Shell Canada Sells Shale Assets to Crescent Point Energy


Today, Shell Canada Energy announced it reached an agreement with Crescent Point Energy Corp to sell its Duvernay shale light oil position in Alberta, Canada. Accordingly, this acquisition is valued at $707 million (C$900 million) and will become effective on January 1st, 2021.

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Shell Canada on selling its shale assets to Crescent Energy

Shell Canada Energy, a Royal Dutch Shell plc affiliate, announced Wednesday it reached an agreement with Crescent Point Energy Corp. Therefore, the deal will sell Crescent’s shale light oil position in Alberta, Canada, for a total consideration of $707 million.

In this regard, the consideration was $550 million in cash and 50 million shares in Crescent Point Energy common stock. Indeed, the process is still subject to regulatory approvals and is expected to close in April this year.

Wael Sawan, Upstream Director at Shell, declared,” divesting these assets underpins Shell’s effort to focus the Upstream portfolio on delivering cash.”

Furthermore, “while Shell believes these assets hold value, the divestment allows it to focus on its Upstream core positions. For instance, the Permian Basin, with integrated value chains. Thereby building a resilient, lower-risk, and less complex portfolio.”

Moreover, the transaction includes transferring approximately 450,000 net acres in the Fox Creek (Kaybob) and Rocky Mountain House (Willesden Green) areas.

Besides, related infrastructure will be transferred, which currently produces around 30,000 barrels of oil equivalent per day (boe/d) from more than 270 wells.

Shell’s presence in Canada

In fact, Crescent Point Energy will retain the field employees and several technical and commercial roles that support the assets.

According to a press release, Shell has a 100-year history of operations in Canada. Furthermore, the Company remains committed to the country’s energy future.

Consequently, Shell’s footprint in Canada already includes a 40% interest in LNG Canada, shale gas positions in British Columbia (Groundbirch), and shale gas and liquids jobs in Alberta (Gold Creek).

Besides, this footprint includes the Scotford Complex in Alberta, investments in cleaner energy; and a growing retail business with around 1,400 sites across Canada.

The Company also has approximately 500 producing wells in the Groundbirch acreage in Northeast British Columbia. In fact, roughly 75% of those wells have joint venture ownership.

Finally, the Company declared in a press release that Shell has resilient, low break-even positions; focusing on high-margin tight oil positions and low-cost gas assets.

Furthermore, in the Permian Basin, Shell has a very attractive position. Shell’s acreage lies in areas with the thickest formations and provides more than 50% of total Shales production.

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