Under the terms of the agreement, ExxonMobil Canada will acquire 545,000 net acres in the liquids rich Montney shale, 104,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta.
Current production of the acreage to be acquired is 72 million cubic feet per day of natural gas and 4,000 barrels per day of crude, condensate and natural gas liquids. The assets were estimated by Calgary based Celtic Exploration at December 31, 2011 to include an estimated 128 million oil equivalent barrels of proved plus probable reserves, of which 24 percent are crude, condensate and natural gas liquids and 76 percent natural gas.
Approximately 60 employees at Celtic Exploration will be given the opportunity to transition to ExxonMobil employment.
Shareholders of Celtic Exploration will receive C$24.50 per share and half a share of a newly established company which will hold assets not included in the agreement with ExxonMobil Canada. These assets include acreage in the Inga area in British Columbia, the Grande Cache area in Alberta and interests in oil and gas properties located in Karr, Alberta.
The agreement is subject to approval by Celtic Exploration’s shareholders and Canadian regulatory authorities.
“This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio,” said Andrew Barry, president of ExxonMobil Canada. “Our financial and technical strength will enable us to maximize resource value by leveraging the experience of ExxonMobil subsidiary XTO Energy, a leading U.S. oil and natural gas producer which has expertise in developing tight gas, shale oil and gas and coal bed methane.”
ExxonMobil Canada, a subsidiary of Exxon Mobil Corporation (NYSE:XOM), has a long history in Canada that dates back to the 1940s. The company is a leader in the Atlantic Canada offshore, where it operates the Sable project in Nova Scotia, is lead owner of the Hibernia project in Newfoundland and Labrador, where it is developing the Hebron project. ExxonMobil Canada has additional assets in Western and Northern Canada.
ExxonMobil’s Canadian affiliate, Imperial Oil Limited, is not a party to the transaction, but may elect to participate at a later date through its existing agreement with ExxonMobil Canada that provides for up to equal participation in new Canadian upstream opportunities. Imperial Oil Limited has advised that it is currently evaluating this opportunity.
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