Approximately 206,000 net acres of non-core oil and gas properties in Western Canada owned by Royal Dutch Shell plc, through its affiliate Shell Canada Energy, will be acquired by Tourmaline Oil Corp., a Canadian senior crude oil and natural gas exploration and production company.
The consideration is comprised of US$758 million in cash and Tourmaline shares valued at US$279 million for a total consideration of approximately US$1.037 billion (C$1.369 billion).
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. A combination of developed and undeveloped lands, along with related infrastructure, the assets produce 24,850 barrels of oil equivalent per day (boe/d) of dry gas and liquids.
“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,” said Andy Brown, Shell Upstream Director. “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.”
Shell has 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.
The company retains approximately 430,000 net acres in the Duvernay liquids play in Alberta and approximately 218,000 net acres in the Montney gas play in Northeast British Columbia. Shell also has material shale positions in the United States in the Permian and Appalachia (Marcellus/Utica) basins and Haynesville, and in the Vaca Muerta in Argentina.
Excluding the said divested assets in Western Canada, production from Shell’s Americas shales portfolio is approximately 250,000 boe/d.
The sale transaction is expected to close in the fourth quarter of 2016.