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ExxonMobil, Imperial Oil pursue

sale of Canadian shale assets

NORTH AMERICA EXXONMOBIL and its Canadian affiliate, in the wake of recent commodity price down-
Imperial Oil, have announced their intention to turns. In ExxonMobil’s case, its primary focus
market the interests in their XTO Energy Can- is shifting to the Permian Basin, as well as areas
ada joint venture, which operates their Canadian offshore Guyana and Brazil.
shale business. An Imperial spokeswoman told Reuters that
Each company owns a 50% stake in XTO the Canadian shale assets had been part of an
Energy Canada. The joint venture’s assets impairment charge that the two companies had
include 568,000 net acres (2,299 square km) in taken in late 2020. Meanwhile, ExxonMobil was
the Montney shale and 85,000 net acres (344 hit with a nearly $20bn impairment charge, also
square km) in the Duvernay play, both in cen- in 2020, primarily related to its shale operations. The Canadian
tral Alberta, as well as acreage in other parts of Shale gas assets in Appalachia, the Rocky Moun-
Alberta. Net production from these assets totals tains, Oklahoma and Texas were taken out of its shale assets
about 140mn cubic feet (4.0mn cubic metres) development plan following that write-down.
per day of natural gas and roughly 9,000 barrels had been part of
per day (bpd) of crude, condensate and natural Ohio assets
gas liquids (NGLs). Sources familiar with the Indeed, ExxonMobil confirmed separately this an impairment
matter told Reuters that the properties could week that it had launched a sale of 27,000 acres charge that the
fetch $500mn to $1bn. (109 square km) in the Ohio portion of the
According to a January 12 statement, RBC Appalachian Basin. The assets include 61 wells two companies
Capital Markets has been hired to advise on the that produced around 81 mmcf (2.3 mcm) per
potential sale. However, Imperial noted that a day of gas equivalent in 2021, as well as 274 wells had taken in late
definitive decision to sell the assets had not been operated by other companies, Reuters reported
made, and that operations would continue as citing a marketing document. 2020.
normal should the sale be scrapped. A source familiar with the matter told the
Imperial described the decision to market news service that the assets could be valued at
the assets as part of its ongoing evaluation of its around $200mn based on current gas prices and
unconventional portfolio, in line with its strategy existing production. An ExxonMobil spokes-
to focus its upstream resources on its oil sands woman, Sarah Nordin, added that information
operations. ExxonMobil, meanwhile, has been was being provided to potentially interested
shedding non-core assets and using the proceeds third parties but that no agreement had been
to pay down debt as small and large players alike reached and that operations were continuing as
have prioritised their most profitable operations normal in the meantime.™

P8 www. NEWSBASE .com Week 02 13•January•2022