This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

The Deal: Chevron Canadian Unit Buys Shale Assets for $1B

NEW YORK ( The Deal) - Chevron Canada, an indirect unit of oil and gas giant Chevron (CVX - Get Report) said late Thursday, Aug. 1, it agreed to acquire all interests in the Duvernay shale formation in west-central Alberta from Alta Energy Luxembourg Sarl and affiliates. While financial details weren't disclosed, sources said that the deal that came in at just south of $1 billion.

The sale was a winner for Alta backer Blackstone Group (BX - Get Report) --a source with knowledge of the deal called the sale "very attractive" for the private equity firm. That person also described the acreage as "outstanding" for Chevron, which already owns properties in the area.

A Chevron Canada spokesman wouldn't comment and Blackstone and Alta didn't respond immediately to requests for comment.

The acquired interests cover 67,900 net acres in the Duvernay, which is a hot play in oil and gas circles, both for its natural gas--which could potentially supply future liquefied natural gas projects exporting to Asia --and its natural gas liquids, which fetch a higher market price. Talisman Energy Inc. also is selling its properties in the Duvernay area and Penn West Petroleum Ltd. could be as well.

Other oil giants have already poured into the region. Encana (ECA - Get Report) sold 49.9% of its 445,000 acres in the Duvernay play to a unit of PetroChina (PTR - Get Report) this past December as part of a joint venture deal for C$2.18 billion ($2.2 billion), which, at $9,800 per acre, turned some heads. And in October ExxonMobil (XOM - Get Report) bought Celtic Exploration --which owned 100,000 acres in the Duvernay shale as well as 545,000 acres in the Montney shale--for $3.1 billion. ConocoPhillips (COP - Get Report) bought properties in the Duvernay in the fall of 2011 and Royal Dutch Shell paid $5.2 billion for Duvernay Oil Corp. in 2008.

Chevron Canada president Jeff Lehrmann said in the release that the agreement strengthens the company's land position in the core part of this prospective wet shale gas play, where it has exploration leases totaling more than 250,000 acres. Chevron Canada in the second half of 2011 began a multiwell exploration program for unconventional resources in the Duvernay formation and said it achieved initial production last year on the 100%-owned and operated leases. "To date, we have been encouraged by the reservoir data and production performance from our exploration drilling program on our Kaybob Duvernay leases," Lehrmann said. "We are pleased to add to our acreage in this play as we advance our program to evaluate the potential for full-field commercial development."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BX $38.75 -1.00%
COP $62.79 -0.85%
CVX $103.55 -1.13%
ECA $11.63 -1.36%
PTR $106.70 -2.31%


DOW 17,856.78 -278.94 -1.54%
S&P 500 2,071.26 -29.78 -1.42%
NASDAQ 4,927.37 -55.4390 -1.11%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs