Sinopec buys stake in US shale gas fields

China Petrochemical Corp (0386.HK), the country’s second largest oil company, has agreed to purchase one-third of US-based Devon Energy’s (DVN.NYSE) stake in five shale oil and gas fields in the US, Bloomberg reported. The Chinese company, also known as Sinopec, will pay US$900 million in cash upon closing of the deal and invest up to US$1.6 billion in Devon’s future drilling costs with an aim of funding 125 wells in the coming year, according to a statement from Devon. Shares of Devon rose 6.6% to US$66.11 at the close of the trading day in New York. Sinopec’s acquisition is partially aimed at acquiring proficiency in drilling techniques that it can later use at home, said Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets. “In these joint ventures, the partner does typically get some education on drilling …. Market expectations were at best US$3,000 an acre, so Devon did pretty well.”