CNOOC Ltd. and Nexen Inc. have entered an agreement under which CNOOC Limited will acquire all of the outstanding common shares of Nexen for US $27.50 per share in cash.

The purchase price represents a premium of 61% to the closing price of Nexen’s common shares on the NYSE on July 20 and a premium of 66% to Nexen's 20 trading-day volume-weighted average share price. Total cash consideration of approximately $15.1 billion will be paid for Nexen's common and preferred shares, and Nexen's current debt of approximately $4.3 billion will remain outstanding. The transaction, which will be completed by way of a plan of arrangement, is expected to close in the 4Q of 2012.

The acquisition of Nexen expands CNOOC’s overseas businesses and resource base in order to deliver long-term, sustainable growth. Nexen will complement CNOOC’s large offshore production footprint in China and extends CNOOC’s global presence with a high-quality asset base in many of the world’s most significant producing regions -- including Western Canada, the UK North Sea, the Gulf of Mexico, and offshore Nigeria -- focused on conventional oil and gas, oil sands, and shale gas.

In addition, Nexen management’s current mandate will be expanded to include all of CNOOC’s North American and Caribbean assets.