Fortune Oil (LON:FTO) announced this morning that it has agreed to inject its natural gas business into China Gas, for a total consideration of US$400 million. Fortune Oil's strategy has been to focus on operations in the oil and natural gas supply sector together with investments in infrastructure projects in the PRC to capitalise on the country's increasing demand for energy and resources. The Natural Gas Business includes a coal bed methane block in Shanxi Province, gas pipeline infrastructure covering 3 major municipalities of Beijing, Tianjin and Chongqing, as well as 7 provinces including Shanxi, Henan, Hebei, Shandong, Liaoning, Jilin and Hubei. The Natural Gas Business also has CNG (compressed natural gas) and LNG (liquefied natural gas) operations with downstream retailing to end-users through its city gas companies or CNG vehicle stations such as the largest CNG station in Beijing.
Tee Kiam Poon, Chief Executive of Fortune Oil said: "This transaction allows Fortune Oil to create one of the largest natural gas operators in China and together further develop the China natural gas business underpinning the Chinese government commitment to growing significantly China's natural gas consumption. We believe there are synergistic benefits from combining the two companies - enlarging the natural gas operations to 200 cities, connecting upstream, mid-stream and downstream businesses, expanding the business scope from city gas to LNG as a transportation fuel, and, most importantly, the stability of our management and employees is also key to ensure the future success of the combined natural gas businesses. After the completion of the transaction, Fortune Oil will continue to have access, through its shareholding in China Gas, into the fastest growing natural gas market in the world with an even larger platform and together we aim to accelerate China Gas's share of the China natural gas market. We are also very pleased that this transaction provides third party validation of the value within the Fortune Oil Group."
Fortune Oil are currently trading at 10.97 pence a share, up 20.39% on opening.
Magnolia Petroleum (LON:MAGP) announced this morning that the Roger Swartz #1 vertical well has been drilled to total depth of 5,180 feet, logged and casing has been set to a depth of 5,000 feet. Further perforations have been made in the Mississippi Lime and the Mississippi Chat and the AIM listed Company confirms that hydrocarbons have been encountered.
Broker FoxDavies said: 'Ultimately, further testing will be required before the well can be deemed anything more than a technical success, but as first steps go, this is a pretty good one.'
Magnolia Petroleum are currently trading at 3.83 pence a share, up 1.46% on opening.
Regal Petroleum (LON:RPT) shares have risen by 21.98% this morning and are currently trading at 36.90 pence a share.
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