Canada’s second-largest integrated oil company will shell out $1.56 billion to acquire a 50 percent stake in Celtic Exploration Ltd. (TSE: CLT).
Imperial Oil Ltd. (TSE: IMO) “has the right to acquire 50 percent of any new Canadian business launched by its majority owner,” Reuters reports, and Exxon Mobil is that majority owner with a 69.6 percent stake.
Celtic, engaged in unconventional oil and gas production, is in the process of being taken over by Exxon.
“This acquisition will allow Imperial to diversify its strong resource base in Canada with an attractive liquids-rich natural gas play,” Chief Executive Bruce March said in a statement.
The acquisition could help Exxon’s acquisition receive faster approvals in Canada.
Still, the government has yet to approve other major deals including Chinese CNOOC Ltd.’s (NYSE: CEO) acquisition of Nexen Inc. (TSE: NXY) for $15.1 billion and Malaysian Petronas’ C$5.2 billion bid for Progress Energy Resources Corp. (TSE: PRQ).
The deal includes 649,000 net acres in the Montney and Duvernay shales—both liquids-rich, and both in Alberta, where Imperial already has a strong position.
The shale reserves in that province could hold up to 3,324 trillion cubic feet of natural gas, 58.6 billion barrels of gas liquids, and 423.6 billion barrels of oil. Current production, according to Imperial, is some 72 million cubic feet per day of natural gas, while condensates and natural gas liquids account for 4,000 barrels/day.
Shares for Imperial were down 1.04% on Friday morning to C$42.75.