Exxon to buy Canada's Celtic Exploration for C$2.6 billion

Wed Oct 17, 2012 3:46pm EDT
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By Scott Haggett

CALGARY, Alberta (Reuters) - Exxon Mobil Corp agreed to buy Celtic Exploration Ltd for C$2.6 billion ($2.64 billion), in a deal to raise its presence in some of Western Canada's most promising shale oil and gas regions.

The transaction, announced Wednesday, will give Exxon vast tracts in the liquids-rich Montney shale gas region in northeastern British Columbia. It will join other world-scale energy companies looking to tap Montney's massive reserves to feed planned liquefied natural gas plants planned for province's Pacific coast.

It will also gain a stake in Alberta's promising Duvernay shale play, an early stage development where peers such as Chevron Corp and ConocoPhillips have already taken big stakes.

Exxon and other global oil majors are buying oil and gas assets in North America as they struggle to boost output in a sector where vast energy resources are tightly controlled by countries like Brazil and Russia.

Exxon Mobil started a big push into in unconventional resources like shale with its 2010 purchase of XTO Energy. Since then, Exxon has steadily added shale gas and shale oil reserves in North America as it works to boost production.

"This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio," Andrew Barry, president of ExxonMobil Canada, said in a statement.

In September, Exxon agreed to buy Denbury Resources Inc's crude oil properties in the Bakken shale for $1.6 billion.

Since it was formed in 2002, Celtic, led by Chief Executive David Wilson, has focused on finding liquids-rich gas reserves that fetch a premium compared with dry natural gas and on acquiring lands in the most promising of Canada's shale regions.   Continued...

The Exxon corporate logo is pictured at a gas station in Arlington, Virginia January 31, 2012. REUTERS/Jason Reed