Imperial Oil Ltd., Canada’s second-largest integrated producer, on Wednesday said it would pay US$1.56 billion to gain a 50% interest in Celtic Exploration Ltd. after the unconventional operator is taken over by ExxonMobil Corp.
ExxonMobil, majority owner (69.7%) of Imperial, in October agreed to pay $3.14 billion, including debt, to buy the Calgary-based producer, which has a shelf of unconventional properties in the Montney and Duvernay shales (see Daily GPI, Oct. 18).
“This acquisition will allow Imperial to diversify its strong resource base in Canada with an attractive liquids-rich natural gas play,” said Imperial CEO Bruce March.
Current production from the estimated 650,000 net acres being acquired from Celtic is 72 MMcf/d of gas and 4,000 b/d of condensate and natural gas liquids, Imperial said. Imperial would own the half-interest when the acquisition is completed.
According to CIBC World Markets, Imperial’s participation could accelerate Canadian approval of the acquisition. Investment Canada, the government agency in charge of mergers, now is re-reviewing a $15 billion acquisition of Calgary’s Nexen Inc. by China’s Cnooc Ltd. (see Daily GPI, Nov. 21). It also is awaiting a revamp of a $5.2 billion takeover bid by Malaysia’s Petronas for Progress Energy Resources Corp., which was initially rejected (see Daily GPI, Oct. 23).
“We believe this provides additional confidence that the deal will receive Investment Canada approval as (Imperial) has operated in Canada since 1899,” said CIBC analyst Andrew Potter. “Investment Canada approval will likely extend beyond the initial 45-day review period (expiring on Dec. 31). We expect a 30-day extension, with Investment Canada approval coming some time in mid to late January.”
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