Tourmaline buying Shell oil and gas assets in Alberta, BC for $1.4B

Properties currently produce the equivalent of 24,850 barrels of oil a day.

CALGARY — Tourmaline Oil Corp. is buying a significant package of shale oil and gas assets from Royal Dutch Shell for $1.37 billion, as the energy giant makes a further retreat from Canada.

Tourmaline will acquire about 58,700 hectares in the Deep Basin area of west-central Alberta and 24,700 hectares in the Gundy area of northeastern BC.

Together the properties currently produce the equivalent of 24,850 barrels of oil a day, though production is heavily weighted to natural gas.

Tourmaline will also gain control of three natural gas processing plants, 719 kilometres of pipelines and thousands of future drilling targets.

The Calgary-based company will pay for the assets with about $1 billion in cash, funded in part through $739 million in financing also announced Thursday, and the rest in shares.

Shell said the assets were non-core and it still has about 262,000 hectares of shale properties in Canada, but the deal does represent a further narrowing of its Canadian operations after canceling its Carmon Creek oil sands project last October and indefinitely deferring its LNG Canada project in July.

News from © Canadian Press Enterprises Inc. 2016

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