PRESS DIGEST- New York Times business news - March 28
March 28 The following are the top stories on the New York Times business pages. Reuters has not verified these stories and does not vouch for their accuracy.
CALGARY, Alberta Imperial Oil Ltd (IMO.TO), Canada's second-largest integrated oil company, said on Wednesday it will pay C$1.55 billion ($1.56 billion) for a 50 percent stake in Celtic Exploration Ltd CLT.TO after the unconventional oil and gas producer is taken over by Exxon Mobil Corp (XOM.N).
Exxon Mobil, which owns 69.6 percent of Imperial, said in October that it would buy Celtic for C$2.6 billion to gain its promising shale oil and gas properties in British Columbia and Alberta. Imperial has the right to acquire 50 percent of any new Canadian business launched by its majority owner.
"This acquisition will allow Imperial to diversify its strong resource base in Canada with an attractive liquids-rich natural gas play," Chief Executive Bruce March said in a statement.
Analysts said the deal may help speed Canadian approvals for Exxon's acquisition, though approval may still be delayed while the government decides whether to allow two larger mergers; the $15.1 billion acquisition of Nexen Inc NXY.TO by China's CNOOC Ltd (0883.HK) and the C$5.2 billion bid for Progress Energy Resources Corp (PRQ.TO) by Petronas PETR.UL, Malaysia's state oil company.
"We believe this provides additional confidence that the deal will receive Investment Canada approval as (Imperial) has operated in Canada since 1899," Andrew Potter, an analyst at CIBC World Markets, said in a research note.
"Investment Canada approval will likely extend beyond the initial 45-day review period (expiring on December 31). We expect a 30-day extension, with Investment Canada approval coming some time in mid to late January"
Imperial, known for its dominant position in the Alberta oil sands, said the deal includes acquisition of 649,000 net acres in the liquids-rich Montney and Duvernay shales in Alberta.
A recent study said the province's shale formations, including Duvernay, Montney and Muskwa, could ultimately contain 3,324 trillion cubic feet of natural gas, 58.6 billion barrels of gas liquids and 423.6 billion barrels of oil.
Imperial said on Wednesday current production in the acreage being acquired is 72 million cubic feet per day of natural gas and 4,000 barrels per day of condensate and natural gas liquids.
Imperial's buy-in will occur immediately after Exxon's acquisition closes.
Shares of Imperial Oil were up 14 Canadian cents at C$42.65 late on Wednesday morning on the Toronto Stock Exchange.
(Reporting by Scott Haggett and Bhaswati Mukhopadhyay; Editing by Peter Galloway)
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