Cnooc Shares Up on Unconventional Natural Gas Deal |
| Wall Street Journal - Aug 6, 2012 |
Cnooc Ltd. (0883.HK) shares rose as much as 3.3% in Hong Kong on Monday, buoyed by news that the blue-chip offshore oil producer signed a deal Friday to develop coalbed methane in China over the next three decades, as part of efforts to expand into alternative energy sources in order to meet ambitious growth targets.
Cnooc said it will commit 9.93 billion yuan ($1.56 billion) toward the exploration of coalbed methane--a type of clean-energy source--in the initial five years.
Analysts said that even though the deal will have little immediate impact on Cnooc's earnings, it marks a longer-term effort by the company to shift its resource base to more unconventional supplies, after it agreed last month to buy Canadian oil producer Nexen Inc. for $15.1 billion.
On Monday, Cnooc's shares closed 2.1% up at HK$15.66, after jumping 3.3% to an intraday high of HK$15.84. In comparison the benchmark Hang Seng Index rose 1.69%.
"This is a more reasonable move, compared with the Nexen transaction, as it fits into Cnooc's strong competence in China," Bank of America Merrill Lynch analyst Thomas Wong said in a note. "We continue to view [2013] as a very difficult year for Cnooc, with slow production growth and integration issues with Nexen."
Read Full Article from Wall Street Journal
- Posted: 2012-08-06 11:37:52
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