Mergers & Acquisitions

Shell sells non-core Canadian shale assets

Shell sells non-core Canadian shale assets
Photo courtesy of Shell.

Royal Dutch Shell plc, through its affiliate Shell Canada Energy, announced that it has agreed to sell approximately 206,000 net acres of non-core oil and gas properties in Western Canada to Tourmaline Oil Corp. for approximately USD1,037 million.

The consideration is comprised of USD758 million in cash and Tourmaline shares valued at US279 million.

Subject to regulatory approvals the transaction is expected to close in the fourth quarter of 2016.

The acreage includes 61,000 net acres in the Gundy area of Northeast British Columbia, Canada, and 145,000 net acres in the Deep Basin area of West Central Alberta, Canada.

The assets are a combination of developed and undeveloped lands, along with related infrastructure, producing 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.

In Canada, Shell 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.

This transaction is the latest in a string of transactions aimed at shedding assets to make room for its recently acquired BG Group.

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