Royal Dutch Shell plc’s affiliate Shell Canada Energy has agreed to sell its Duvernay shale light oil position in Alberta, Canada to energy company Crescent Point Energy for $707 million (C$900 million).
The consideration is comprised of $550 million in cash and 50 million shares (valued at $157 million) in Crescent Point Energy common stock (TSX:CPG). Subject to regulatory approvals, the transaction is expected to close in April 2021.
“Divesting these assets underpins Shell’s effort to focus the Upstream portfolio to deliver cash,” said Wael Sawan, Upstream Director at Shell.
The transaction includes the transfer of approximately 450,000 net acres in the Fox Creek (Kaybob) and Rocky Mountain House (Willesden Green) areas, along with related infrastructure, currently producing around 30,000 barrels of oil equivalent per day (boe/d) from more than 270 wells.
Crescent Point Energy will retain the field employees and several technical and commercial roles that support the assets.
Shell has been operating in Canada for more than 100 years.
Shell’s footprint in Canada includes a 40 percent interest in LNG Canada; Shale gas positions in British Columbia (Groundbirch) and gas and liquids positions in Alberta (Gold Creek); the Scotford Complex in Alberta, identified as one of Shell’s six high-value energy and chemicals parks; investments in cleaner energy including the first waste-to-low-carbon-fuels plant in Quebec; and a retail business with around 1,400 Shell-branded sites across Canada, among others.
Shell has approximately 500 producing wells in the Groundbirch acreage in Northeast British Columbia, of which roughly 75 percent of those wells have joint venture ownership, and the Gold Creek asset in the wet Montney play where Shell has about 40 wells on-stream, averaging approximately 4,000 boe/d.
Shell’s global Upstream strategy aims for a more focused, competitive and resilient portfolio to deliver cash. It includes nine core positions globally and lean Upstream positions that will either mature into core positions, be repurposed or be monetized through divestment.