China wants the natural gas in the US, so why isn't America interested in it, asked CNBC's Melissa Lee on Monday's "Fast Money."
Cnooc , a Chinese government-run oil company, said Sunday it agreed to buy a third of Chesapeake's oil and gas assets in a south Texas shale deposit for $1.1 billion. The Chinese oil company will also pay for an additional $1.1 billion in drilling costs through 2012.
Given the US has "more nat gas than we know what to do with," will it ever become America's fuel of choice, queried Lee.
This deal is consistent with what the Chinese have been doing, said Tim Seymour, founder of EmergingMoney.com, and that is securing energy plays "without over stepping their grounds." He thinks it's a "very smart deal for them" and noted that while the US isn't yet exploiting its natural gas fields, Seymour said, "They will. Maybe that's good for overall pricing for everybody."
As far as going out and buying Cnooc, Seymour would be a little cautious. He said the oil company will overpay for acquisitions so long as the country has plenty of reserves. For that reassign, Seymour recommends getting on the other side of this trade.
Since this time last year, when Chesapeake's stock was trading at around $30 a share, it has made a series of higher highs and lower lows, said Drakon Capital's Guy Adami. To break that trend, it needs to get above $25.50 a share.Page 1 of 6 | Next Page