Samsung C&T, KNOC to buy US-based Parallel Petroleum for$780 million

Samsung C&T, the trading arm of Samsung Group and state-run oil firm Korea National Oil Corp (KNOC) today agreed to buy US oil and gas company Parallel Petroleum from private equity firm Apollo Global Management.

Although the South Korean companies did not disclose the deal size, Bloomberg, citing two people with knowledge of the deal, said that the transaction was for about $780 million.

In the biggest overseas purchase in the energy industry by a Korean company this year, Samsung C&T will acquire a 90-per cent stake in Midland, Texas-based Parallel, while KNOC will own the rest.

Samsung C&T said it plans to invite financial investors for some stakes in the future.

Parallel owns and develops eight oil-producing fields and two gas fields west Texas and New Mexico, including a Barnett shale gas project near Forth Worth.

The company produces 8400 barrels per day and has total reserves of 69 million barrels. The company was acquired by Apollo in 2009 for about $483 million.

The acquisition will enable Samsung to expand its natural resources business in the US. In 2008, Samsung C&T had teamed up with KNOC to acquire Ankor oil fields located in the Gulf of Mexico.