Samsung Unit Buys Texas Oil Company (APO, NOR, APC)
Korea’s Samsung C&T, the engineering and construction unit of Samsung Group, will pay about $780 million for Parallel Petroleum, a Texas-based company owned by Apollo Global Management LLC (NYSE: APO). Apollo has owned the company since 2009, when it paid…
Korea’s Samsung C&T, the engineering and construction unit of Samsung Group, will pay about $780 million for Parallel Petroleum, a Texas-based company owned by Apollo Global Management LLC (NYSE: APO). Apollo has owned the company since 2009, when it paid $453 million to acquire it.
Parallel currently produces about 8,400 barrels/day from mature fields and its reserves total about 69 million barrels in west Texas, New Mexico, and in the Barnett shale gas play around Fort Worth.
Samsung C&T will own 90% of Parallel and the other 10% will be owned by Korea’s national oil company, known as KNOC. Samsung may allow other investors to buy into the company at a later date.
Apollo is selling Parallel in an effort to raise $1.5 billion for a new natural resources fund, according to Bloomberg Businessweek. Apollo already holds a controlling interest in Noranda Aluminum Holding Corp. (NYSE: NOR).
The sale is the largest takeover so far by a Korean firm, although KNOC paid $1.55 billion in March for a 24% interest in Eagle Ford assets owned by Anadarko Petroleum Co. (NYSE: APC).
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
