1. Shell sells non-core Canadian oil and gas assets for $1 billion

Shell sells non-core Canadian oil and gas assets for $1 billion

Royal Dutch Shell Plc said on Thursday it is selling about 206,000 acres (83,365 hectares) of non-core oil and gas properties in western Canada to Tourmaline Oil Corp for about $1.03 billion.

By: | Calgary | Published: October 21, 2016 4:46 AM
Shell Upstream Director Andy Brown said the company was selling the assets because they did not fit into Shell's near-term development plans. (Reuters) Shell Upstream Director Andy Brown said the company was selling the assets because they did not fit into Shell’s near-term development plans. (Reuters)

Royal Dutch Shell Plc said on Thursday it is selling about 206,000 acres (83,365 hectares) of non-core oil and gas properties in western Canada to Tourmaline Oil Corp for about $1.03 billion.

The deal consists of $758 million in cash and Tourmaline shares valued at $279 million, Shell said.

The assets include 61,000 acres (24,685 hectares) in the Gundy area of the Montney shale play in northeast British Columbia and 145,000 acres (58,679 hectares) in the Deep Basin area of West Central Alberta.

Together the properties produce around 24,850 barrels of oil equivalent per day, and are a combination of developed and undeveloped lands.

Shell Upstream Director Andy Brown said the company was selling the assets because they did not fit into Shell’s near-term development plans.

“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,” Brown said.

The Duvernay, along with the Montney, is considered one of Canada’s best shale plays.

Calgary-based Tourmaline said in a statement the acquisition was a major step in the company’s plan to becoming one of North America’s largest, lowest-cost and most-profitable natural gas and liquids producers.

Tourmaline will also acquire Shell Canada infrastructure including three gas plants and 447 miles (719 km) of pipelines, and has pegged its 2018 production estimate at 310,000-320,000 boepd. It expects to produce 190,000-195,000 boepd on average in 2016.

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