Chevron Corp. unit Chevron Canada Ltd. has agreed to acquire all interests from Alta Energy Luxembourg S.a.r.l. and affiliates in the Duvernay Shale formation in west-central Alberta. The acquired interests cover 67,900 net acres.

“This agreement further strengthens our land position in the core part of this prospective wet shale gas play, where we have exploration leases totaling more than 250,000 acres,” said Chevron Canada President Jeff Lehrmann.

The purchase price was not disclosed, but some some observers priced the deal at close to $1 billion. During the second half of 2011, Chevron Canada began a multi-well exploration program for unconventional resources in the Duvernay formation. Initial production was achieved in 2012 on the 100%-owned and operated leases.

The Duvernay is in the Western Canada Sedimentary Basin and is thought to hold 443 Tcf of natural gas and 61.7 billion bbl of oil. Gas production from the Duvernay could one day be liquefied and exported to Asian markets by any of multiple liquefied natural gas export projects proposed for western Canada.

The Duvernay is viewed as one of the bigger resource plays, according to analysts at Wood Mackenzie (see Shale Daily, Oct. 25, 2012). “The Duvernay has been in the crossfire of many explorers, large and small, over the past few years but only now are they beginning to delineate the formation,” an analyst at the firm said last fall. “It has the potential to be as big as the Eagle Ford, but it’s a much different play,” said Dunn. “It’s further on in life,” in terms of the shale’s formative life, but based on early well results, “it has the potential to be up…It certainly has the potential.”

Talisman Energy Inc. is selling Duvernay Shale assets (see Shale Daily, June 20). Encana recently announced encouraging well results in the play (see Shale Daily, July 26).

“To date, we have been encouraged by the reservoir data and production performance from our exploration drilling program on our Kaybob Duvernay leases,” said Lehrmann. “We are pleased to add to our acreage in this play as we advance our program to evaluate the potential for full-field commercial development.”