A major partnership between a Canadian company and a major Japanese oil and gas producer was recently announced.
Calgary-based Nexen Inc. (NXY:TSX) will be paid C$700 million for part of its shale gas prospects in British Columbia by Inpex Corp. and partner JGC Corp., according to the Calgary Herald. Inpex is reportedly the largest oil and gas company in Japan and produces 400,000 barrels of oil equivalent per day.
Specifically, the deal calls for Nexen to give up 40 percent of its ownership at its properties in the Horn River, Cordova and Liard basins. Inpex will receive 82 percent of this portion, while 18 percent will go to JGC.
"Inpex plans to dispatch its experts as secondees to this project, which help the project benefit from Inpex's wide range of gas development experiences around the world," the Japanese company said in a statement.
The Horn River basin has been described as a major play, with some estimates putting the resources there as high as 100 trillion cubic feet of natural gas.
The move by Inpex is just the latest example of a foreign firm moving into Canada.
China has been active in Canada with the state-owned Sinopec taking over Calgary-based Daylight Energy (DAY:TSX) for $2.2 billion in October. Some industry experts believe that this is just one of China's first steps into foreign unconventional gas plays.
South Africa has also made its presence felt in Canada with Sasol agreeing to two C$1.05 billion deals with Talisman Energy (TLM:TSX) to not just develop shale gas in the Montney formation but to create a facility to convert natural gas to gasoline, according to the Herald.
Nexen's stocks closed at C$15.95 on November 29 and appear to be responding positively to the news of the Inpex deal.