OIL in talks with Finley, Chesapeake to form JVs
Apr 10 2012 , New Delhi
Firm to spend Rs 6,000 cr on merger and acquisition opportunities
A high-level OIL team is on a visit to US beginning this Monday to discuss with managements of these companies for a possible collaboration.
Oil India director (exploration), BN Talukdar is heading the team, which also included S Rath, director (operations). The team had discussions with Finley Resources on Monday and Tuesday at Dallas. It is heading for Oklahoma City on Wednesday and Thursday to discuss opportunities with Chesapeake Energy.
Oil India board is of the opinion that jointly evaluating and pursuing acquisition opportunities with these US-based companies, will provide the state-run Indian explorer leverage in entering the US market. Chesapeake Energy and Finley Resources could offer their existing network and capability in evaluating the right kind of assets.
“Oil India has cash reserves of Rs 12,000 crore. It can spend about Rs 6,000 crore for merger and acquisition opportunities,” company’s director (finance) TK Ananth Kumar told Financial Chronicle. He did not divulge any details on Oil India’s discussion with the US companies. The explorer is scouting for discovered or producing assets overseas.
On February 14, Chesapeake Energy discussed divestment opportunity in the unconventional liquid with Oil India. The US-based firm’s chief executive officer, Aubrey K McClendon visited Oil India and presented joint venture options.
Chesapeake Energy has identified nearly 16,200 net drilling locations to develop 4.9 trillion cubic feet equivalents (tcfe) of proved reserves and about 50 tcfe of risked unproven resources. These are located in Anadarko, Eagle Ford Shale, Permian, Powder River and DJ Basin, Utica Shale, according to company web site. At the same time, chief executive officer of Finley Resources James D Finley offered Oil India a proposal to jointly purse exploration and production opportunities in the United States and outside.
Finley Resources operates nearly 900 oil and gas wells and has working interest in more than 2,500 non-operated hydrocarbon wells across nine states in the US.