Imperial Oil (IMO) is spending $1.5B to buy into ExxonMobil’s (XOM) acquisition of fellow Canadian player Celtic Exploration (CEXJF.PK), gaining a 50% stake to complete the earlier transaction where XOM agreed to buy Celtic outright for ~$2.6B. The pair will gain access to 545K net acres in the liquids-rich Montney shale and 104K net acres in the Duvernay shale via the Celtic takeover.
The price paid by Exxon (XOM +0.9%) to acquire Celtic Exploration gives an indication of how North American gas asset valuations have fallen in recent years. Tudor Pickering analysts say the ~$4,800/acre price was below recent sales of $8K-$15K. Shell paid ~$13K/acre for Duvernay’s land in 2008, and PetroChina bought Encana assets for ~$8.5K/acre in 2011.