2010-11-03-2010-10-22

To buy assets offshore Ghana, including a stake in the 1.8BBO Jubilee Field.

China's state-owned oil firm CNOOC Ltd. (NYSE: CEO) and Ghana National Petroleum Corp., or GNPC, have reportedly made a $5-billion bid to buy certain assets in Ghana from privately held Dallas-based E&P company Kosmos Energy LLC, including a prized stake in the 1.8-billion-barrel Jubilee Field, according to a report by Bloomberg.

The bid is reported to be all cash and fully financed, and was said to have been received two weeks ago from the bidders, according to undisclosed sources. The deal trumps a terminated bid of roughly $4 billion for the Jubilee asset from global supermajor Exxon Mobil Corp., Irving, Texas, (NYSE: XOM) which fell through in August due to opposition from Ghana, sources say.

In a public statement following its nixed deal with ExxonMobil, Kosmos cited that it was well-positioned financially and operationally to continue operating its West African assets in the meantime.

First production from Jubilee's first phase is slated for late fourth-quarter 2010.

In conjunction with new bid, GNPC is said to have entered preliminary talks with Norwegian oil major Statoil ASA (NYSE: STO) to participate in the venture alongside the two companies, Bloomberg adds.

The deal also follows a major land grab in South Texas from CNOOC in early October. In its first U.S. upstream acquisition, the Chinese firm purchased a 33.3% undivided interest in 600,000 acres in the Eagle Ford play from Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) for $2.16 billion in cash and drilling carries.

In September, various media outlets reported that Kosmos was considering an initial public offering that would value that company at a hefty $5 billion. Bloomberg noted that Kosmos was working with Citigroup and Credit Suisse on the IPO plans. The company is financially backed by international private-equity investors Warburg Pincus and Blackstone Capital Partners.

Considering the impact of the deal on Anadarko Petroleum Corp. (NYSE: APC) Kosmos' partner in Jubilee, David Tameron, senior analyst at Wells Fargo LLC says in an Oct. 22 industry brief that the implications for the Houston-based E&P company are "meaningful."

"A successful purchase of the stake in this world-class oil field would provide a benchmark by which Anadarko's stake can be valued," Tameron says. Wells Fargo currently has $4.4 billion in its NAV for Anadarko's assets in West Africa, according to the analyst. "The $5 billion would provide some upside, but more importantly, it would put a hard value on the asset," he adds.

Kosmos Energy is the operator of the West Cape Three Points block, in which it holds a 30.875% interest. The company also holds an 18% interest in the Deepwater Tano block. According to Kosmos executive vice president and chief financial officer W. Greg Dunlevy, Kosmos has raised nearly $2.3 billion to develop Africa-focused E&P since 2003, when the company was founded.