MIE Holdings Sells Two China CBM Projects to China New Energy Mining Limited for $220 mn
Hong Kong listed MIE Holdings has decided to sell its two coal bed methane (CBM) assets in China for $220 million to China New Energy Mining Limited.
MIE will sell its subsidiary Asia Gas & Energy Ltd. which owns 51 percent equity in Sino Gas & Energy Ltd., which in turn has a 64.75 percent and 49 percent interest in the Linxing and Sanjiaobei production sharing contracts with China United Coal Bed Methane Corp. and China National Petroleum Corp., respectively.
The decision comes as global energy prices continue to remain low. In 2015, Asia Gas & Energy recorded a loss of RMB26.6 million ($4.1 mn).
“In view of the prolonged volatility of crude prices in the global commodities market, the disposal opportunity shall further enhance the financial strength and liquidity of the group,” the company said in a statement published Wednesday.
China New Energy Mining Limited is a private company incorporated under the laws of Hong Kong with a focus on the exploration, development and production of oil and gas fields.
The decision comes close after MIE decided last month to sell a 60 per cent stake in oil-producing assets in Kazakhstan to Malaysia-listed oil and gas investment firm Reach Energy for $154.9 million.
Meanwhile, Sino Gas & Energy Ltd. responded to the decision by saying it "is currently evaluating the particulars of the proposed transaction. However, based on information received to date, Sino Gas looks forward to welcoming our new potential joint venture partner. While Sino Gas holds pre-emption rights at the asset level, Sino Gas does not anticipate being able to exercise pre-emption rights at the Asia Gas & Energy Ltd holding company level."
Sino Gas believes this potential transaction provides significant third-party validation of the assets and recognition of value not reflected in the current share price. Sino Gas went on to say that it believes a joint venture partner with a stronger balance sheet will assist in maximising the value of the assets as it moves into a critical phase of delivery as it moves through the key regulatory approvals and enters full field development of the Linxing and Sanjiaobei PSCs.