Brookfield Asset Management Inc. has sold one of its oil and gas holdings in Alberta to SanLing Energy Ltd., extending the slow trickle of Chinese funds to Canada’s oil and gas sector.
Brookfield Business Partners LP, a component of the international asset manager, announced that the sale of Insignia Energy Ltd. a month in a quarterly letter to shareholders.
The deal caused a little handicap for Brookfield, which said it chose to sell the business as opposed to commit additional capital required to maintain production. Neither the buyer nor the purchase price were revealed.
However, sources say the buyer was SanLing, among a handful of private Chinese firms which jointly have More than $3-billion into mostly distressed assets throughout the prolonged industry slump.
Personal Chinese suitors have largely replaced the larger state-run firms as a source of foreign funds in Canada’s oil and gas industry following multibillion-dollar investments by CNOOC Ltd. and PetroChina Co. Ltd. underperformed.
SanLing also bought assets from receivership from bankrupt Spyglass Resources Corp. and is thought to have purchased $200-million value of properties from companies controlled by Calgary’s wealthy Riddell family.
A representative with SanLing wasn’t immediately available for comment. A spokesperson for Brookfield pointed to the letter to shareholders but said the buyer wasn’t disclosed.
Brookfield obtained and then privatized Insignia in 2013. The business last created about 2,400 barrels of oil equivalent per day, primarily from operations in the Pouce Coup area of northwest Alberta, according to marketing materials.
Courtesy: The Globe And Mail