The Company acquired 13,636,364 common shares of MEG, representing a 16.69% stake at the close of the transaction.
Based in Calgary Canada, MEG is a pure play oil sands company, owning 100% working interest in oil sand leases of 52 contiguous sections (32,900 acres) in Alberta. It is estimated that there are over 4 billion barrels of bitumen in place, with a total recoverable reserves of about 2 billion barrels.
"I am excited with our low cost entry into oil sands, gaining a footstep in this potential area. Lower operating costs and higher recoveries resulting from recent advances in technologies have made many similar projects economically viable," commented Mr. Yang Hua, Chief Financial Officer and Senior Vice President of the Company.
According to The Alberta Energy & Utilities Board, the total bitumen volume in place in Alberta is approximately 1.6 trillion barrels, over 300 billion barrels of which are expected to be recoverable with current technology.
"The investment hits on our focus on long-term growth. At the same time, this move provides a good chance for us to exploit the advanced technology and expertise of oil sand development. These skills may help facilitate the exploitation of oil sand and shale in China, where large reserves of oil sand and shale were found in recent years," Mr. Fu Chengyu, Chairman and CEO of the Company, said.
MEG Energy Corp. is a private Calgary-based energy company. As to date, MEG owns 100% working interest in oil sand leases covering 52 continuous sections in Alberta, which holds most of Canada's oil sand. MEG's management team has a lot of experience in the development of oil sand.
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