Global energy giant Chevron Corporation on Monday announced that its subsidiary, Chevron Canada Limited, has reached agreement to sell a 30 percent stake in its Duvernay shale formation assets to Kuwait Foreign Petroleum Exploration Co for $1.5 billion.
The Duvernay is located in west-central Alberta in Canada, and is believed to be among the most promising shale opportunities in North America, the company said in a statement.
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.
Chevron Canada has drilled 16 wells since beginning its exploration program, with initial well production rates of up to 7.5 million cubic feet of natural gas and 1,300 barrels of condensate per day.
"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," said Jay Johnson, senior vice president, 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 percent interest in the joint venture Duvernay acreage and will remain the operator. The transaction is expected to close in November.