ExxonMobil Canada acquires Celtic Exploration Ltd. for $2.6B, including liquids-rich Montney Shale acreage

18 October 2012

An ExxonMobil Canada affiliate will acquire Calgary-based Celtic Exploration Ltd. in a $2.6-billion transaction, picking up 545,000 net acres in the liquids-rich Montney shale, 104,000 net acres in the Duvernay shale and additional acreage in other areas of Alberta. Current production of the acreage to be acquired is 72 million cubic feet per day of natural gas and 4,000 barrels per day of crude, condensate and natural gas liquids.

The assets were estimated by Celtic on 31 December 2011 to include an estimated 128 million oil equivalent barrels of proved plus probable reserves, of which 24% are crude, condensate and natural gas liquids and 76% natural gas.

Shareholders of Celtic Exploration will receive C$24.50 per share and half a share of a newly established company which will hold assets not included in the agreement with ExxonMobil Canada. These assets include acreage in the Inga area in British Columbia, the Grande Cache area in Alberta and interests in oil and gas properties located in Karr, Alberta.

The agreement is subject to approval by Celtic Exploration’s shareholders and Canadian regulatory authorities.

This acquisition will add significant liquids-rich resources to our existing North American unconventional portfolio. Our financial and technical strength will enable us to maximize resource value by leveraging the experience of ExxonMobil subsidiary XTO Energy, a leading US oil and natural gas producer which has expertise in developing tight gas, shale oil and gas and coal bed methane.

—Andrew Barry, president of ExxonMobil Canada

ExxonMobil’s Canadian affiliate, Imperial Oil Limited, is not a party to the transaction, but may elect to participate at a later date through its existing agreement with ExxonMobil Canada that provides for up to equal participation in new Canadian upstream opportunities. Imperial Oil Limited has advised that it is currently evaluating this opportunity.