The acquisition—which still needs approval—would be the largest purchase of a Canadian oil and gas company by a Chinese company since CNOOC’s $15.1-billion takeover of Nexen.

The purchase price of all of the issued and outstanding common shares of Novus—a cash price of C$1.18 per share—represents a 40% premium over the closing price on the TSX Venture Exchange on 27 August 2013 and a 44% premium over the 1-month volume weighted average trading price.

Yanchang Petroleum International is a Hong Kong listed public company and is principally engaged in the exploration, exploitation and operation of oil and gas fields and refined oil wholesale and retail businesses. Shaanxi Yanchang Petroleum (Group) Co., Limited, the fourth largest oil producer in China with more than 100 years of history, is the largest shareholder of Yanchang Petroleum International and has majority representation on the Board of Directors of Yanchang Petroleum International.

In 2012, Yanchang Petroleum Group achieved annual revenue of RMB 162 billion (approximately US$25 billion) and is the largest enterprise in Shaanxi province in terms of annual revenue.

Novus is mainly working in the Viking and Cardium plays in Alberta and Saskatchewan. These plays have large “original-oil-in-place” and well delineated, low geological risk reserves, the company said. Using improved horizontal drilling and multi-stage frac technology, Novus is working to exponentially increase recovery factors and improve the economics of development.