Bruce March, president and CEO of Imperial Oil, addresses the company's annual meeting in Calgary, Thursday, April 28, 2011.Jeff McIntosh/The Canadian Press
Imperial Oil says it will invest $1.55-billion to acquire a half interest in the assets of Celtic Exploration Ltd.
The Calgary-based exploration and production company is currently in the process of being fully acquired by ExxonMobil Canada Ltd., which announced a $3.1-billion bid for Celtic in October. The acquisition of Celtic is awaiting approval from both shareholders and Canadian regulatory authorities.
Both Imperial and ExxonMobil Canada are subsidiaries of U.S.-based energy giant Exxon Mobil Corp.
"Imperial Oil's participation will occur immediately after the acquisition closes, by means of a sale of a 50-per-cent interest in Celtic from ExxonMobil Canada," Imperial said in a news release Wednesday.
Imperial Oil chairman and CEO Bruce March said the buy-in will allow Imperial to diversify its strong resource base in Canada with an attractive liquids-rich natural gas play." "We continue to leverage our strong balance sheet and solid financial position to grow the company through strategic resource capture in key opportunity areas," March said.
"This new venture represents a significant opportunity to leverage ExxonMobil's expertise in shale gas development and add value for Imperial shareholders."
The Celtic assets will give ExxonMobil Canada and Imperial Oil 545,000 net acres in the liquids-rich Montney shale, 104,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta.
Current production of the acreage to be acquired is 72 million cubic feet per day of natural gas and 4,000 barrels per day of condensate and natural gas liquids.
The assets were estimated by Celtic as of Dec. 31, 2011, to include 128 million oil equivalent barrels of proved plus probable reserves, of which 24 per cent are condensate and natural gas liquids and 76 per cent natural gas.
Imperial Oil is one of Canada's largest corporations and a major producer of crude oil and natural gas. It is also Canada' largest petroleum refiner, a key petrochemical producer and a leading marketer with coast-to-coast supply and retail service station networks.