Time and time again, the market reminds us that "it ain't over 'til the fat lady sings." So while Chevron (NYSE:CVX) might like to think it has its acquisition of Unocal (NYSE:UCL) all wrapped up, China National Offshore Oil Corp., better known as CNOOC (NYSE:CEO), might yet have something to say about it.

Along with Italy's Eni (NYSE:E), CNOOC was one of the last bidders on Unocal to back away before Chevron announced its $18 billion deal. Now it seems, if the company's statements to the Hong Kong stock exchange are to be taken at face value, that it hasn't yet given up on the idea.

On the surface, a CNOOC takeover of Unocal makes a lot of sense. Unocal's biggest strength is its Asian deepwater assets -- right off CNOOC's front porch, as it were. What's more, adding Unocal's 1.75 billion barrels of oil equivalent in reserves would come close to doubling CNOOC's current reserves.

Further, it fits in nicely with CNOOC's plans to increase production. CNOOC has set a heady target of a 19% production increase, along with increasing reserves at a faster rate of 1.5 barrels for each barrel produced. Now, while the company can probably do that without Unocal, making such a big addition would obviously help the cause.

The biggest question, though, is whether the company can actually pull it off. That's where I get a bit skeptical. CNOOC isn't that much larger than Unocal (with an enterprise value of about $23 billion compared with about $16.7 billion for Unocal), and while the balance sheet is pretty clean, I don't know whether it could raise enough debt to pay for the deal.

Furthermore, while the original Chevron offer was 75% stock and 25% cash, I'm not sure whether American institutional investors are going to be as receptive to holding CNOOC stock as they would be to holding Chevron stock. Without a stock component, I just don't know whether CNOOC can do it.

Whether the deal goes through or not, there's a lot to like about CNOOC. Not only does the company have the nice margins and return on equity that you'd expect in the midst of an oil boom but also it has a pretty good production and reserve profile as well. Best of all, its production and finding costs are quite competitive ($9.93 per barrel and $4.68 per barrel, respectively), and that's one of the real keys to long-term value and success.

Though CNOOC carries all of the baggage related to being largely owned by the Chinese government, intrepid investors may want to take a look anyway. Given the debt and hassles that would be involved in a (presumably) hostile takeover of Unocal, the best deal of all may be the one it ends up not making.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).