Royal Dutch Shell announced today it has agreed to sell oil and gas assets in Western Canada for a total consideration of approximately US$1.037 billion (£847.364 million).
“Shell retains a significant shale position in Canada and we are actively working to mature our attractive core asset base in the Montney and Duvernay,” Shell Upstream Director, Andy Brown, said.
Shell Divests Oil and Gas Assets in Canada
Under the agreement, the company sold approximately 206,000 net acres of non-core oil and gas properties in Western Canada to Tourmaline Corp. through its affiliate Shell Canada Energy.
The acreage includes 61,000 net acres in the Gundy area of Northeast British Columbia and 145,000 net acres in the Deep Basin area of West Central Alberta.
Shell CEO Ben Van Beurden
According to a statement by Shell, the assets are a combination of developed and undeveloped lands, as well as related infrastructure, producing 24,850 barrels of oil equivalent per day (boepd) of dry gas and liquids.
The consideration comprises US$758 million (£619.38 million) in cash and Tourmaline shares valued at US$279 million (£227.97 million).
Shell Focuses on Shale Business
“At the same time, we are strengthening our shales business and creating shareholder value by selling assets that do not fit our near-term development plans,” the director added.
Meanwhile, the deal is subject to regulatory approvals and is expected to close in the fourth quarter of 2016.
The company stated further that it owns a large shales portfolio focused on North America and Argentina and is currently maturing this portfolio as a growth option for beyond 2020 with material value and substantial long-term potential.
Overall, Shell retains assets in the Duvernay liquids play in Alberta and the Montney gas play in Northeast British Columbia.
As well as this, the company owns shale positions in the Permian and Appalachia (Marcellus/Utica) basins and Haynesville, in the United States, and in the Vaca Muerta play in Argentina.