The Deal: Chevron Canadian Unit Buys Shale Assets for $1B
NEW YORK (The Deal) - Chevron Canada, an indirect unit of oil and gas giant Chevron
The sale was a winner for Alta backer Blackstone Group
A Chevron Canada spokesman wouldn't comment and Blackstone and Alta didn't respond immediately to requests for comment.
The acquired interests cover 67,900 net acres in the Duvernay, which is a hot play in oil and gas circles, both for its natural gas--which could potentially supply future liquefied natural gas projects exporting to Asia --and its natural gas liquids, which fetch a higher market price. Talisman Energy Inc. also is selling its properties in the Duvernay area and Penn West Petroleum Ltd. could be as well.
Other oil giants have already poured into the region. Encana
Chevron Canada president Jeff Lehrmann said in the release that the agreement strengthens the company's land position in the core part of this prospective wet shale gas play, where it has exploration leases totaling more than 250,000 acres. Chevron Canada in the second half of 2011 began a multiwell exploration program for unconventional resources in the Duvernay formation and said it achieved initial production last year on the 100%-owned and operated leases. "To date, we have been encouraged by the reservoir data and production performance from our exploration drilling program on our Kaybob Duvernay leases," Lehrmann said. "We are pleased to add to our acreage in this play as we advance our program to evaluate the potential for full-field commercial development."