • 3 days Texas Shutters More Coal-Fired Plants
  • 3 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 3 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 3 days Chevron Quits Australian Deepwater Oil Exploration
  • 4 days Europe Braces For End Of Iran Nuclear Deal
  • 4 days Renewable Energy Startup Powering Native American Protest Camp
  • 4 days Husky Energy Set To Restart Pipeline
  • 4 days Russia, Morocco Sign String Of Energy And Military Deals
  • 4 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 4 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 4 days India Needs Help To Boost Oil Production
  • 4 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 4 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 4 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 4 days District Judge Rules Dakota Access Can Continue Operating
  • 5 days Surprise Oil Inventory Build Shocks Markets
  • 5 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
  • 5 days Syria’s Kurds Aim To Control Oil-Rich Areas
  • 5 days Chinese Teapots Create $5B JV To Compete With State Firms
  • 5 days Oil M&A Deals Set To Rise
  • 5 days South Sudan Tightens Oil Industry Security
  • 6 days Over 1 Million Bpd Remain Offline In Gulf Of Mexico
  • 6 days Turkmenistan To Spend $93-Billion On Oil And Gas Sector
  • 6 days Indian Hydrocarbon Projects Get $300 Billion Boost Over 10 Years
  • 6 days Record U.S. Crude Exports Squeeze North Sea Oil
  • 6 days Iraq Aims To Reopen Kirkuk-Turkey Oil Pipeline Bypassing Kurdistan
  • 6 days Supply Crunch To Lead To Oil Price Spike By 2020s, Expert Says
  • 6 days Saudi Arabia Ups November Oil Exports To 7-Million Bpd
  • 6 days Niger Delta State Looks To Break Free From Oil
  • 7 days Brazilian Conglomerate To Expand Into Renewables
  • 7 days Kurdish Independence Could Spark Civil War
  • 7 days Chevron, Total Waiting In The Wings As Shell Mulls Majnoon Exit
  • 7 days The Capital Of Coal Is Looking For Other Options
Alt Text

With A World Awash In Oil, Kazakhstan Faces Fuel Crisis

Kazakhstan is struggling with a…

Alt Text

Corbyn Seeks To Renationalize Britain’s Utilities

Jeremy Corbyn wants to renationalize…

These Private Equity Giants Are Selling Their Shale... To China

These Private Equity Giants Are Selling Their Shale... To China

Very interesting story unfolding this week in the U.S. energy sector; showing several twists emerging amongst the players in this space, old and new.

The Wall Street Journal broke the story Sunday that a new operator is breaking onto the scene in shale. Namely, billion-dollar Chinese property development company Yantai Xinchao.

According to filings, that firm has reached a deal to acquire a package of oil assets in west Texas. Few details were given on the properties -- but the price tag for purchase is significant, at around $1.3 billion. Related: Pain For Oilfield Services Will Continue Even If Oil Prices Rebound

The company did specify that this billion-dollar property package is located within Texas' Howard and Borden counties, an area that would put the assets within the shale oil hotbed of the Permian Basin.

The entrance of a Chinese player into this shale space, on this large scale, is a big development. But the story has another intriguing aspect -- the people vending the assets to Yantai Xinchao.

That's not one, but two major private equity players. One being ArcLight Capital Partners, and the other Denham Capital Management. Related: Stop Blaming OPEC For Low Prices

Both of these Boston firms are huge players in the energy investment space, with over $20 billion in funds between them dedicated to the exploration, production and midstream sectors.

And the fact they've chosen to exit the Permian is an interesting benchmark for the industry.

That's because the Permian is held up by analysts and oilmen alike as one of the most profitable plays in America right now. Raising the question: why would savvy investment groups like ArcLight and Denham sell a cash cow, at one of the most depressed times the market has seen in decades? Related: Banks Give A Stay Of Execution On Oil And Gas Sector

It's of course possible that Yantai Xinchao's $1.3 billion bid represents a sweet offer. With no details on the properties, we simply don't know if the Chinese owners are paying top dollar per barrel or not.

But whatever the case, this landmark deal shows at least one party (and possibly both) is very motivated -- China to get into shale, or America's private equity insiders to get out.

Here's to turning over the keys,

Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Lee James on October 31 2015 said:
    Maybe somebody's more interested in technology transfer, than high-cost U.S. unconventional petroleum supply??

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News