Canada's Nexen to sell 40-% stake in shale gas assets to Japan’s Inpex for C$700 mn

Nexen Inc, Canada's sixth-largest oil producer, today said that it would sell a 40-per cent stake in its northeast British Columbia shale gas assets to Japan's Inpex Corp led consortium, for C$700 million ($678.7 million).

Nexen, which will remain the operator of the assets, said that the consortium would make a 50-per cent upfront payment and contribute 50 per cent as capital cost. IT expects the sale to close in the first quarter of 2012, at which time approximately $600 million would be due to Nexen.

Post closing, Nexen will hold a 60-per cent interest in the venture project land, and the remaining 40 per cent will be owned by Inpex Gas British Columbia Ltd, an 82-per cent:18-per cent joint venture between Inpex and JGC Corporation.

Nexen said the tie-up with the consortium would help develop shale gas lands in the Horn River, Cordova and Liard basins in northeast British Columbia.

On a gross basis, the land area operated by joint venture is estimated to contain 4-15 tcf of recoverable contingent resource in the Horn River and Cordova basins and 5-23 tcf of prospective resource in the Liard basin.

The Calgary-based company is one of Canada's energy companies that has global operations in the oilsands, natural gas region of Western Canada and in the Gulf of Mexico, North Sea, Africa and the Middle East.

Last week, the company lost its operations in Yemen, although it had been operating there for nearly two decades.

Inpex currently has 71 oil and gas projects in 26 countries, making it Japan's largest oil and gas exploration and production (E&P) company. With production of over 400,000 boe/d, Inpex has the largest oil and gas reserves and production volume of any Japanese E&P company.