• 2 days Shell Oil Trading Head Steps Down After 29 Years
  • 2 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 2 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 3 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 3 days Venezuela Officially In Default
  • 3 days Iran Prepares To Export LNG To Boost Trade Relations
  • 3 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 3 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 3 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 3 days Rosneft Announces Completion Of World’s Longest Well
  • 4 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 4 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 4 days Ecuador Seeks To Clear Schlumberger Debt By End-November
  • 4 days Santos Admits It Rejected $7.2B Takeover Bid
  • 4 days U.S. Senate Panel Votes To Open Alaskan Refuge To Drilling
  • 4 days Africa’s Richest Woman Fired From Sonangol
  • 4 days Oil And Gas M&A Deal Appetite Highest Since 2013
  • 5 days Russian Hackers Target British Energy Industry
  • 5 days Venezuela Signs $3.15B Debt Restructuring Deal With Russia
  • 5 days DOJ: Protestors Interfering With Pipeline Construction Will Be Prosecuted
  • 5 days Lower Oil Prices Benefit European Refiners
  • 5 days World’s Biggest Private Equity Firm Raises $1 Billion To Invest In Oil
  • 5 days Oil Prices Tank After API Reports Strong Build In Crude Inventories
  • 6 days Iraq Oil Revenue Not Enough For Sustainable Development
  • 6 days Sudan In Talks With Foreign Oil Firms To Boost Crude Production
  • 6 days Shell: Four Oil Platforms Shut In Gulf Of Mexico After Fire
  • 6 days OPEC To Recruit New Members To Fight Market Imbalance
  • 6 days Green Groups Want Norway’s Arctic Oil Drilling Licenses Canceled
  • 6 days Venezuelan Oil Output Drops To Lowest In 28 Years
  • 6 days Shale Production Rises By 80,000 BPD In Latest EIA Forecasts
  • 6 days GE Considers Selling Baker Hughes Assets
  • 6 days Eni To Address Barents Sea Regulatory Breaches By Dec 11
  • 7 days Saudi Aramco To Invest $300 Billion In Upstream Projects
  • 7 days Aramco To List Shares In Hong Kong ‘For Sure’
  • 7 days BP CEO Sees Venezuela As Oil’s Wildcard
  • 7 days Iran Denies Involvement In Bahrain Oil Pipeline Blast
  • 9 days The Oil Rig Drilling 10 Miles Under The Sea
  • 9 days Baghdad Agrees To Ship Kirkuk Oil To Iran
  • 9 days Another Group Joins Niger Delta Avengers’ Ceasefire Boycott
  • 10 days Italy Looks To Phase Out Coal-Fired Electricity By 2025

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