South Korean energy giant SK Innovation has signed an agreement to acquire a US oil and gas explorer to expand its overseas business, the company said Wednesday.
The contract to acquire a 100 percent stake in Longfellow Nemaha will be delivered by its US subsidiary, SK E&P America, in the second quarter.
Longfellow is a private oil and gas exploration and production company with assets located in Oklahoma, the company said in a statement.
SK Innovation’s shale site in Oklahoma (SK Innovation)
The announcement came a day after SK Innovation said it plans to invest 485.3 billion won ($453.1 million) in its US subsidiary. The investment appears to be going largely toward acquiring Longfellow. The sale price of Longfellow has not been disclosed, but SK is likely to spend around 300 billion won, according to industry insiders.
Longfellow has two shale gas exploration sites located in Oklahoma. The sites are 40 kilometers from SK’s existing shale sites in Grand and Garfield counties in the state.
The transaction will represent a significant expansion of SK’s core focus area in the US midcontinent region, the company said.
“SK initially invested in the growing US oil and gas upstream market in 2014, and through this platform we continue to build a balanced portfolio of conventional and unconventional assets,” said Kim Tae-won, president of SK E&P America.
“This transaction leverages our operational expertise in the region and represents a significant step towards realizing SK’s vision of being a top-tier operator in the US Lower 48 and beyond.”
By Cho Chung-un (email@example.com