“Lock, Stock and Barrel”

STX Energy takes over 100 pct stake of Maxhamish gas field from EnCana to secure 40 mln Canadian dollars in annual sales

STX Energy Co., an affiliate of the STX Group, said recently that it has taken over a gas mining district in Canada by signing an agreement with EnCana for the 100 percent takeover of the Maxhamish gas production district for C$152 million on Aug. 29.
The gas field is 616 square km wide, equal to the size of Seoul, and is said to contain 120 billion cubic feet of natural gas, as large as 37 days’ gas supply that Seoul consumes.
The gas field currently produces 205 billion cubic feet of gas per day and STX Energy plans to boost the daily production to 270 billion cubic feet. The company expects the gas field will yield C$40 million on average in annual sales for the next 30 years. The most outstanding significance of the takeover is that it includes the right to manage the mining district itself.
President Lee Byung-ho said up until now, Korean energy companies took over stakes in energy fields with the exclusion of operating rights and the significance of this takeover is that it includes the operation rights, truly launching the exploration of overseas natural resources. He also added that the company will try to take over additional mining district operation rights in North America and Australia with Chairman Kang Duk-soo meeting with top EnCana officials in Calgary, including President Randy Eresman, for mutual cooperation in a number of energy exploration areas including joint investments in energy exploration such as the installation of equipment, joint operations in third countries and electronic transactions, reaching agreements in a number of areas.
EnCana, with total assets of C$21 billion, is second to Exxon in the production of natural gas in North America, Lee said, adding that the two companies will be able to benefit from mutual cooperation in the energy business with STX providing know-how on installations and EnCana chipping in with its vast experience in natural gas exploration. STX is engaged in offshore energy exploration projects off the coast of Ireland with Shell and ENI, the Lone Wolfe mining district in Texas, a gas chemical construction project in Uzbekistan, an oil exploration project and non-traditional gas exploration projects in Canada and Australia, and iron ore mining projects in Australia and China, among others.
In the meantime, Chairman Kang Duk-soo of STX Group said he will make sure that the group will have more than three of its business lines tops in the world by 2020.
He made the announcement at the group’s 2010 strategy meeting for the first half of 2010 held at the STX Munkyung Training Institute in Munkyung, North Gyeongsang Province, on June 4-5 where some 200 of affiliate CEOs and top executives of the group were gathered.
He stressed the importance of solidifying the group’s business lines and adding new growth engines while jettisoning those with not much future viability so that the group will be able to put more than three of its business lines at the top.
The group’s main lines of business consist of shipbuilding, shipping and machinery, in addition to a number of new business lines in such areas as energy, plant construction, general and housing construction, but it still doesn’t have its business lines that are number one in the world. Kang feels that the group should work hard to place more than three of its business lines at the lead in the world by 2020 and, in so doing, upgrade all of the businesses the group has been engaged in.
“It’s no longer the question of who will make changes, but who will do it first and faster than any others,” Kang told CEOs and other leading executives of the group at the strategy meeting, adding, “We are in the age of competition for speed of changes.” nw

(clockwise) President Lee Byung-ho of STX Energy Co. signs an agreement to take over 100 percent stake in the Maxhamish gas field in Canada from EnCana with Senior Vice President Bob Grant of EnCana on Aug. 29 in Calgary, Canada.; Chairman Kang Duk-soo of STX Group shakes hands with Chairman Randy Eresman of EnCana Co. after agreeing on a wide-range of cooperation in the energy exploration area on Aug. 29 at EnCana’s head office in Calgary, Canada.; A map showing the location of Maxhamish gas field in Canada.