Athabasca Oil has completed the previously announced light oil joint venture (JV) with Murphy Oil within the Kaybob area in Alberta, Canada.
Under the JV, the company divested a 70% stake in its Greater Kaybob area assets and a 30% interest in its Greater Placid area assets for $486m.
Murphy will fund 75% of Athabasca’s share of Duvernay development capital for a period of five years and assume operatorship of the Greater Kaybob area assets.
Athabasca will retain operatorship of the Greater Placid area assets.
Athabasca Oil president and CEO Rob Broen said: "The partnership with Murphy advances our strategic goal of transitioning the Duvernay to commercial development and enabling scalable Montney growth, while giving Athabasca a more appropriate capital risk profile.
"The fact is, developing the Duvernay requires significant capital investment beyond our own balance sheet capability."
Athabasca said that the company has taken steps forward over the past two years in a bid to reduce capital spending and improve its cost structure.
The company’s development plan under the Kaybob joint venture is expected to result in about $1bn of gross investment over the first four to five years.
In the last three years, Athabasca focused on appraisal and development of its Duvernay and Montney land position in Greater Kaybob and Placid.
To date, the company has drilled 26 Duvernay wells at Greater Kaybob and five Montney wells at Placid.
Murphy Oil president and CEO Roger Jenkins said: "This new position in the Kaybob Duvernay and liquids rich Placid Montney complements our existing unconventional business in the Eagle Ford Shale and the Montney.
"Current net production is approximately 4,000 barrel of oil equivalent per day (boepd), which will add approximately 2,100 boepd to Murphy’s second quarter production."
