OREANDA-NEWS. February 04, 2014. The chairman of a Chinese state-owned oil giant says it isn’t done shopping for Canadian energy assets after wrapping up a USD320-million deal to buy Novus Energy Inc..

Zhang Kaiyong, chairman of Yanchang Petroleum International Ltd., said this is the first time the company has made a deal in Canada but it won’t be the last.

“Overall the Yanchang group is following its own development strategy and part of it is going out ... to international markets,” he told the Herald through an interpreter.

“At this stage of our development, (we are) coming to Canada which is politically stable, well-regulated, transparent. So overall the bigger conditions of investing in Canada are very good.”

Hugh Ross, president and chief executive of Novus, called it a “landmark transaction.”

He said Yanchang is a “substantial” company that did USD 25 billion in revenues last year and is the 182nd largest company in the world. It’s the oldest oil producer in China, in operation since 1905.

“They have substantial resources. I think they like us because since starting this company we’ve been a very aggressive producer ... I think what they’d like to do is grow through the drill bit and future acquisitions. We have a lot of undrilled land in Saskatchewan and we’ve been acquiring a lot of land across the border into Alberta,” said Ross.

The deal announced in September includes about USD 100 million in assumed debt. Yanchang is to pay \\$1.18 in cash for each share of Novus.

The common shares of Novus are expected to be delisted from the TSX Venture Exchange in a few trading days.

Novus managers will be staying on under the new owners.

The deal is the biggest Chinese buy of Canadian assets since CNOOC Ltd. completed the USD 15.1-billion takeover of Calgary-based Nexen Inc. in February.

Alberta Energy Minister Diana McQueen said Monday the deal shows continued confidence by China in Alberta’s and Canada’s energy sector. She added that the province has interest in attracting more investment from China.

Yanchang Petroleum International is a Hong Kong-listed public company. Shaanxi Yanchang Petroleum Group, the fourth-largest oil producer in China, is the largest shareholder of Yanchang Petroleum International.

In 2013, Yanchang Petroleum Group was ranked 464th among the Fortune 500 and 183rd in terms of earnings.

Ross said Novus did its first financing in April 2009 and today has 25 employees.

Most of its assets are in the Viking formation near Kindersley in southwestern Saskatchewan, where it drills 800-metre-deep horizontal wells to produce light oil.

So far it has expended about a quarter of a billion dollars in the play and, since drilling began in 2010, it has drilled 250 wells.