NEW YORK ( TheStreet) -- Imperial Oil (IMO - Get Report) and the Canadian unit of Exxon Mobil (XOM - Get Report) said they were teaming up to acquire oil sands leaseholds in Alberta currently owned by Conoco Phillips (AAPL) in a deal valued at $720 million.
The deal for the Clyden oil sands project includes about 226,000 net acres of undeveloped land about 100 miles south of Fort McMurray, Alberta. The land is near acreage Imperial Oil already controls.
Terms of the deal call for ExxonMobil Canada to acquire a 72.5% stake in Clyden, with Calgary-based Imperial buying the remaining 27.5%. Imperial said that the higher initial interest allows Exxon to bring in a partner, after which it will remain an equal partner in the venture.
"The Clyden oil sands lease is a high-quality addition to Imperial's portfolio of oil sands in-situ opportunities," Imperial chairman and CEO Rich Kruger said. "This acquisition is consistent with Imperial's strategy to position ourselves for long term business growth."ConocoPhillips is the holder of one of the largest land and resources positions in northeastern Alberta, controlling about 1.1 million net acres with bitumen deposits that are estimated to contain about 16 billion net barrels of resources. Company executive vice president Don Wallette in a statement said Thursday's sale "is a significant step towards rebalancing our world-class oil sands portfolio." The company said it expects to record an after-tax gain of about $450 million on the sale, which is expected to be completed in the current quarter, subject to the approval of Canada's Competition Bureau. The sale is part of a broader asset reshuffling by ConocoPhillips, including a $1.05 billion divestiture announced in January and a November deal to sell its interest in a Caspian Sea project to ONGC Videsh for about $5 billion. The company has now announced deals worth about $13.5 billion since the beginning of 2012, with proceeds set for general corporate purposes and to fund remaining programs that ConocoPhillips believe are ripe for growth. Shares of Imperial Oil were slightly higher in Thursday trading, gaining 0.25% to $40.41. Conoco and Exxon shares were mixed, with Conoco losing 0.18% to $66.40, while Exxon was flat at $91.34.