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CNOOC

Article Index

Gordon Gekko Was Wrong: Sometimes the Pig Gets Eaten

By , Executive Editor, Money Morning • @privatebrief -

As longtime readers know, I have a real affinity for old investing adages - in large part because of the very real lessons the best ones convey.

And one of my favorites tells us that "Bulls make money, bears make money - and pigs get slaughtered."

With apologies to Gordon Gekko, while greed may be good, excessive greed can be hazardous to your health - and to your portfolio.

And a news item I spotted last week drove that point home.

Last Monday, the trade journal Canadian Business reported that Canada has issued a "thumbs-down" verdict on a deal that calls for Malaysian state-run energy giant Petronas to pay $6 billion for Progress Energy Resources Corp. (PINK: PRQNF), a natural-gas producer that's based in Calgary.

Canadian Industry Minister Christian Paradis said Ottawa nixed the deal because the administration of Prime Minister Stephen Harper was "not satisfied that the proposed settlement is likely to be of net benefit to Canada," Canadian Business said.

Needless to say, the free-market crowd is using the Harper Administration for target practice - alleging the rejection will have a chilling effect on all foreign investment north of the border.

Greed is Not Always Good

Of course, that's a political concern. My focus today is on the investing fallout ... and the lesson we can learn from it.

As a result of the decision, the value of other resource companies - especially ones investors thought might serve as decent takeover candidates (at a nice premium) - have also been hit.

Investors are also worried the decision also puts at risk the proposal by China's CNOOC Ltd. (NYSE ADR: CEO) to buy Canadian oil-sands player Nexen Inc. (NYSE: NXY).

And that brings me back to my "pigs get slaughtered" point.

You see, Permanent Wealth Investor Editor Martin Hutchinson twice recommended Nexen shares to Private Briefing subscribers - first in early September 2011 and then again in early July of this year ... just two weeks before CNOOC offered to buy Nexen for $15.1 billion, or $27.50 a share.

Afterwards, the stock jumped to $26 - 33% and 54% above where he'd recommended it to you, but a full 6% below the "offer" price of $27.50.

When the Nexen deal was announced, a lot of folks asked us whether they should cash out and take their winnings, or hold out for that last 6% - which, admittedly, is a significant amount of money in today's zero-interest-rate world.

Martin didn't hesitate. In fact, he gave readers the same advice he gave his own subscribers (who, by the way, pocketed 68% on the deal).

To continue reading, please click here...

CNOOC Creates Biggest China-U.S. Oil Deal For Stake in Shale Gas Industry

By , Associate Editor, Money Morning -

China's state-owned energy company China National Offshore Oil Corp. (CNOOC) (NYSE ADR: CEO) late Sunday announced it would invest $2.16 billion in U.S.-based Chesapeake Energy Corp. (NYSE:CHK) to increase China's stake in unconventional gas resources like shale gas. It is the largest ever China-U.S. oil and gas deal.

CNOOC initially will pay $1.08 billion for a 33% stake in Chesapeake's Eagle Ford shale acreage in Southern Texas. China's third-largest oil company will invest an additional $1.08 billion by paying 75% of Chesapeake's drilling and completion costs in coming years, allowing Chesapeake to tap hard-to-extract shale gas deposits and boosting its weak balance sheet.

The deal highlights China's need to develop its shale-gas extraction techniques. The country has 26 trillion cubic meters of shale gas reserves that are largely unexplored due to a lack of drilling ability - and Chesapeake is a pioneer in the shale gas industry.

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China's CNOOC Will Ramp Up Deepwater Oil Drilling as BP's Oil Spill Kills U.S. Exploration

By , Associate Editor, Money Morning -

China's CNOOC. Ltd. (NYSE ADR: CEO) will step up its long-term deepwater oil exploration plans with a close eye on safety measures in the wake of the BP PLC (NYSE ADR: BP) Gulf oil spill that has halted U.S. deepwater drilling. The state-controlled oil company has exclusive rights to develop China's offshore resources and has […]

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High Oil Prices: Four Ways to Profit From the Looming Zoom

By , Executive Editor, Money Morning • @privatebrief -

Let's face it: Over the long haul, oil prices are headed higher -probably much higher. For U.S. consumers, high oil prices will represent a major challenge. For investors, however, those same high oil prices could stand as the profit opportunity of a lifetime. Read this report from Money Morning Executive Editor William Patalon III, and find out how high oil prices could shoot your portfolio to new highs.

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The Scramble for Africa: Profiting From World's Largest Cache of Commodities

By , Managing Editor, Money Morning -

In the quarter century stretching from the late-1880s to the First World War, there was a mad rush by the world's leading powers to occupy and annex African territory. Now, 100 years later, the world's elite again are scrambling to make their respective marks on the continent.

The methods of extraction have changed, but the end goal remains the same - to gain access to Africa's coveted bounty of commodities.

Most notably, Chinese interests have swarmed Africa, constructing roads, rail lines, municipal buildings, schools, ports, and pipelines in exchange for access to natural resources.

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