Centrica sells Canadian oil assets to Hong Kong-listed firm

Britain’s Centrica PLC has struck a deal to sell its entire Canadian oil and gas exploration and production business to Hong Kong-listed MIE Holdings Corp., in the latest example of Asian capital snapping up domestic energy assets.

MIE said it would pay about $722-million for mostly natural gas assets in Western Canada that currently pump the equivalent of 56,000 barrels of oil a day. The deal also includes two million net acres of land plus ownership in 11 major processing facilities.

MIE said it would partly fund the purchase through the sale of $204-million in convertible preferred shares to Can-China Global Resource Fund, a China-based private equity fund focused on natural resources in North America, and Mercuria Energy Netherlands, a unit of a Swiss-based commodity trading company.

The acquisition is the latest by MIE in Canada’s oil and gas industry. It also owns a 33.6-per-cent stake in Calgary oil producer Journey Energy Inc.

The deal follows a string of purchases by public and private Chinese firms, which have taken advantage of the downturn in oil prices to snap up distressed Canadian assets and companies. Last month, a Globe and Mail investigation found such entities have spent more than $2-billion in recent years.

MIE, which has offices in Hong Kong and Beijing and a market capitalization of $350-million, said the deal is subject to approval by its shareholders. It also requires clearance under Canada’s Competition Act and by Investment Canada.

Canadian Imperial Bank of Commerce acted as adviser for MIE. ‎The deal is expected to close in the summer.

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