ConocoPhillips agrees to buy Canadian land from Kelt

US oil major ConocoPhillips has signed a definitive agreement to buy land from oil and gas firm Kelt Exploration in Canada’s Montney shale oil play.

The deal is valued at a cash consideration of around $375m and an additional $30m in financing obligations for the partially owned infrastructure.

The deal will see the company acquire 140,000 acres in the Montney zone, adjacent to ConocoPhillips’ existing position in the area.

According to the company, the acquisition will add more than one billion barrels of oil equivalent of high-value resource with an attractive supply cost.

ConocoPhillips noted that the production associated with the acquired asset is expected to be about 15,000 barrels of oil equivalent per day (boepd).

ConocoPhillips executive vice-president and chief operating officer Matt Fox said: “We have tracked and analysed this adjacent acreage position for a long time. It represents a high-value extension of our existing Montney position, and we’re pleased to capture this opportunity at an attractive cost of supply that meets our criteria for resource additions.

“The transaction provides operating scale and flexibility to create significant value for shareholders by applying our drilling and completion techniques on this asset and optimising our future overall Montney development plans.”

Expected to be closed in the third quarter of this year, the transaction is subject to necessary regulatory approvals.

Last month, ConocoPhillips deployed Mendix low-code application development platform across its operations.

In May this year, ConocoPhillips sold its subsidiaries that hold its Australia-West assets and operations to Santos for $1.265bn.

In March, ConocoPhillips sold two oil assets in the Permian Basin and the southern Denver-Julesburg (DJ) Basin to undisclosed buyers.