Imperial Oil to sell western Canada assets, focus on oil sands
CALGARY, Canada (Bloomberg) -- Imperial Oil Ltd., the Canadian energy company majority owned by Exxon Mobil Corp., agreed to sell some assets to Whitecap Resources Inc. for about C$855 million ($774 million) as it focuses on larger oil-sands projects.
The conventional oil and natural gas assets in British Columbia and Alberta produced the equivalent of about 15,000 bopd in 2013, the Calgary-based company said in a statement today. Half of the production is oil and the other half is gas.
Imperial has focused on expanding its so-called unconventional production, which includes oil sands. The company spent C$12.9 billion to bring the Kearl oil-sands project online last year and joined with Exxon, which owns 70% of its stock, to buy more oil-sands acreage for about C$751 million in August. Kearl and the Cold Lake oil-sands project provide an “incredible platform for growth,” Imperial CEO Rich Kruger said in September.
“For Imperial, I don’t think these assets really move the needle anymore, so it’s a focus on Cold Lake and Kearl, the big projects,” Justin Bouchard, an analyst at Desjardins Securities Inc. in Calgary, said in a phone interview today. “For the guys who bought it, it’s obviously meaningful.”
For Whitecap, also based in Calgary, the acquisition “greatly enhances our sustainable dividend-growth model and is accretive on all key measures both in 2014 and 2015,” the company said in a separate statement. The deal is expected to close in May.
Imperial hired Scotiabank last year to sell the assets. National Bank Financial Inc. has acted as Whitecap’s financial adviser and GMP Securities LP, and TD Securities Inc. were strategic advisers on the purchase.