Goldleaf buys US oil firm for US$665m

Goldleaf Jewelry, a Chinese jewellery retailer with gold-mining investments, plans to buy United States oil and gas operator ERG Resources for at least US$665 million.

The Beijing-based company said in a statement yesterday to the Shenzhen stock exchange it would pay for the acquisition with a private share placement, raising as much as 5.7 billion yuan (HK$7.2 billion) from no more than 10 investors.

Goldleaf will hold a 95 per cent stake in Texan-based ERG after the purchase.

Buying closely held ERG would give Goldleaf a foothold in oil assets on the gulf coast and California, adding to US$16 billion of oil and gas deals announced by Chinese companies in the past year, data showed.

ERG sold 13 oilfields to Australia's Linc Energy in 2011 for US$236 million.

Goldleaf, which suspended its shares on January 1, resumed trading yesterday in Shenzhen. It surged the daily limit of 10 per cent to 13.77 yuan in the morning session.