Chinese national oil companies (NOC) are purchasing west Texas oil assets for $1.3 billion.
Shanghai-listed Yantai Xinchao Industry Co. Ltd. said it would buy oil fields in Howard and Borden counties from Nevada-based companies Tall City Exploration and Plymouth Petroleum, according to The Associated Press.
Yantai Xinchao signed a letter of intent Friday with Ningbo Dingliang Huitong Equity Investment Center, a limited liability partnership, and its seven shareholders to buy the west Texas oil properties through a subsidiary, Moss Creek Resources LLC.
The oil fields lie within the Permian Basin, which has seen resurgence in recent years thanks to horizontal drilling and hydraulic fracturing. Investors have been attracted to the Permian Basin due to low drilling costs and easy access to market.
On Tuesday, oil prices fell to $47.72 a barrel, its lowest price since mid-September. Declining oil prices have resulted in an oversupply and made asset prices particularly attractive to potential buyers.
Chinese investment in American energy resources has been limited due to restrictions, but the transaction was approved by the Committee on Foreign Investment in the United States, according to Moss Creek Resources.