Intro: "Showing that it isn't worried about the upswell of angst over hydraulic fracking technology, the Chinese government, through state-controlled Sinopec, today struck a deal with Devon Energy to buy into five prospective new exploration areas in the US."
The US hydro-fracking business has new overseas investors, 06/15/09. (photo: SierraActivist.org)
China Set to Frack America in Shale Deal
04 January 12
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howing that it isn't worried about the upswell of angst over hydraulic fracking technology, the Chinese government, through state-controlled Sinopec, today struck a deal with Devon Energy to buy into five prospective new exploration areas in the U.S.
The deal, which includes $900 million in cash upfront and a promise of $1.6 billion in the years ahead to cover drilling and development, gives the Chinese a 33% stake in five of Devon's fields, and a front row seat to what is effectively the second wave of development of U.S. shale assets. The areas in question include the Tuscaloosa in Louisiana, the Niobrara in Colorado, the Mississippian in Devon's home state of Oklahoma, the Utica in Ohio and the Michigan basin.
This isn't the first time a Chinese company has bitten off a piece of shale - Cnooc has partnered with Chesapeake Energy in the Eagle Ford and Niobrara in recent years - but it is the first onshore U.S. foray for Sinopec.
Foreigners have been hot for shale in recent months, with Chesapeake also today unveiling its Utica JV partner as Total. Last week SandRidge Energy, run by Chesapeake co-founder Tom Ward, sold a $1 billion worth of its acreage in the Mississippian to Spain's Repsol. A few months back Aussie mining giant BHP Billiton continued its shale gobble with the $15 billion pick-up of Petrohawk, following its earlier $5 billion buy of Chesapeake's Fayetteville shale acreage. India's Reliance Industries, though a JV with Atlas, controls some 350,000 acres in the Marcellus shale.
Sinopec's deal makes sense - it's buying promising acreage in the U.S. at a time when the price of natural gas is low ($3 per mcf) and the value of the dollar as a reserve currency is high.
(With $3 trillion in U.S. government debt set to be turned over in 2012 we'll need to attract a lot more foreign investment than this - but that's another story.)
So what does this deal do for Devon? Bob Brackett, analyst at Bernstein Research, was scratching his head over this today. In a note Brackett wondered why Devon was doing the deal at all. "Unlike companies like Chesapeake who need JVs to fund development activity, Devon isn't in dire need of the proceeds," considering its $5.6 billion in cash on the balance sheet. What's more, Brackett thinks Sinopec got the better end of the deal; he values the deal acreage at a fair value of $5,900 versus the implied deal value of $4,800 an acre.
More important, Brackett wonders when Devon will reveal what it has in mind for its cash. A big acquisition perhaps? Share buybacks? Or maybe just some really, really nice accoutrements for the giant new skyscraper headquarters it's building in downtown Oklahoma City.
Whatever Devon decides to do with its cash, the likely destination will be onshore. The company sold its deepwater and select international assets to BP for $7 billion in 2010. With new partner Sinopec. That move was the first big one that Chief Executive John Richels made upon taking the reins of the company from Larry Nichols (who founded Devon with his father four decades ago). But divestitures don't make a legacy, and Richels is surely seeking to make a lasting mark on Devon.
The market liked today's move, pushing Devon shares up 6.63% to $66.11.
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They want to put the big banks and big hedge funds and big insurance and big phrma and big agriculture in charge of everything we think, do, say, breathe, eat, drink, smell, hear, drive, sell, whatever.
Thank you to those patriots in that room who invited Nancy Pelosi the reactionary to reveal her true colors.
They want to put the big banks and big hedge funds and big insurance and big phrma and big agriculture in charge of everything we think, do, say, breathe, eat, drink, smell, hear, drive, sell, whatever.
Thank you to those patriots in that room who invited Nancy Pelosi the reactionary to reveal her true colors.
I also wold choose being on the edge of warrant and free speech rights over not trying to find the people who want to blow up innocents.
Me too, but since 2000. And I became a pariah among my liberal friends for NOT swallowing obonbya's campaign rhetoric. My friends, most of them wt least ware finally seeing what a terrible mistake they made in supporting the murderer.
She's no more leftist than Blair or Billy-Bob Clint' was.
So true. Please, everyone remember it was Pelosi who could have ended the Iraq invasion singlehandedly, but REFUSED TO DO SO!
This only proves once again that the people deserve the government they choose. They voted for Pelosi instead of Sheehan in 2008 and they got what they deserved, the same old BS.
You're absolutely correct, IF THE VOTES WERE NOT STACKED AGAINST SHEEHAN...
I live in Arizona and therefore could not have voted for Sheehan as much as I would have liked to, but the election was completely one-sided. Cindy Sheehan had no chance whatsoever of winning.
I would agree that Nancy Pelosi did her very best to keep Sheehan completely out of the public's eye as much as humanly possible, and Pelosi absolutely refused to debate her, but the voters in Pelosi's district clearly were stupid enough and naive enough in a reasonably honest election to vote Pelosi back into office for another term over Cindy Sheehan.
Therefore, as I have stated in my initial comment, they deserve what they are getting right now and since the 2008 elections.
At this point all she does is deliver essentially meaningless platitude-heavy speeches. Her vote to stop the War Party's madness is what I demand, not reassuring and comforting speeches.
If I were so inclined, I would assume the fetal position and suck my thumb any time I chose. I certainly don't need Pelosi's Pavlovian-bell prompts to do it for me...
Ahem, once proud? When was that? Was it when women could not vote? Was it before the voting rights act? The true mark of a conservative is to mythologize the once glorious past as the baseline from which modern departures can be gauged. Only problem is there is no glorious past. Empire is empire.
It has been challenged only once, actually rather benignly, by JFK and we have evidence as to how they reacted to that. All the poor guy was proposing to do was bring the CIA and JCS under control.
Prior to this, old Ike, a willing participant during his two terms in office, had toward the end, second thoughts of his own. To his credit, he gave us a modest warning in his farewell address to the nation.
Ever since, it's been a pretty much a scam. National "security" utilized as rubber stamp for all sorts of money making mischief. Aided by the CIA/MIA shadow government, supported by their corporate sponsors by way of a bought and paid for government.
The idea that we can produce some politician or group of them, who will change things is merely an extension of the con game. The Kucinichs, Feingolds even the Ron Pauls of the world, will be allowed voice only so long as they're no where near the seat of power.
A placebo, to keep the illusion of "representative " government in the forefront of public discourse while the real powers behind the throne, that is the MIC/CIA and their corporate sponsored friends, call the shots.
The GOP sold their soul in 1952.
The Dems mortgaged theirs in 1964 and finally sold it in 1992.
The politically interesting question is, will either one rediscover it?
If so, when?
In the good ol days we used to think Feinstein was the cat's Meow. Wonder who bought thwt woman?
http://news.yahoo.com/pelosis-defense-nsa-surveillance-draws-boos-183845402.html
When Mac Perkel was forcibly removed from the audience because he dared to ask Nancy Pelosi a question during her Netroots Nation presentation after she condemned Edward Snowden & supported Obama & the illegal NSA spying, some in the audience shouted leave him alone.
This was the Netroots Nation political conference. The article also states that some in the audience got up & walked out in support of Perkel. The total shame of it all was that not every person in that audience, down to a man, didn't get up & walk out in support of Perkel.
To add insult to injury, after the few walked out, most stayed & continued to listen to Pelosi's political BS. As the article states, Pelosi's remarks criticizing the Republican majority in the House & encouraging powerful women brought applause, cheers & laughs as if they actually believed she was being sincere after openly supporting the illegal NSA activities because Obama supported it.
The behavior of the majority of the audience being so forgiving of Pelosi & hanging around to listen to the rest of her BS after one of their so-called compatriots was forcibly removed as if this was a Republican conference just shows how badly fractured our side is & their support for the hired thugs who were there to forcibly kick people out if they wanted to speak up.
This goes against the whole idea of Netroots Nation.
Dumb person...he didn't violate the constitution like you did Ms. Pelosi!