Chevron Corporation announced that its subsidiary Chevron Canada Limited has reached agreement to sell a 30% interest in its Duvernay shale play to Kuwait Foreign Petroleum Exploration Company's subsidiary, KUFPEC Canada Inc., for US$ 1.5 billion.
The Duvernay is located in west-central Alberta, and is believed to be among the most promising shale opportunities in North America.
The agreement creates a partnership for appraisal and development of liquids-rich shale resources in approximately 330,000 net acres in the Kaybob area of the Duvernay.
"This sale demonstrates our focus on strategically managing our portfolio to maximise the value of our global upstream businesses and is consistent with our partnership strategy," commented Jay Johnson, Senior VP, Upstream, Chevron Corporation.
"The transaction provides us an expanded relationship with a valued partner. It also recognizes the outstanding asset base we have assembled."
Following the closing of the transaction, Chevron Canada will hold a 70% interest in the joint venture Duvernay acreage and will remain the operator. The transaction is expected to close in November 2014.
"We remain encouraged by the early results of our exploration program and view the Kaybob Duvernay as an exciting growth opportunity for the company," added Jeff Shellebarger, President of Chevron North America Exploration and Production Company.
Adapted from press release by Katie Woodward