(Yicai Global) April 23 -- US oil and gas developer EOG Resources will sell its development rights to the Bajiaochang natural gas field in southwestern China to a unit of Hainan Mining for USD140 million.

Roc Oil Holdings (Cayman Islands) has penned an equity transfer agreement with EOG Resources China, Hainan Mining said.

Although no reasons were given for the sale, the price of oil and gas has plummeted in the last year due to the Covid-19 pandemic. Houston-based EOG, which has run the Sichuan province gas field since 2008, posted losses of USD604.6 million last year on revenue of USD11 billion.

The Bajiaochang gas field, which is owned by China National Petroleum Corp., has 34 wells that last year produced 378 million cubic meters of natural gas, equivalent to 2.3 million barrels of oil. It brought in USD27.8 million in net profit and USD52.5 million in operating revenue that year, Hainan Mining said.

Once the deal is closed, Hainan Mining, which is a unit of Chinese conglomerate Fosun International, expects its annual oil and gas output to double and its oil and gas reserves to rise by 70 percent.

EOG’s stock price [NYSE:EOG] closed down 0.86 percent at USD68.37 per share yesterday. Hainan Mining’s shares [SHA:601969] closed flat at CNY6.27 (USD0.97) today.

Editor: Kim Taylor