Sinopec Eyes Another Large Canadian Purchase

To acquire company with more than 324,000 net acres of assets in Deep Basin of AB and NE BC, gaining 37,000 BOE/d, 174.2 MMBOE 2P.

Sinopec International Petroleum Exploration and Production Corp., a subsidiary of China Petrochemical Corp. (Sinopec), Beijing, (NYSE: SNP) plans to acquire Daylight Energy Ltd., Calgary, (Toronto: DAY) for approximately C$2.2 billion in cash.

Sinopec will pay C$10.08 per Daylight share.

Daylight has more than 324,000 net acres of oil and gas assets in the Deep Basin of Alberta and northeastern British Columbia. The assets are primarily in the Pembina, Elmworth and West Central. Production as of June 30 was approximately 37,000 barrels of oil equivalent per day. Proved and probable reserves as of year-end 2010 were 174.2 million barrels equivalent.

Daylight president and chief executive Anthony Lambert says, “We believe this transaction with SIPC recognizes the highly attractive asset portfolio and exceptional team that we have assembled at Daylight. The efforts and accomplishments of this team will be built upon through increased investment in the business and acceleration of our development and exploration opportunities.”

In 2010, Sinopec entered an agreement to acquire a 9.03% interest in the Canadian oil-sands Syncrude partnership from integrated energy company ConocoPhillips, Houston, (NYSE: COP) for $4.65 billion. The deal received government approval in June of that year.

Canaccord Genuity Corp. and CIBC World Markets Inc. are financial advisors to Daylight. Blake, Cassels & Graydon LLP are legal counsel to Daylight.

Barclays Capital is financial advisor to SIPC. Vinson & Elkins LLP and Bennett Jones LLP are legal counsel to SIPC.

The deal is expected to close by the end of December.