Shell to divest Canadian oil and gas properties for $1.03 billion


Royal Dutch Shell has agreed to sell about 206,000 net acres of non-core oil and gas properties in Western Canada to Tourmaline Oil for approximately $1.03 billion.

The consideration consists of $758 million in cash and Tourmaline shares valued at $279 million.

As part of the transaction, Shell plans to sell 61,000 net acres in the Gundy area of north-east British Columbia, as well as 145,000 net acres in the Deep Basin area of west central Alberta, Canada.

The assets are a combination of developed and undeveloped lands and are currently producing 24,850 barrels of oil equivalent per day 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."

Shell upstream director Andy Brown said: “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.

“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’s shale portfolio focuses on North America and Argentina, and the company is currently maturing this portfolio as a growth option for beyond 2020.

The transaction is subject to regulatory approvals and is expected to close in the fourth quarter of this year.

In Alberta, the company retains about 430,000 net acres in the Duvernay liquids play and in north-east British Columbia it has around 218,000 net acres within the Montney gas play.

It also has material shale positions in the US in the Permian and Appalachia basins and Haynesville, and in the Vaca Muerta in Argentina.