YANTAI Xinchao Industry Co., a Shanghai-listed real estate developer little known in China, has agreed to spend about 8.3 billion yuan (US$1.31 billion) to buy oilfields in the U.S. state of Texas.

    The oilfields, in Howard and Borden counties, will be bought from two U.S. companies — Tall City Exploration LLC and Plymouth Petroleum LLC. Plymouth Petroleum is owned by Boston-based ArcLight Capital Partners LLC, a private-equity firm. Tall City is backed by another, Denham Capital Management LP.

    The transaction has already been approved by the U.S. Treasury’s Committee on Foreign Investment.

    Yantai Xinchao’s U.S. deal is part of a deal to buy an investment company called Ningbo Dingliang Huitong Equity Investment Center.

    In a securities filing Saturday, Yantai Xinchao gave few details on the oil assets being purchased, beyond saying they were in the Texas counties of Howard and Borden. However, the fields being purchased lie within what is known as the Permian Basin, a vast area that has been drilled for decades and undergone a resurgence in recent years as new technology enabled energy producers to tap deeper oil and gas deposits.

    As the fall in oil prices has rendered many prospects around the United States uneconomic, investors have flocked to the Permian, drawn by low drilling costs and easy access to market that make many wells still worth drilling.

    A host of Chinese firms, including some whose primary businesses are outside of oil and gas, have expressed interest in buying up energy assets in North America. The long slide in global oil prices as a result of oversupply has, in many cases, made asset prices particularly attractive.

    The United States has long been a desired destination for Chinese energy companies, owing to stable laws governing oil exploration and production. But U.S. restrictions on Chinese investment in potentially sensitive areas means investment in U.S. energy by Chinese companies is, to date, limited.

    Yantai Xinchao said it had already received permission from the U.S. Government for the deal. (SD-Agencies)