Exxon to sell oil sands properties in Western Canada

Exxon to sell oil sands properties in Western Canada

A logo of Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil on September 24, 2018. REUTERS Sergio Moraes File Photo File Photo

Jan 12, Reuters -- Exxon Mobil XOM.N plans to offer sale of shale oil and gas properties in Western Canada, a decision that could make oil sands its largest Canadian onshore production business.

The top U.S oil producer last year accelerated efforts to divest smaller oil and gas operations and use any proceeds to pay down debt acquired because of the coronaviruses epidemic.

Exxon and Imperial Oil Ltd IMO.TO each own 50% of XTO Energy Canada, the operator of their Canadian shale business. XTO pumps about 9,000 barrels of liquids and 140 million cubic feet of natural gas per day in Canada.

RBC Capital Markets has been hired to advise Imperial on the sale, the company said. People familiar with energy property sales said that the properties could fetch between $500 million and $1 billion.

An Imperial spokeswoman said that the shale assets were part of an impairment charge that Imperial and Exxon took in late 2020. The companies also own petrochemical plants and Exxon operates offshore production in Eastern Canada.

Exxon's U.S. Gulf of Mexico and U.K. North Sea properties have raised more than $1.1 billion in past divestitures. It put several packages of U.S. natural gas properties on the market. XTO Energy Canada assets on offer include 568,000 acres in Montney shale, 85,000 acres in Duvernay shale and smaller parcels elsewhere in Alberta, Imperial said.

Canada's Montney straddles Alberta and British Columbia, saw a wave of consolidation as companies buckled under when oil prices collapsed amid the COVID-19 epidemic.

In 2020 the oil major took a nearly $20 billion writedown on properties that were primarily purchased with the acquisition of XTO Energy a decade ago. After the write down, gas assets in Appalachia, the Rocky Mountains, Oklahoma and Texas were taken out of the development plan.