Shell to Sell $1 Billion of Canadian Assets
October 21 2016 - 2:40AM
Dow Jones News
CALGARY, Alberta--Royal Dutch Shell PLC said it had reached a
deal to sell $1 billion of shale-oil and gas assets in Western
Canada as part of a global divestment program to raise cash and
streamline its business operations.
Shell said Thursday it would sell developed and undeveloped
acreage in the Canadian provinces of Alberta and British Columbia
to Calgary-based Tourmaline Oil Corp. Those assets currently
produce dry gas and natural-gas liquids equivalent to 24,850
barrels a day of oil.
The deal comes as Shell seeks to shed $30 billion assets
world-wide after its $50 billion acquisition of BG Group PLC in
February. It represents a further retrenchment for Shell in Canada,
where a year ago it shelved plans for a major new oil-sands project
and took a $2 billion write-down.
"We are strengthening our shales business and creating
shareholder value by selling assets that do not fit our near-term
development plans," Andy Brown, the head of Shell's exploration and
production business, said in a statement.
The oil-and-gas major called the approximately 206,000 net acres
it is selling to Tourmaline "noncore" assets and said it retained
about 430,000 net acres in Alberta's Duvernay Shale basin and some
218,000 net acres in the Montney Formation of British Columbia.
In addition to the acreage, Tourmaline will acquire three
Canadian natural gas processing plants and about 450 miles of
pipelines from Shell as part of the deal, which is valued at $1.04
billion, the Canadian company said.
Write to Chester Dawson at chester.dawson@wsj.com
(END) Dow Jones Newswires
October 21, 2016 03:25 ET (07:25 GMT)
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