ExxonMobil subsidiary to acquire Celtic Exploration

An subsidiary of ExxonMobil will acquire Celtic Exploration for a total consideration of $3.1bn.

ExxonMobil Canada will acquire 545,000 net acres in the liquids-rich Montney shale, 104,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta.

Under the terms of the agreement, the company will acquire holdings producing 72 million cubic feet per day of natural gas and 4,000 barrels per day of crude, condensate and natural gas liquids.

As of 31 December 2011, the assets have an estimated 128 million barrels of oil equivalent proved plus probable reserves, of which 24% are crude, condensate and natural gas liquids and 76% are natural gas.

Exxon will pay about C$24.50 ($24.92) a share and existing Celtic shareholders will also receive 0.5 of a share in a new company, to be led by Celtic’s current management team.

The new company will hold assets not included in the agreement with ExxonMobil Canada, which include acreage in the Inga area in British Columbia, the Grande Cache area in Alberta and interests in oil and gas properties located in Karr, Alberta.

The transaction is subject to approval by Celtic Exploration’s shareholders and Canadian regulatory authorities, reports nytimes.com.

ExxonMobil Canada president Andrew Barry said the acquisition will add significant liquids-rich resources to its existing North American unconventional portfolio.

"Our financial and technical strength will enable us to maximize resource value by leveraging the experience of ExxonMobil subsidiary XTO Energy, a leading US oil and natural gas producer which has expertise in developing tight gas, shale oil and gas and coal bed methane," said Barry.

ExxonMobil Canada is a subsidiary of Exxon Mobil and has additional assets in western and northern Canada.