CALGARY – Celtic Exploration Ltd. (TSX:CLT) said Wednesday it has Ottawa’s approval to be taken over by Houston-based energy heavyweight ExxonMobil Corp. for $3.1 billion.
The approval under the Investment Canada Act means that no further regulatory approvals are required. The deal is expected to be completed Feb. 26.
The Investment Canada Act is the same legislation under which the Conservative government approved Chinese state-owned CNOOC Ltd.’s $15.1-billion takeover of Nexen Inc. in December.
When Prime Minister Stephen Harper announced that decision, along with an approval of a $6-billion takeover of Progress Energy Resources by Malaysia’s Petronas, he signalled a change in Ottawa’s foreign investment rules.
From now on, control of oilsands companies by foreign state-owned enterprises will only be allowed under “exceptional circumstances.”
Critics charge that the rules are still too vague.
Imperial Oil Ltd. (TSX:IMO), a Calgary-based company about 70 per cent owned by ExxonMobil, has said it will exercise its option to invest $1.55 billion for a 50 per cent stake in Celtic.
Imperial’s involvement takes effect right after the transaction closes.
The deal, announced last October, will see Exxon add lucrative natural gas liquids to its portfolio through the control of about 221,000 hectares in the Montney formation in B.C. and Alberta and 42,000 hectares in the emerging Duvernay shale in Alberta.
Current production on that land is 72 million cubic feet per day of natural gas and 4,000 barrels per day of condensate and natural gas liquids.
The assets were estimated by Celtic as of Dec. 31, 2011, to include 128 million oil equivalent barrels of proved plus probable reserves, of which 24 per cent are condensate and natural gas liquids and 76 per cent natural gas.
Separately, Imperial and ExxonMobil have discussed building a liquefied natural gas export facility on Canada’s West Coast to enable the fuel to reach more lucrative Asian markets.
ExxonMobil made a big move into natural gas in late 2009 when it announced an eye-popping US$41-billion acquisition of U.S. natural gas giant XTO.