Canadian Manufacturing

Canadian Natural Resources calls off hunt for B.C. shale deal

Calgary-based oil and gas producer said offers didn't warrant sale of assets in northeastern B.C.

CALGARY—Canadian Natural Resources Ltd. is calling off its hunt for a buyer or partner in the natural gas-rich Montney region of northeastern British Columbia, opting instead to keep its vast resource base there.

The oil and gas producer said it received “a number of expressions of interest” in the assets since putting them on the market early last year, but none was good enough to merit a deal.

“As such, the company has elected to retain the acreage, maintaining one of the largest Montney land positions in Western Canada with over one million net acres,” the firm said in a brief statement.

The company announced last March it was looking for buyers or partners for the assets, which are in a part of northeastern B.C. that contains huge reserves of natural gas within shale rock formations.

It was seen as a bit of a departure for a firm that has traditionally preferred to operate its assets solo rather than partner up with other firms.

Canadian Natural Resources said third-party evaluators estimate the company’s Montney lands contain about 6.7 trillion cubic feet of gas, one of the largest reserve holdings in Western Canada.

A number of other major energy companies have also been shopping around their land and infrastructure amid a period of low commodity prices—resulting in a crowded market.

In November, Talisman Energy Inc.—under pressure from investors to pare its holdings—managed to sign a $1.5-billion deal with the Canadian unit of Malaysia’s Petronas for its Montney holdings.

Progress Energy Canada Ltd. will be buying more than 51,000 net hectares of land in the Farrell Creek and Cypress areas of the Montney that Talisman owns through a 50-50 partnership with South Africa’s Sasol.

The all-cash deal also includes interests in wells, pipelines and processing plants.

If the deal closes as planned and Sasol doesn’t exercise its right of first refusal for the assets, the Malaysian and South African companies would be partners in the Montney.

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