Verenex  had earlier announced that it was seeking for possible buyers with its board  recommending shareholders tender to the $10-per-share cash offer.

Since Verenex operates in Libya the first  consent  for the deal should be from the Libyan National Oil Corp. The approval appears likely, as Libyan National had earlier approved a list of large companies qualified to view the confidential technical data on assets in the North African country’s Ghadames Basin.

« I think it’s a fair deal for shareholders and Verenex obviously worked towards getting the best deal possible, » Tristone Capital analyst Toby Pierce said.

« At this stage I think people should be happy given the state of capital markets. »

The deal includes a $15-million break fee payable to China National in the event of a superior offer, which UBS Investment Research analyst Grant Hofer does not see happening.

« Given the extensive auction process, we do not anticipate that further bids are likely, » he wrote in a note to clients.

Verenex, which acquired rights to what’s known as Area 47 in 2005 and has drilled 16 exploration and appraisal wells, released an estimate last year that the area contains 2.15 billion barrels of oil equivalent.

« That’s exactly what they Chinese want. They want a point of access to a major resource base to facilitate their growth going forward, » Pierce said.

Verenex is  42 per cent owned by Vermilion Energy Trust. As the exploration  operator  it holds  a 50 per cent interest for an initial five-year period, reduced to 25 per cent for commercial developments in the subsequent 25 years.

Another Chinese energy company, Sinopec, bought Calgary-based Tanganyika Oil Co. Ltd., which has its  main operations are in Syria for $2 billion in December.

Source : Konaxis