CALGARY—Canadian Natural Resources Ltd. will pay $3.125-billion cash to buy conventional oil and gas assets near its core areas in Western Canada in a major land deal with Devon Canada.
Canadian Natural will also acquire six natural gas plants and other infrastructure as part of the transaction, which the Calgary-based company says will immediately add to its production, cash flow and earnings.
“This acquisition fits our strategy of opportunistically adding to our existing core areas, where we can provide immediate value, with the opportunity to add value in the future,” president Stev Laut said in the announcement.
In addition to the producing assets, Canadian Natural will acquire more than two million acres of undeveloped land and nearly three million acres of royalty lands from Devon.
The deal comes just weeks after Canadian Natural called off plans to sell a major portion of its holdings due to low prices.
The Devon lands are adjacent or close to Canadian Natural’s current operations in Western Canada.
The deal doesn’t include Devon’s holdings in the Horn River area in British Columbia and the Northwest Territories or its heavy oil properties.
Canadian Natural expects the deal to close April 1.
The Devon transaction follows Canadian Natural’s decision to hold onto its unconventional shale holdings in the Montney formation after announcing in March 2013 that it was looking for a buyer or partner.
The firm was only one of several major Canadian oil and gas companies that were shopping around major portions of their holdings to simplify their business during a period of low gas prices.
It announced on Jan. 9 that Canadian Natural had received “a number of expressions of interest” in the shale assets since putting them on the market, but none was good enough to merit a deal.