Shell Canada Energy (Shell) announced that it has agreed to sell approximately 206,000 net acres of non-core oil and gas properties in Western Canada to Tourmaline Oil Corp. for a total consideration of approximately $1,037 million (C$1,369 million).
The consideration is comprised of $758 million in cash and Tourmaline shares valued at $279 million. Subject to regulatory approvals the transaction is expected to close in the fourth quarter of 2016.
“Shell actively manages its portfolio and we frequently consider a wide range of opportunities. This is an ongoing process to help ensure we have the right mix of assets to produce value for our shareholders and deliver our business strategy,” Shell Canada’s spokesperson, Cameron Yost told Global LNG Info.
“We consider this acreage non-core as we have elected to mature other attractive Shales positions in Canada. It therefore makes sense to divest these to a company who sees more near term value with them,” Yost added.
The acreage includes 61,000 net acres in the Gundy area of Northeast British Columbia, Canada, and 145,000 net acres in the Deep Basin area of West Central Alberta, Canada. The assets are a combination of developed and undeveloped lands, along with related infrastructure, producing 24,850 BOE/D of dry gas and liquids, according to Shell.
Shell asset in Northeast British Columbia, Canada, and consists of four natural gas processing plants and more than 420 producing wells. Currently, Shell Groundbirch produces approximately 440 MMCF/D of natural gas and has an expected field life of over 35 years.
The Groundbirch asset includes two fields in the Montney formation: Groundbirch and Gundy. Shell has an 80% working interest in Groundbirch and a 100% working interest in Gundy.
Shell Canada-operated LNG Canada had postponed FID on its proposed gas liquefaction project in August. However, Shell Canada remains confident of its “gas supply strategy for LNG Canada and ample production from Groundbirch acreage to source gas from should the project go forward.”

Related Story:

LNG Canada postponed FID date