Tourmaline Oil Corp. (TSX:TOU) 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.
In the deal announced Thursday, 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 British Columbia.
Together the properties currently produce the equivalent of 24,850 barrels of oil a day, though production is heavily weighted to natural gas.
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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 cancelling its Carmon Creek oilsands project last October and indefinitely deferring its LNG Canada project in July.
READ MORE: Shell CEO says Carmon Creek not an oilsands retreat