The Group signed the Share Purchase Agreement (“SPA”) with Anadarko on 11 February 2014 and achieved financial closure of this acquisition with a net consideration of US$1.046 billion on 8 August 2014. Pursuant to it, the Group acquired 40.09% interest in Contract Area 04/36 and 29.18% interest in Unit Area 05/36, thereby getting access to net 2P oil reserves totaling 42 million boe. The value of the project is estimated to reach US$1.348 billion.
The completion of the transaction showcases the Group's execution capability and financial strength to acquire and operate large-scale projects. Moreover, this acquisition enables the Group to tap into offshore oil producing blocks and forge a stable cooperative relationship with China National Offshore Oil Corporation and other international oil companies.
The Caofeidian Project, located in China's Bohai Bay, consists of two conventional oilfield blocks. They are low-risk, mature producing offshore oilfields with more than a decade of continuing exploration and production.
The project maintained normal and stable operation after the completion of acquisition. Its current daily production reaches 35,000 barrels. It has generated stable sales revenue and net cash inflow since September 2014.
A new Overall Development Adjustment Plan (ODAP) is being finalized for the project. The planned peak production rate under this new ODP could reach 50,000 barrels of oil per day, thereby generating stable cash inflow and investment returns to the Group.
The Group will leverage this investment and take advantage of the opening-up of oil industry in China to explore opportunities for investment in other offshore oilfield blocks. Such move facilitates the Group’s strategic transformation towards an oil enterprise focusing on upstream oil and gas exploration, development and production. Moreover, it will reinforce the technical and management capability in the Group’s upstream oil and gas business.