Under an agreement signed on 2 June 2011, PICL will acquire 50% of Progress’ interest in the three areas for a total consideration of C$1.07 billion (RM3.32 billion, US$1.1 billion). The assets included in the transaction cover approximately 150,000 gross working-interest acres of land with an estimated contingent gas resource of more than 15 trillion cubic feet. The assets will be operated by Progress.

The proposed acquisition will mark PETRONAS’ first entry into Canada and will allow for accelerated upstream growth that could potentially advance a liquefied natural gas (LNG) export value proposition in that country. PETRONAS views the acquisition as a highly attractive opportunity, paving its entry into the North American shale gas industry while at the same time further strengthening its position as a leading global LNG player.

As part of the acquisition, PETRONAS and Progress have agreed to establish an LNG Export joint venture to conduct a feasibility study on the economic viability of an integrated LNG Export facility in Western Canada. This could provide a strategic alternative to the traditional North American pipeline gas market.

The two companies have also agreed to collaborate on other potential natural gas opportunities in Western Canada.

The transaction is conditional upon relevant regulatory approvals and PETRONAS expects the transaction to close in the third quarter of 2011.

Bank of America Merrill Lynch is the exclusive financial advisor to PETRONAS on this transaction.