WINNIPEG, Manitoba (Reuters) - U.S. oil major ConocoPhillips said on Wednesday that it agreed to buy land from Kelt Exploration Ltd in Canada's Montney shale oil play, in a $375 million deal.
The 140,000 acres in British Columbia are directly adjacent to ConocoPhillips' (N:COP) own Montney lands, the company said. The oil resource amounts to 1 billion barrels of oil equivalent.
The deal allows ConocoPhillips to extend its existing position at an attractive cost, Chief Operating Officer Matt Fox said.
It comes three years after Houston-based ConocoPhillips sold much of its Canadian assets to Cenovus Energy (TO:CVE), part of a multi-year withdrawal of foreign producers from Canada. In April, ConocoPhillips reduced production at its Surmont Canadian site by 100,000 barrels of oil per day.
Kelt (TO:KEL) said in a statement that the sale would strengthen its finances during an uncertain economic time, while leaving it a large inventory of future drilling sites.
The deal is expected to close Aug. 21.