Exxon Mobil, Imperial Sell Canada Shale Assets for $1.5 Billion Cash

Imperial and Exxon Mobil agreed to sell XTO Energy Canada, a jointly owned shale producer in Western Canada, in an all-cash transaction to Whitecap Resources.

Hart Energy Staff
Exxon Mobil, Imperial Sell Canada Shale Assets for $1.5 Billion Cash

The sale of XTO Energy Canada, which is jointly owned by Imperial Oil Resources Ltd. and ExxonMobil Canada Ltd., includes 567,000 net acres in the Montney Shale, 72,000 net acres in the Duvernay Shale and additional acreage in other areas of Alberta. (Source: Shutterstock.com)

Imperial and Exxon Mobil Corp. agreed on June 28 to the sale of their jointly owned Canadian shale position for total cash consideration of CA$1.9 billion (US$1.48 billion).

As part of the agreement, Whitecap Resources Inc. will acquire XTO Energy Canada ULC in an all-cash transaction, which the Calgary, Alberta-based company said adds over 20 years of Tier 1 drilling locations in the Montney and Duvernay shale plays. The result is expected to generate significant free cash flow, which the Canadian oil producer plans to use to boost its dividend by 22%.

“The acquisition provides Whitecap with approximately $200 million of incremental free funds flow per year allowing us to accelerate the return of capital to our shareholders. Effective with the July dividend payable in August, our board of directors has approved a 22% increase to the monthly dividend to $0.0367 per share, from $0.03 per share previously, which equates to $0.44 per share on an annual basis,” Whitecap said in a statement on June 28.

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