ConocoPhillips said late Monday it has added the Austin Chalk in Louisiana to its exploration portfolio and bolted on acreage in Western Canada’s Montney formation to expand its North American development opportunities.

The largest independent in North America has up to now been concentrating its development efforts in the Permian Basin, as well as the Eagle Ford and Bakken shales, and it has sold off noncore packages and bolted on acreage in select areas. During the fourth quarter, Lower 48 output averaged 236,000 boe/d, a 12% sequential increase.

“We have been laser focused on strengthening our portfolio by divesting noncore properties, while adding high-value resource opportunities for future investment,” said Executive Vice President Matt Fox, who oversees Strategy, Exploration and Technology.

In the limestone-rich Austin Chalk, which extends along the Gulf Coast from Texas into Louisiana, about 245,000 net acres were purchased for an undisclosed price from an unnamed buyer. Management said it secured the acreage for a “very low entry cost.”

Several exploration wells are planned in the Austin Chalk this year without adding any more funds to the planned capital budget. ConocoPhillips is planning to spend about $5.5 billion a year through 2020 on capital expenditures.

The Houston-based super independent also acquired another 35,000 net acres in the Montney formation in British Columbia (BC) for $120 million. The acreage is adjacent to an existing position in the liquids-rich portion of the unconventional play.

With the purchase, ConocoPhillips now holds 140,000 net acres in the Montney, with appraisal underway. Exploration and appraisal activity also is to be funded within the existing exploration budget.

Between January and March, ConocoPhillips completed or secured definitive agreements to bring in about $250 million of proceeds by selling off some noncore acreage. It closed on the sale of “several small packages” in the Permian, while another package of largely undeveloped acreage in South Texas is expected to be completed by the end of June.

Production impacts from the transactions are minimal. ConocoPhillips expects to complete a planned disposition program by mid-year.

“The acreage we’ve acquired in Louisiana and the Montney has the potential to add to our low cost of supply resource base without requiring significant near-term capital commitments,” Fox said. “We have been able to fund these acquisitions with proceeds from asset dispositions, while reducing debt, accelerating share repurchases, maintaining capital discipline and retaining cash on the balance sheet.

“These actions are consistent with our clear strategic priorities, which are designed to create value for our shareholders through cycles.”

Tudor, Pickering, Holt & Co. Inc. (TPH) said Tuesday the noncore sales were “not a needle mover, in our view, given the relative size of the deals,” but “equity could continue to work near-term…given the firm commitment to shareholder returns.”

ConocoPhillips is planning to buy back $2 billion worth of shares this year following last year’s $3 billion purchases.

The Montney land grab “provides a meaningful data point and serves as a reminder that there are buyers for the right Montney assets,” said the TPH team. The purchase metrics indicate a value of around C$4,395/acre, “driving a per section purchase price in excess of C$2.8 million, screening at the high end of large land transactions since the beginning of 2017.”

The block of Montney land has the benefit of having the Alliance Pipeline Ltd. system “running through the property, and given the recently announced open season for the pipeline expansion, this could be a strategic piece of long haul takeaway.”

Alliance last month launched a 25% capacity increase from northern BC and Alberta to Chicago to raise deliveries to 2 Bcf/d from 1.6 Bcf/d. Alliance plans compressor additions to the 3,848-kilometer (2,291-mile) bullet line to Chicago. A two-month open-season of binding delivery contracts, closing May 30, is expected to put finishing touches on the package.