Why Did This Chinese Firm Just Expand its Foothold on Texas Oil?

Why Did This Chinese Firm Just Expand its Foothold on Texas Oil?
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Shandong Xinchao of China would be purchasing oil-producing acreage amounting to $420 million in the Texas Permian Basin’s Grenadier Energy. 

Houston’s Surge Energy announced the news on Sunday via PR Newswire.

Surge Energy US Holdings Company announced in the United States that through its subsidiary, the company signed a purchase and sale agreement acquiring leasehold interest and would produce wells from Grenadier Energy Partners II LLC (“GEP II”) located in Howard County, Texas. The aggregate price of the transaction is about $420 million. 

Some of the highlights in the acquired assets include the following:

An approximate of 9,000 Boepd (approximately 75% oil) average production

An approximate of 18,010 net leasehold acres



An approximate of 120 high-quality, economic future drilling locations operated inventory

The transaction is targeted to close by the late first quarter. The release shows that “Shandong Xinchao” wasn’t mentioned and only its wholly-owned subsidiary, Surge. 

In early 2015, Surge Energy America was created as a U.S. subsidiary of the China-based Shandong Xinchao Energy Corporation Limited. Shandong Xinchao is a publicly-traded company on the Shanghai Stock Exchange. It strategically planned to acquire and pursue a long-term sustainable oil and gas company in the United States. 

It purchased its first asset, Hoople Field, in early 2015. Surge Energy then began in May of the same year for taking over operatorship. With a massive 5,000 acre area, Hoople Field became a waterflood asset in Crosby County, Texas. 



Surge Energy has continued to grow in the Permian Basin since 2015. Before the pandemic, Surge was well-known and was one of the state’s top oil producers. The Grenadier deal would catapult Surge Energy, aka Shandong Xinchao, to an even higher position in the oil industry, having roughly 111,000 acres. 

As of December last year, Surge was already producing approximately 63,386 barrels a day, placing it on the 18th rank in production overall. The Grenadier deal’s added production might push it to as high as the 15th place. 

Pre-pandemic, China was recorded as the world’s largest oil importer, consuming about 13 barrels per day.

On the other hand, the United States was the world’s largest oil producer with 11 to 12 million barrels per day. Of the total production, Texas contributes 41 percent, according to the U.S. Energy Information Agency. 

Biden pledged not to ban fracking during the presidential campaign. However, the president now sings a different tune through his executive order of banning the process on federal lands by halting permitting and leasing. 

The ban would heavily impact states having large amounts of oil-producing federal land, including New Mexico. 





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Eric

Our country needs to keep the ccp from buying up our oil fields. How stupid are our leaders? Sell them oil, don’t sell them the oil fields.

GOD BLESS AMERICA!!!